BP in Azerbaijan Baku September 2006 Cautionary statement Forward - PowerPoint PPT Presentation

BP in Azerbaijan Baku September 2006

Cautionary statement Forward looking statements: This presentation and the associated slides and discussion contain forward- looking statements, particularly those regarding oil and gas prices; expected start-up of Thunderhorse; the timing of other projects and their contribution to expected production, their estimated reserves and production capacity; production; the expected movement of non-proven resources to proved reserves; divestments and their effect; capital expenditure; and cash flow. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that will or may occur in the future. Actual results may differ from those expressed in such statements, depending on a variety of factors, including the timing of bringing new fields on stream; future levels of industry product supply; demand and pricing; operational problems; general economic conditions; political stability and economic growth in relevant areas of the world; changes in laws and governmental regulations; exchange rate fluctuations; development and use of new technology; changes in public expectations and other changes in business conditions; the actions of competitors; natural disasters and adverse weather conditions; wars and acts of terrorism or sabotage; and other factors discussed elsewhere in this presentation. Cautionary Note to US Investors - The United States Securities and Exchange Commission permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or formation tests to be economically and legally producible under existing economic and operating conditions. We use certain terms in this presentation, such as “resources” and “non-proven reserves”, that the SEC’s guidelines strictly prohibit us from including in our filings with the SEC. U.S. investors are urged to consider closely the disclosures in our Form 20-F, SEC File No. 1-6262, available from us at 1 St. James’s Square, London SW1Y 4PD. You can also obtain this form from the SEC by calling 1-800-SEC-0330. September 2006

Introduction Fergus MacLeod Head of Investor Relations

1997 Baku Analyst Trip 1989 Access Agenda E & W Siberia E & W Siberia Caspian Caspian Algeria Algeria GOM GOM Vietnam Vietnam Deepwater Deepwater Nigeria Nigeria Yemen Yemen Venezuela Venezuela Lombok Lombok Angola Angola

1997 Baku Analyst Trip Current Environment Challenge to BP Competition Increasing Challenge to BP – Access competition – – Keep ahead of pack Keep ahead of pack – New players – – Play to strengths Play to strengths – Terms erosion – – Exploration track record Exploration track record – – Deepwater technology Deepwater technology – – Relationship management Relationship management – – Deepen existing pos Deepen existing positions itions – – Broaden into new pos Broaden into new positions itions

1997 Baku Analyst Trip Production Profile mb/d 2500 2000 Others 1500 1000 500 BP 0 1995 2000 2005 2010 2015 2020

E&P Strategy Update Tony Hayward Chief Executive, Exploration & Production

BP Azerbaijan organisation BP Azerbaijan President David Woodward / Bill Schrader* Commercial Director Chief of Staff Phil Home Erich Krumanocker Georgia General Manager Executive Assistant Hugh McDowell Kamala Husseynli Turkey E&P Director Djan Suphi Offshore Onshore Renewal VP Shah Deniz VP Major Projects VP Technical Director Operations VP Operations VP Paul Clyne Mike Skitmore Bruce Luberski Fereidoun Abbassian Neil McCleary Rashid Javanshir HR Director Zarina Zeynalova C&EA Director Clare Bebbington HSSE Director Gunther Newcombe Business Transformation Manager *David Woodward will be retiring from BP on 1 January 2007, Judith Luberski Bill Schrader will be effective in this role from 10 November 2006

Project start-ups 2005 2006 2007 2008 - 2009 2010 and beyond � Thunder Horse Valhall Cannonball Atlantis Atlantis North Paz Flor � Waterflood Flank Ursa Expansion Temsah King Sub-sea Egypt LNG T2 � � Kizomba C Mad Dog Redevelopment Pump Puma Browse � ACG Phase 3 � Central Azeri BTC San Juan Tubular Bells Io / Janz Angel � Coal Bed Methane � Clair In Amenas Alaska Gas Tangguh Phase 2 Australia LNG T5 Greater Plutonio � � Kizomba B Wamsutter Liberty Tangguh Phase 1 Vietnam Phase 2 Kizomba A Ph 2 Trinidad LNG Dalia Point Thomson Saqqara � Colombia Gas Train 4 Rosa Dorado East Azeri Western Regional Clair Ridge � Rhum Red Mango Great White Development Shah Deniz Skarv � Horn Mountain NW West Azeri North West Area Angola LNG Magnus Kovykta Export Mad Dog SW Ridge Development Mardi Gras Extension Block 18 West � Mars South Rospan Pipeline Block 31 North Cashima North Rankin B Block 31 South Chacalaca Kizomba D Block 31 Central Egypt LNG T1 Shah Deniz Phase 2 Harding Gas Valhall Redevelopment Uvat (Demiansky Phase I) � on stream in development under appraisal

