BP (BP)

Overview of the Group

        For years to December 31, 2004, our operating business segments were Exploration and Production; Refining and Marketing; Petrochemicals; and Gas, Power and Renewables. Exploration and Production's activities include oil and natural gas exploration and field development and production (upstream activities), together with pipeline transportation and natural gas processing (midstream activities). The activities of Refining and Marketing include oil supply and trading as well as refining and marketing (downstream activities). Petrochemicals activities include manufacturing, marketing and distribution. The Petrochemicals segment ceased to report separately as from January 1, 2005 (see Resegmentation in 2005 in this Item on page 17). Gas, Power and Renewables activities include marketing and trading of natural gas, NGL, new market development and LNG, and solar and renewables. The Group provides high quality technological support for all its businesses through its research and engineering activities.

        These segments fall into two groupings: the Resources Business comprising Exploration and Production; and Customer Facing Businesses comprising Refining and Marketing, Petrochemicals and Gas, Power and Renewables.

        The Group's operating business segments are managed on a global basis and not on a regional basis. Geographical information for the Group and segments is given to provide additional information for investors, but does not reflect the way BP manages its activities. Information by geographical area is provided for production and reserves in response to the requirements of Appendix A to Item 4D of Form 20-F.

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        We have well established operations in Europe, the USA, Canada, South America, Australasia and parts of Africa. Currently, more than 70% of the Group's capital is invested in Organization for Economic Cooperation and Development (OECD) countries with just under 40% of our fixed assets located in the USA, and around 30% located in the UK and the Rest of Europe.

        We believe that BP has a strong portfolio of assets in each of its main segments:

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In Exploration and Production, we have upstream interests in 26 countries. In addition to our drive to maximize the value of our existing portfolio we are continuing to develop new profit centres. Exploration and Production activities are managed through operating units which are accountable for the day-to-day management of the segment's activities. An operating unit is accountable for one or more fields. Profit centres comprise one or more operating units. Profit centres are, or are expected to become, areas that provide significant production and income for the segment. Our new profit centres are in Asia Pacific, (Australia, Vietnam, Indonesia and China), Azerbaijan, North Africa (Algeria), Angola, Trinidad, Deepwater Gulf of Mexico and Russia, where we believe we have competitive advantage and which we believe provide the foundation for volume growth and improved margins in the future. We also have significant midstream activities to support our upstream interests.



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In Refining and Marketing, we have a strong presence in the USA. We market under the Amoco and BP brands in the Midwest, East, and Southeast, and under the ARCO brand on the West Coast. In Europe we have a strong retail position and increased our presence in 2002 by acquiring Veba Oil (Veba). The Veba transaction expanded our refining position in Germany and our marketing position in Germany and Central Europe. Veba markets gasoline under the Aral brand, which is now our principal retail brand in Germany and in the Czech Republic. We have established or are growing businesses elsewhere in the world under the BP brand.



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In Petrochemicals, we are a significant producer with strong manufacturing and marketing bases in the USA and Europe. We are growing in the Asia Pacific region, where we already have interests in a number of production facilities. Our strategy is focused on seven core products, with the aim of providing world-class performance in all aspects of our activities. We are now managing our portfolio in two distinct parts — Aromatics and Acetyls (A&A), comprising purified terephthalic acid (PTA), paraxylene (PX) and acetic acid, and Olefins and Derivatives (O&D) comprising principally ethylene and related co-products, polypropylene, high density polyethylene (HDPE) and acrylonitrile (see Resegmentation in 2005 in this Item on page 17).



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In Gas, Power and Renewables, we have growing marketing and trading businesses in North America (USA and Canada), the UK and the rest of Europe. Our marketing and trading activities include natural gas, LNG, NGL and power. Our international natural gas monetization activities, which are our efforts to identify and capture worldwide opportunities to sell our upstream natural gas resources, are focused on growing natural gas markets including the USA, Canada, Spain and many of the emerging markets of the Asia Pacific region, notably China. We are involved in power projects in the USA, UK, Spain and South Korea.

