BP (BP)

Acquisitions in 2002

        During the year BP acquired the whole of Veba Oil (Veba) from E.ON in two stages. Veba owns Aral, Germany's biggest fuels retailer. In February BP paid $1,072 million to subscribe for new shares issued by Veba and acquired $1,520 million of outstanding loans from E.ON to Veba in return for a 51% interest in and operational control of Veba. In addition, there were acquisition expenses of $30 million. Subsequently, on June 30, BP paid E.ON a further $2,386 million to acquire the remaining 49% of Veba. There were further acquisition expenses of $30 million. The total consideration of $5,038 million was subject to final closing adjustments. As well as a refining and marketing business, Veba also had an exploration and production business. With the exception of the Cerro Negro field in Venezuela, the

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whole of these activities was sold in May 2002, mainly to Petro-Canada. These activities represent the Businesses held for resale in the table set out below.

        Other transactions in 2002 included buying our co-venturers' 15% interest in the Atlantic Richfield polypropylene joint venture and acquiring the 51% BP did not own in certain Chinese LPG ventures. All these business combinations have been accounted for using the acquisition method of accounting. The assets and liabilities acquired as part of the 2002 acquisitions are shown in aggregate in the table below. The identifiable assets and liabilities of Veba were not revalued on the acquisition of the 49% minority interest in June, as the difference between the fair values and the carrying amounts of the assets and liabilities was not material. Additional goodwill of $203 million was originally recognized on the acquisition of the minority interest in Veba. This has been reduced to $61 million following the revisions to the fair values described below.

        The fair values of the assets and liabilities of Veba included in the accounts for the year ended December 31, 2002 have been subject to further investigation and review during 2003, as permitted by Financial Reporting Standard No. 7 'Fair Values in Acquisition Accounting'. The revisions to the previously reported fair values are as set out below.

Acquisitions in 2002

        During the year BP acquired the whole of Veba Oil (Veba) from E.ON in two stages. Veba owns Aral, Germany's biggest fuels retailer. In February BP paid $1,072 million to subscribe for new shares issued by Veba and acquired $1,520 million of outstanding loans from E.ON to Veba in return for a 51% interest in and operational control of Veba. In addition, there were acquisition expenses of $30 million. Subsequently, on June 30, BP paid E.ON a further $2,386 million to acquire the remaining 49% of Veba. There were further acquisition expenses of $30 million. The total consideration of $5,038 million was subject to final closing adjustments. As well as a refining and marketing business, Veba also had an exploration and production business. With the exception of the Cerro Negro field in Venezuela, the

F - 33

whole of these activities was sold in May 2002, mainly to Petro-Canada. These activities represent the Businesses held for resale in the table set out below.

        Other transactions in 2002 included buying our co-venturers' 15% interest in the Atlantic Richfield polypropylene joint venture and acquiring the 51% BP did not own in certain Chinese LPG ventures. All these business combinations have been accounted for using the acquisition method of accounting. The assets and liabilities acquired as part of the 2002 acquisitions are shown in aggregate in the table below. The identifiable assets and liabilities of Veba were not revalued on the acquisition of the 49% minority interest in June, as the difference between the fair values and the carrying amounts of the assets and liabilities was not material. Additional goodwill of $203 million was originally recognized on the acquisition of the minority interest in Veba. This has been reduced to $61 million following the revisions to the fair values described below.

        The fair values of the assets and liabilities of Veba included in the accounts for the year ended December 31, 2002 have been subject to further investigation and review during 2003, as permitted by Financial Reporting Standard No. 7 'Fair Values in Acquisition Accounting'. The revisions to the previously reported fair values are as set out below.