Production to 2010 mmboe/d 5 Divestments closed in 4 2006 TNK-BP 3 New profit 2 centres 1 Existing profit centres 0 2001 2002 2003 2004 2005 2010 Actual prices and Production portfolio at $40 BP projection for ‘06-’10 updated to reflect closed ’06 divestments

Strategy – building profit centres Alaska Alaska North North Russia Russia Sea Sea North America North America Gas Gas Azerbaijan Azerbaijan Deepwater Deepwater Egypt Egypt Gulf of Mexico Gulf of Mexico North North Trinidad Trinidad Asia Africa Asia Africa & Tobago & Tobago Middle Pacific Middle Pacific East East Latin Latin America America Angola Angola Russia / Kazakhstan New Profit Centres Existing Profit Centres

Resource growth & progression 2001- 2005 New Further discoveries appraisal, revisions 8.0 7.8 Start ‘01 End ‘05 Purchased Sold resources resources Non-proved 25.9 12.5 4.4 40.7 9.1 Proved 15.2 2.7 1.9 18.3 41.1 59.0 6.7 Produced Totals in billion boe Proved UK SORP, non-proved BP data

End 2005 resource by type Non-Proved Proved Conventional Oil Deepwater Oil Water Flood Viscous 18 bn boe 41 bn boe and Heavy Oil Conventional Gas LNG Gas Tight Gas Coal Bed Methane Between 2005 and 2010 11 bn boe of non-proved resources are expected to be moved to proved reserves Totals in billion boe Proved UK SORP, non-proved BP data

The ultimate prize 200 bn boe oil bn boe and gas initially Produced 38 in place Proved Non-Proved 18 Currently unrecoverable hydrocarbon 41 Does not include exploration potential

Summary • New Profit Centres have arrived − Major Projects underpin production growth through the end of the decade and beyond • Power of incumbent positions − Technology to unlock the resource base

Building a New Profit Centre: Azerbaijan Andy Inglis Deputy Chief Executive, Exploration & Production

Building a new profit centre: Azerbaijan • Resource base • Technology • Project delivery • Statecraft and diplomacy • Sustainability through mutuality

Resource base: Azerbaijan ACG and Shah bn boe 0.4 Deniz Gross Produced Resource 6.1 Sanctioned Non-Proved Currently unrecoverable hydrocarbon 7.6 Source: BP data

Technology Reserves pull-through Maximising revenue Capital efficiency

Project delivery Azerbaijan Central Azeri - 2004 West Azeri - 2005 East Azeri – 2006 ACG3 - 2008 Angola G. Plutonio - 2007 Bk31 North – 2010+ Bk31 Central – 2010+ Bk31 South – 2010+ Bk18 West – 2010+ Trinidad Cannonball – 2006 Red Mango – 2007 Cashima – 2008 Chachalaca -2009 Egypt Train 1 Supply 2008 Train 2 Supply – Ph1 2010+ Train 2 Supply – Ph2 2010+ GoM Dorado 2008 Horn Mountain Mad Dog SW Ridge Atlantis North Flank NW 2008 2009 2010+

Statecraft and diplomacy

Sustainability through mutuality Workforce capability Local content Capacity building

Overview of Azerbaijan and BP’s presence Rashid Javanshir Vice President, Onshore Operations

Geography KAZAKHSTAN UKRAINE MOLDOVA RUSSIA Odessa Constanta Black Sea Novorossiysk BULGARIA Caspian Bosphorus Sea Supsa TURKMENISTAN GEORGIA Baku Istanbul ARMENIA AZERBAIJAN TURKEY IRAN Ceyhan IRAQ Mediterranean Sea SYRIA

150 years of oil production Further Developments 1400 ACG 2010 (1200 mmb/d) 1200 Phase 3 online 2008 1000 Today D W Oil rate (mbd) 800 G Azeri online 2005 600 Historical peak 1941 (475 mmstb/d) Chirag online 1997 Azeri 400 Chirag 200 Future decline for other fields assumed 3% annual 0 1870 1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020

Azerbaijan’s oil history Oil wells in the vicinity of Baku pumping oil into reservoir lakes in 1880s. The Nobel Brothers' oil wells in Photo: Azerbaijan National Archives. Balakhani, a suburb of Baku. View of Oil Rocks c. 1950s 2006 Central Azeri platforms