27.04.2004 – 08:47

BP plc

euro adhoc: BP PLC
BP PLANS TO SELL OVER 50% OF PETROCHEMICALS BUSINESS - AND PREPARES FOR IPO (E)

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April 27, 2004

BP PLANS TO SELL OVER 50% OF PETROCHEMICALS

BUSINESS - AND PREPARES FOR IPO

BP announced today that it plans to consolidate the Olefins and
Derivatives (O&D) division of its petrochemicals business into a
stand-alone entity able to operate separately from the BP Group.

The new O&D business will incorporate more than half of the $13
billion of operating capital employed in BP's petrochemicals
portfolio, giving it the scale to be a major independent player in
the global petrochemicals sector.

It will be headed by Ralph Alexander, who was today named as chief
executive of BP's petrochemicals business with effect from July 1,
2004.

BP said it plans to sell O&D in due course, possibly through an
Initial Public Offering, depending on market circumstances and
necessary approvals, in the second half of 2005.

The Group intends to retain the balance of its petrochemicals
portfolio, comprising the aromatics and acetyls businesses. BP views
these as "advantaged products" where BP has leading proprietary
technology and strong positions in growing Asian markets.

Lord Browne spelt out BP's determination to tackle the continuing
poor returns of its petrochemicals segment overall at a strategy
presentation to investors in London and New York last month.

He said future investment would focus more on paraxylene, PTA and
acetic acid, and less on olefins and derivatives which form the bulk
of BP's petrochemical operations in Europe.

"We have now concluded that divesting O&D - perhaps by means of an
IPO, subject to market conditions and any necessary consents - is
likely to deliver the best returns to our shareholders and to be in
the best long-term interests of the O&D business itself," Browne said
today.

Current chief executive of BP Petrochemicals, Iain Conn, said: "Our
O&D sub-segment is one of the highest-quality portfolios of its kind
in the petrochemicals industry. It has a global network of
manufacturing sites, good technology, a fine range of products and
strong market positions. As a free-standing entity it will be a
significant competitor in its sector."

Notes to Editors:

· At a strategy presentation on March 29, 2004, Lord Browne said 
future investment would focus more on so-called "advantaged
products", including paraxylene, PTA and acetyls which were strong in
growing Asian markets and where BP has a proprietary technological
lead, and less on olefins and derivatives which dominated the
company's portfolio in the more fragmented and lower-growth European
markets.

· The O&D business employs approximately 7,500 people in 24
locations worldwide, chiefly the US and Europe. Major petrochemicals
sites include Grangemouth in Scotland, Lavera in France, Koln and
Gelsenkirchen in Germany, and Lima, Chocolate Bayou and Green Lake in
the US and the SECCO joint venture in China.

· BP recently announced the intended sale of its Fabrics & Fibres
and its Linear & Poly Alpha Olefins businesses. The intention to sell
these businesses remains unaffected by this announcement, but BP will
consider whether or not to include the sale of the Linear & Poly
Alpha Olefins businesses in the planned IPO of O&D.

· BP's products are used to make a wide variety of plastic goods,
including food and drink containers and wrappings, pipework,
automotive parts and mouldings of all kinds. Current worldwide
production capacity of O&D plants is some 20 million tonnes per year
of a BP Petrochemicals total of 34.5 million tonnes.

· O&D products include olefins (ethylene and propylene) and their
derivatives such as acrylonitrile, polyethylene, polypropylene and
solvents.

· Iain Conn will become a Group Executive Officer of BP with effect
from July 1, 2004 and assume Dick Olver's portfolio of
responsibilities, with the exception of the Western Hemisphere.

Full details of BP Petrochemicals sites, products, production
capacities and regional summaries can be found in the "financial and
operating information" download section of the bp.com website.

http://www.bp.com/liveassets/bp_internet/globalbp/STAGING/global_
assets/downloads/F/financial_and_operating_information_1999_2003_
petrochemicals.pdf .

Legal notice: This press release does not constitute an offer of any
securities for sale.

Further media enquiries:

- ENDS -

This information is provided by RNS
            The company news service from the London Stock Exchange

end of announcement        euro adhoc 27.04.2004

Further inquiry note:

BP press office - tel: +44 (0)20 7496 4827 / 4708 / 5256 / 4358 /
4624 / 4324 / 4076

Branche: Energy
ISIN: GB0007980591
WKN: 850517
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