BP PLC — Environmental & Social Information 2007

Jun 26, 2007

News Details

Ad-hoc | 26 June 2007 12:30

BP p.l.c.: BP Biofuels Investment

BP p.l.c. / Miscellaneous

Release of an Ad hoc announcement according to § 15 WpHG, transmitted by
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The issuer is solely responsible for the content of this announcement.

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June 26, 2007

                BP, ABF AND DUPONT UNVEIL $400 MILLION
                      INVESTMENT IN UK BIOFUELS

The wide spread availability of biofuels in the UK took a major step
forward today as BP, Associated British Foods (ABF) and DuPont announced
major investment plans, totalling around $400 million, for the construction
of a world scale bioethanol plant alongside a high technology demonstration
plant to advance development work on the next generation of biofuels.

The bioethanol plant, in which BP and ABF subsidiary British Sugar would
each hold 45 per cent with DuPont owning the remaining 10 per cent, will be
built on BP's existing chemicals site at Saltend, Hull. Due to be
commissioned in late 2009, it will have an annual production capacity of
some 420 million litres from wheat feedstock.

Although initial production would be bioethanol, the partners will look at
the feasibility of converting it to biobutanol once the required technology
is available.

'We are delighted to be announcing, subject to the necessary approvals, the
construction of a world scale bioethanol plant in Hull with our partners
ABF and DuPont to enable petrol biocomponents to be available to meet the
2010 Renewable Transport Fuel Obligation,' said Iain Conn, chief executive
officer of BP's refining and marketing business. 'In addition we have also
selected Hull as the preferred location for a planned biobutanol
demonstration plant as laboratory research work on the production of this
first advanced biofuel that we and partners DuPont will bring to market is
progressing well.'

Discussions are currently underway to explore strategic partnerships with
grain trading business Frontier Agriculture for the supply of locally grown
wheat feedstocks and with co-product marketing company AB Agri in relation
to DDGS, a byproduct of bioethanol manufacture. It is expected that formal
agreements would be finalised after regulatory approvals are obtained.

'We are delighted that this exciting new project has achieved this
important milestone, and are confident that construction work will commence
early next year after the required regulatory approvals are obtained,' said
Mark Carr, CEO of British Sugar. 'Front end engineering and design work
will commence immediately with Aker Kvaerner leading the project and their
joint venture partner Praj providing the technology expertise.'

Although the plant will be built from scratch, it will have access to the
existing infrastructure at the BP site for essential supporting services.
Once operational it will provide around 70 new full-time posts in addition
to the employment opportunities generated by the construction phase.

The BP site in Hull has also been selected as the preferred location for a
planned biobutanol demonstration plant, funded and owned equally by BP and
DuPont which could produce around 20,000 litres of biobutanol a year from a
wide variety of feedstocks.

'Over the last year, we have accelerated the commercial development of
biobutanol,' said John Ranieri, head of DuPont Biofuels. 'The demonstration
facility, which will begin operation in early 2009, will develop the
processing parameters and further advance the commercial deployment of our
new technology. At the same time, the growing market demand for biofuels is
significant. We are concurrently investing in the Hull bioethanol facility
with the intention to increase that investment once biobutanol process
technology development is completed and conversion feasibility is
validated.'

To begin market development of biobutanol, BP and DuPont are also
establishing initial introduction plans for biobutanol in the UK. The
companies will import small quantities of biobutanol, sourced from an
existing first generation manufacturing facility in China. The first
product is expected to arrive by the end of the year and will be used to
carry out infrastructure and advanced vehicle testing.

This testing will build upon initial laboratory engine tests using
conventional butanol which indicated that butanol has similar fuel
performance properties to unleaded petrol. In addition, work will be
undertaken to gather comprehensive data on the environmental footprint and
sustainability of this next generation fuel.

'The three initiatives we have announced today represent a significant
first step in delivering BP's strategy for biofuels,' commented Phil New,
head of BP Biofuels. 'As a UK based company, BP is delighted to be the
first energy company to commit significant resources to building this
important market of the future in the UK, and at the same time, bring a new
product of global relevance closer to reality.'

Notes to Editors:

· An electronic press kit, including downloadable images, is available
at http://www.launchgroup.co.uk/epk/bpbiofuels/

· Transport accounts for around 21 per cent of all carbon dioxide
emissions.

· The Renewable Transport Fuel Obligation (RTFO) requires 5 per cent of UK
transport fuel to come from biofuels by 2010.

· BP and DuPont announced the creation of a partnership to develop,
produce and market a next generation of biofuels in June 2006. The
partnership leverages DuPont's world-class biotechnology and
bio-manufacturing capabilities with BP's fuels technology expertise and
market knowledge.

· Biobutanol has a low vapour pressure and its tolerance to water
contamination in gasoline blends facilitate its use in existing gasoline
supply and distribution channels. It has the potential to be blended
into gasoline at larger concentrations than existing biofuels without
the need to retrofit vehicles and it offers better fuel economy than
gasoline-ethanol blends, improving a car's fuel efficiency and mileage.

· BP is already a leading player in the biofuels market, accounting for
around 10 per cent globally, blending and distributing 800 million
gallons of ethanol in 2006.

· BP is funding a $9.4 million project in India to demonstrate the
feasibility of producing biodiesel from jatropha curcas.

· BP's Bulwer Refinery in Queensland, Australia will produce around 110
million litres of biodiesel a year from tallow feedstock.

Further information:

BP Press Office, London, tel: +44 (0)207 496 4076
Associated British Foods, London, tel: +44 (0)207 399 6500
DuPont Press Office, USA, tel: +1 302 774 7447

-ENDS-
DGAP 26.06.2007

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Language: English
Issuer: BP p.l.c.
1 St James's Square
SW1Y 4PD London Großbritannien
Phone: +44 (0) 207-496-4000
Fax: +44 (0) 207-496-4570
E-mail: ir@bp.com
Internet: www.bp.com
ISIN: GB0007980591
WKN: 850517
Indices:
Listed: Amtlicher Markt in SWX; Freiverkehr in Berlin-Bremen,
Stuttgart, München, Hamburg, Düsseldorf; Open Market in
Frankfurt

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