BP (BP)

United Kingdom

        The natural gas market in the UK is significant in size and is one of the most progressive in terms of deregulation when compared with other European markets. BP is one of the largest producers of natural gas in the UK based on volumes. Our total natural gas sales volumes in the UK were 4.7 bcf/d in 2004, 6.8 bcf/d in 2003 and 5.6 bcf/d in 2002. Of these volumes, 1.2 bcf/d (2003 1.4 bcf/d and 2002 1.6 bcf/d) were supplied by BP's Exploration and Production operations. The majority of natural gas sales are to power generation companies and to other gas wholesalers via long-term supply deals. Some of the natural gas continues to be sold under long-term natural gas supply contracts that were entered into prior to market deregulation. Commodity derivative contracts are used actively in combination with assets and rights to store and transport gas. This may include storing physical gas to sell in future periods or moving gas between markets to access higher prices. Commodity contracts such as over-the-counter forward contracts can be used to achieve this whilst other commodity contracts such as futures and options can be used to manage the market risk relating to changes in prices. The decline in the volumes of the activity, excluding sales of BP's own production, between 2003 and 2004 is primarily due to the overall UK market declining during the period. At the same time, however, the levels of power volumes traded increased most notably between 2002 and 2003 due to business growth.

        In the first quarter of 2005 we sold our 10% interest in the Interconnector, a 1.9-bcf/d, 240-kilometre, 40-inch diameter subsea natural gas pipeline between Bacton in the UK and Zeebrugge in Belgium.

United Kingdom

        The natural gas market in the UK is significant in size and is one of the most progressive in terms of deregulation when compared with other European markets. BP is one of the largest producers of natural gas in the UK based on volumes. Our total natural gas sales volumes in the UK were 4.7 bcf/d in 2004, 6.8 bcf/d in 2003 and 5.6 bcf/d in 2002. Of these volumes, 1.2 bcf/d (2003 1.4 bcf/d and 2002 1.6 bcf/d) were supplied by BP's Exploration and Production operations. The majority of natural gas sales are to power generation companies and to other gas wholesalers via long-term supply deals. Some of the natural gas continues to be sold under long-term natural gas supply contracts that were entered into prior to market deregulation.

        In the first quarter of 2005 we sold our 10% interest in the Interconnector, a 1.9-bcf/d, 240-kilometre, 40-inch diameter subsea natural gas pipeline between Bacton in the UK and Zeebrugge in Belgium.