Overview of the Group

        For years to December 31, 2004, our operating business segments were Exploration and Production; Refining and Marketing; Petrochemicals; and Gas, Power and Renewables. Exploration and Production's activities include oil and natural gas exploration and field development and production (upstream activities), together with pipeline transportation and natural gas processing (midstream activities). The activities of Refining and Marketing include oil supply and trading as well as refining and marketing (downstream activities). Petrochemicals activities include manufacturing, marketing and distribution. The Petrochemicals segment ceased to report separately as from January 1, 2005 (see Resegmentation in 2005 in this Item on page 16). Gas, Power and Renewables activities include marketing and trading of natural gas, NGL, new market development and LNG, and solar and renewables. The Group provides high quality technological support for all its businesses through its research and engineering activities.

        These segments fall into two groupings: the Resources Business comprising Exploration and Production; and Customer Facing Businesses comprising Refining and Marketing, Petrochemicals and Gas, Power and Renewables.

        The Group's operating business segments are managed on a global basis and not on a regional basis. Geographical information for the Group and segments is given to provide additional information for investors, but does not reflect the way BP manages its activities. Information by geographical area is provided for production and reserves in response to the requirements of Appendix A to Item 4D of Form 20-F.

13

        We have well established operations in Europe, the USA, Canada, South America, Australasia and parts of Africa. Currently, more than 70% of the Group's capital is invested in Organization for Economic Cooperation and Development (OECD) countries with just under 40% of our fixed assets located in the USA, and around 30% located in the UK and the Rest of Europe.

        We believe that BP has a strong portfolio of assets in each of its main segments:

—

In Exploration and Production, we have upstream interests in 26 countries. In addition to our drive to maximize the value of our existing portfolio we are continuing to develop new profit centres. Exploration and Production activities are managed through operating units which are accountable for the day-to-day management of the segment's activities. An operating unit is accountable for one or more fields. Profit centres comprise one or more operating units. Profit centres are, or are expected to become, areas that provide significant production and income for the segment. Our new profit centres are in Asia Pacific, (Australia, Vietnam, Indonesia and China), Azerbaijan, North Africa (Algeria), Angola, Trinidad, Deepwater Gulf of Mexico and Russia, where we believe we have competitive advantage and which we believe provide the foundation for volume growth and improved margins in the future. We also have significant midstream activities to support our upstream interests.



—

In Refining and Marketing, we have a strong presence in the USA. We market under the Amoco and BP brands in the Midwest, East, and Southeast, and under the ARCO brand on the West Coast. In Europe we have a strong retail position and increased our presence in 2002 by acquiring Veba Oil (Veba). The Veba transaction expanded our refining position in Germany and our marketing position in Germany and Central Europe. Veba markets gasoline under the Aral brand, which is now our principal retail brand in Germany and in the Czech Republic. We have established or are growing businesses elsewhere in the world under the BP brand.



—

In Petrochemicals, we are a significant producer with strong manufacturing and marketing bases in the USA and Europe. We are growing in the Asia Pacific region, where we already have interests in a number of production facilities. Our strategy is focused on seven core products, with the aim of providing world-class performance in all aspects of our activities. We are now managing our portfolio in two distinct parts — Aromatics and Acetyls (A&A), comprising purified terephthalic acid (PTA), paraxylene (PX) and acetic acid, and Olefins and Derivatives (O&D) comprising principally ethylene and related co-products, polypropylene, high density polyethylene (HDPE) and acrylonitrile (see Resegmentation in 2005 in this Item on page 16).



—

In Gas, Power and Renewables, we have growing marketing and trading businesses in North America (USA and Canada), the UK and the rest of Europe. Our marketing and trading activities include natural gas, LNG, NGL and power. Our international natural gas monetization activities, which are our efforts to identify and capture worldwide opportunities to sell our upstream natural gas resources, are focused on growing natural gas markets including the USA, Canada, Spain and many of the emerging markets of the Asia Pacific region, notably China. We are involved in power projects in the USA, UK, Spain and South Korea.