1. Implementing new UK accounting standard FRS 19 Thursday 21st March 2002

2. This presentation and the associated slides and discussion contain statements, particularly those regarding capital employed, capital expenditure, cash flows, costs, savings, debt, demand, disposals, dividends, earnings, efficiency, gearing, growth, margins, performance, prices, production, productivity, profits, reserves, returns, sales, strategy, synergies, tax rates, trends, value, volumes, the effects of BP merger and acquisition activity, which are or may be forward looking statements. Actual results may differ from those expressed in such statements, depending on a variety of factors including future levels of industry product supply; demand and pricing; political stability and economic growth; development and use of new technology; actions of competitors; and natural disasters, wars and acts of terrorism. Statements and data contained in this presentation and the associated slides and discussions, which relate to the performance of BP in this and future years, represent plans, targets or projections. Unless otherwise made clear, references to forward measures are to such measures calculated on a pro forma basis, which in the case of past performance have been adjusted for special items. March 2002

3. delivering strategy organic investment high grade portfolio capital efficiency operating efficiency  increase mid-cycle returns  grow capital employed  grow dividend …within a disciplined financial framework

4. What is FRS 19 New UK GAAP Financial Reporting Standard Requires full provision for deferred taxes in P&L BP to implement for 2002 History to be stated on a comparable basis No economic impact

5. No economic change due to FRS 19 Cash unchanged Performance targets unchanged Income tax rate increases to include all deferred tax Equivalent reductions in income & capital employed Neutral ROACE impact Financial framework maintained on an equivalent basis

6. Impact of FRS 19 - 2001 $m Pre FRS19 Post FRS19  Proforma RCOP19,608 Interest expense(1,608) Pre Tax Result18,000 Income Tax(4,749)(6,380)(1,631) Effective Tax Rate26%35%9% Statutory tax rate37% Stock holding losses(1%) Permanent Differences(3%) Timing Differences / Losses(7%)2%9% Effective Tax Rate26%35%9% Source: BP data Effective Tax Rate

7. Impact of FRS 19 - 2001 Earnings and Cash Source: BP data * Pre-Tax, including affiliate dividends and net financing costs. $m Pre FRS 19 Post FRS 19  Proforma RCOP19,608 Interest Expense(1,608) Income Tax(4,749)(6,380)(1,631) Minority Interest(73)(61)12 Proforma Result13,17811,559(1,619) Oper. Cash Flow *22,093 Cash Tax Paid(4,660) Net Cash Investment(11,604) Equity Dividends Paid(4,827) Net Cash Flow1,002

8. Impact of FRS 19 - 2001 Returns Source: BP data $m Pre FRS19 Post FRS19  Proforma RCOP19,608 Income Tax(4,749)(6,380)(1,631) Proforma result before MSI and Interest 14,92113,290(1,631) Proforma Average Capital Employed 76,60467,112(9,492) Proforma ROACE19.4%19.7%0.3%

9. Minimal Change to ROACE Proforma ROACE * Competitors: XOM, Shell, CVX, TFE; 2001 estimated Consistent handling of major transactions Source: BP data 0% 5% 10% 15% 20% 25% 19971998199920002001 Competitor range* BP Post FRS 19 BP Pre FRS 19

10. Financial Framework Unchanged Proforma Net Debt Ratio Previous target 20% - 30% FRS19 increases 2001 by 4% Target band re-calibrated to equivalent 25% - 35% Dividend Mid-Cycle Payout Ratio Previous target around 50% FRS19 increases 2001 mid-cycle payout by 9% Target re-calibrated to around 60% Source: BP data

11. $m Pre FRS19 Post FRS19  Net Debt*19,609 Proforma Equity57,00846,877(10,131) End period Proforma Net Cap. Emp. 76,61766,486(10,131) Proforma Net Debt Ratio25.6%29.5%3.9% Impact of FRS 19 - 2001 Debt Ratio Source: BP data *Net debt = gross debt - cash

12. $m Pre FRS 19 Post FRS 19  Proforma Result13,17811,559(1,619) Proforma EPS (¢/share)58.751.5(7.2) Dividend (¢/share)22.0 Proforma Dividend Payout 37%43%6% Impact of FRS 19 - 2001 Dividend Payout Source: BP data FRS 19 increases the 2001 payout ratio by 9% at mid-cycle conditions

13. Summary - No economic impact Cash unchanged Target Returns constant or rising at mid-cycle Performance potential unchanged - $1.4bn pre tax in 2002 Financial framework maintained on an equivalent basis Gearing 25% - 35 % Payout around 60% of mid-cycle proforma result Dividend growing with underlying performance improvement

14. Q&A panel John BuchananChief Financial Officer Mike StarkieChief Accountant Patrick ChapmanHead of Group Tax Greg ColemanVP, Investor Relations