BP PLC — M&A Activity 2007

May 30, 2007

News Details

Ad-hoc | 30 May 2007 08:15

BP p.l.c.: BP signs major deal in Libya

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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May 29, 2007

BP AGREES MAJOR EXPLORATION AND PRODUCTION DEAL WITH LIBYA

'BP’s single biggest exploration commitment,' says BP group chief
executive.

BP and its Libyan partner, the Libya Investment Corporation (LIC), today
signed a major exploration and production agreement with Libya’s National
Oil Company (NOC). The initial exploration commitment is set at a minimum
of $900million, with significant additional appraisal and development
expenditures upon exploration success.

The agreement was signed today in Sirt, Libya, by BP’s group chief
executive Tony Hayward and NOC chairman, Shokri Ghanem.

BP and the LIC will explore around 54,000 square kilometres (km2) of the
onshore Ghadames and offshore frontier Sirt basins, equivalent to more than
ten of BP's operated deepwater blocks in Angola. Successful exploration
could lead to the drilling of around 20 appraisal wells.
During this exploration and appraisal phase, BP will acquire 5,500km of 2D
seismic and 30,000km2 of 3D seismic and will drill 17 exploration wells.

'We are delighted to be working with the National Oil Company of Libya to
develop their natural resources for domestic and international markets. Our
agreement is the start of an enduring, long-term and mutually beneficial
partnership with Libya,' said Tony Hayward, BP group chief executive.

'With its potentially large resources of gas, favourable geographic
location and improving investment climate, Libya has an enormous
opportunity to be a source of cleaner energy for the world,' said Hayward.

'This is a welcome return to the country for BP after more than 30 years
and represents a significant opportunity for both BP and Libya to deliver
our long term growth aspirations,' said Hayward. 'It is BP’s single biggest
exploration commitment.'

BP will spend $50 million on education and training projects for Libyan
professionals during the exploration and appraisal period, and, upon
success, a further $50 million from commencement of production. The
education and training programmes will be designed and managed in
partnership with the NOC.

'The agreement reached today is a great success for Libya, the NOC and also
for BP,' said Hayward.

Note to editors

• For comparison, the acreage awarded in the North Ghadames block alone
  is the size of Kuwait. The acreage in the offshore Sirt basin is the
  size of Belgium or nearly three North Sea quadrants. In total the
  acreage is more than ten times the size of BP-operated Block 31 in
  Angola where BP has announced 14 discoveries so far, or more than 2000
  Gulf of Mexico deepwater blocks.

• This agreement follows a Memorandum of Understanding signed between
  BP and the NOC in October 2005. BP submitted its formal proposal to the
  NOC in April 2006. Negotiations commenced in July 2006.

• This agreement represents a significant step forward in meeting the
  NOC’s objectives as set out in its ‘Exploration Master Plan’ for
  2005-2015. The Master Plan seeks to increase reserves to 20 billion
  barrels of oil equivalent by increasing exploration in offshore
  and ‘frontier’ areas and through the application of modern exploration
  technologies, and to increase production to 3.5 million barrels per day
  (mmbpd) by 2020 (the equivalent production rate of the 1970s). To
  achieve this, the NOC is targeting a minimum of 50 wildcat wells
  drilled per year and the shooting of a minimum of 4000 km2 of 3D
  seismic and 10,000 km of 2D seismic per year. These targets will be met
  through existing NOC and Joint Venture operations and through
  investment by international oil companies expected to total some
  $7 billion.

• Sirt and Ghadames are two of Libya’s five major basins. Sirt onshore
  has been the most productive to date, having produced over 20 billion
  barrels of oil equivalent.

• Offshore deepwater Sirt is believed to be ‘on trend’ geologically with
  onshore Sirt and is thought to be a buried rift with multiple play
  opportunities like those found in the North Sea where BP has
  considerable experience.

• Ghadames basin is thought to be part of, and similar geologically, to
  the prolific Illizi and Berkine basins. Previous drilling in the 1970s
  and 1980s was based on early vintage 2D seismic data. BP plans to
  acquire extensive 3D seismic data using proprietary and the latest
  technologies. The offshore, deepwater Sirt acreage in water depths
  beyond 2000m, up to 300 km offshore is presently unexplored. It is
  considered a frontier deepwater basin, and a potential extension of the
  onshore Sirt basin.

• The Libyan Investment Corporation is a corporate entity headquartered
  in Tripoli, Libya. It was established by Decree 208 (dated August 28th
  2006) of the Libyan General Peoples’ Committee (the Libyan Cabinet).
  The LIC is an ‘umbrella’ organisation that oversees and manages a
  series of government investment funds, which invest in opportunities in
  Libya and internationally – most notably in Africa and the Arab world
  – in areas such as agriculture, real estate, infrastructure, oil and
  gas and in shares and bonds.

• BP is one of the world’s largest oil and gas companies, producing
  almost 4 million barrels of oil and gas and serving millions of
  customers every day. It operates in more than 100 countries across six
  continents. BP’s business segments are Exploration and Production;
  Refining and Marketing; and Gas, Power and Renewables which includes
  its Alternative Energy business. Through these business segments, BP
  provides fuel for transportation, energy for heat and light, retail
  services, and petrochemicals products.

• The education and training programmes being considered include
  upgrading NOC’s two primary Petroleum Training Centres; enhancing the
  skills of Libyan technicians and operators; developing a learning and
  competency development programme for Libyans in technical and
  professional roles, including in senior management positions; enhancing
  English language skills; and developing training programmes for Libyan
  suppliers and service companies to enhance their ability to compete for
  contracts with international oil companies. Opportunities to enhance
  Libya’s formal education system will be explored, including academic
  exchanges between Libyan institutions and international centres of
  excellence.
  – ENDS –

Further information:

BP Press Office +44 (0)207 496 4076 out of hours 0207 496 5129.
Robert Wine: +44 (0)207 496 4827; m (0)7776 166439
David Nicholas: +44 (0)207 496 4708; m (0)7831 095541
Sheila Williams: m (0)7788 190449

DGAP 30.05.2007

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
www: www.bp.com
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