BP PLC — M&A Activity 2007

Jun 22, 2007

News Details

Ad-hoc | 22 June 2007 16:30

BP PLC announces BP TNK-BP Gazprom Agreement

BP p.l.c. / Agreement

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

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June 22, 2007

BP AND TNK-BP PLAN STRATEGIC ALLIANCE WITH GAZPROM AS TNK-BP SELLS ITS
STAKE IN KOVYKTA GAS FIELD

BP and TNK-BP today announced that they have signed a memorandum of
understanding to create a strategic alliance with the Russian gas giant,
Gazprom, to invest jointly in major long-term energy projects or swap
assets around the world.

In a move designed to extend Gazprom's access to international markets and
deepen BP and TNK-BP involvement in Russian oil and gas, the companies will
establish a joint team to identify strategic opportunities for investment
both overseas and inside Russia.

'We will initially be looking for projects of at least $3 billion, but the
potential for further growth could be very significant,' said BP chief
executive Tony Hayward. 'This historic agreement lays the ground for
powerful co-operation between BP, TNK-BP and Gazprom.'

Dr Hayward said the companies would immediately set up a joint steering
group to look for suitable investment options 'across all geographies.'

'Our firm aim is to establish a venture that is strategic and long term,
with mutual benefits for the companies, both inside and outside Russia.'

Under the terms of the agreement signed by all parties, TNK-BP agreed to
sell Gazprom its 62.89 per cent stake in Rusia Petroleum, the company which
holds the licence for the Kovykta gas field in East Siberia. It will also
sell its 50 per cent interest in East Siberian Gas Company (ESGCo), the
company constructing the regional gasification project.

Gazprom will pay between $700-$900 million, subject to adjustments, for
TNK-BP's interests in Rusia and ESGCo.

TNK-BP said a longer-term 'call' option for TNK-BP to buy a 25 per cent
plus one share stake in Kovykta at an independently verified market price,
had also been agreed with Gazprom. This option could be exercised once a
significant joint investment or asset swap has been agreed under the terms
of today's memorandum of understanding.

President and CEO of TNK-BP, Bob Dudley noted: 'This is an important
development in the future growth of TNK-BP. We look forward to broadening
our working relationships with Gazprom and BP and to further developing our
Russian asset base as well as securing access to material additional
opportunities for TNK-BP.'

Notes to editors:

- BP is one of the world's largest energy companies. It operates across

six continents and employs around 97,000 people worldwide. Its products and
services are available in more than 100 countries and it explores for and
produces oil and gas in 26 countries. BP has made Russia a key element of
its long-term growth strategy and has conducted business there for more
than 15 years.

• Gazprom is Russia's largest company and the world's largest producer
  of natural gas. It holds about one quarter of total world gas reserves.
  Gazprom exports gas to 32 countries within and beyond the FSU. In 2005 the
  company sold 156.1 billion cubic metres of gas to European countries and
  with 76.6 billion cubic metres to the CIS and Baltic states.

• TNK-BP is the third largest oil company in Russia. In 2006 it produced
  1.9 million barrels of oil equivalent a day. It is owned and managed
  jointly by BP and Alfa Access Renova group.

• The Kovykta gas field is located some 450 kilometres from the city of
  Irkutsk in the north of the Irkutsk region of Eastern Siberia. It has
  estimated resources of approximately 2 trillion cubic metres of gas in
  place.

For further information contact:

BP Press Office: +44 (20) 7496 4076

TNK-BP Press Group:

Marina Dracheva: + 7495 363 6580
Alexander Shadrin: + 7495 745 7846
Vladimir Bobylev: + 7495 745 7846

DGAP 22.06.2007

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

End of News DGAP News-Service

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