Slide 1 of 37 26 June, 2000 Flaws in the Capital Allocation Process The Capex requirements The Over-promise on delivery The Way Ahead Excom Early Look.

Slide 1 of 37

26 June, 2000

• Flaws in the Capital Allocation Process • The Capex requirements • The Over-promise on delivery

• The Way Ahead

Excom Early Look Business Plan 2000

Slide 2 of 37

26 June, 2000

The Good News• High quality internally consistent data

submissions

• Abundance of projects competing for funds:

–1.9 bln US$ Exploration–7.0 bln US$ Production

Slide 3 of 37

26 June, 2000

The Bad News• Projects appear over-optimistic both in

Exploration and Production

• The Capital Allocation Process appears to be flawed with overstatements of key parameters to secure funds

We run the risk of initiating an Over-promise Under-delivery Cycle……...

Slide 4 of 37

26 June, 2000

Exploration-Overstated Value?

0

10002000300040005000600070008000

900010000

1100012000

0 250 500 750 1000 1250 1500 1750 2000Cum Expex ($ mln)

Cu

mu

lati

ve IB

V (

$ m

ln)

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

0-10 10-20 20-30 30-40 40-50 50-60 60-70 70-80 80-90

1999 CA

2000 CAPos to FID showsno major differences in 99 submission to 2000

Pos to FID

Exp

ex S

pen

d

(No

rmal

ised

)

Salkhalin pre-consolidation 2000 Raw Data Submission

Each Exploration $ spend in 2001 adds $9 IBV at PSV14

1999 Raw Data Submission Each Exploration $ spend in 2000 adds $6 IBV at PSV14

Slide 5 of 37

26 June, 2000

0

100

200

300

400

500

600

2001 2002 2003 2004 2005 2006 2007

Oil

Nigeria

MRH

Gas

Deepwater

Time to FID and first productionin data submissions very optimistic

and unrelated to historic performance

The majority of 2001 exploration spend is for projects planned

to take FID in 2002

Exploration: Overstated Delivery?E

xpex

200

1 ($

mln

)

Slide 6 of 37

26 June, 2000

US

$ m

ln M

OD

CAPEX REQUEST 2001-2005Raw Data Submission

EP-Global Capex per CA Cat, Theme.ep

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

2001 2002 2003 2004 2005

Commercial Resource Proposed A & D Activity New E & A Firm E & A EB2

New Dev. > $20 mln Shell Share Tranche 3 Tranche 2 Tranche 1

PostFID Project Corporate Existing Asset

Proposed spend is ca $7 bln per year over the Plan Period*

*including follow-on E&A Woodside, and Shell Canada, excludes Saudi gas

Total Capex request 2001 = $7.1 blnTotal Commitments 2001 = $2.7 bln

Commitment levels suspect

Slide 7 of 37

26 June, 2000

Production Forecast per Region and CA Cat - Raw data.rep

0

500

1000

1500

2000

2500

3000

3500

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Production: Can we deliver on this promise?

Nigeria (SPDC)

Nigeria (SNEPCO)

Others

2266 LE

2291235123272319

Nigeria is major part of EP GrowthInside existing portfolio …..

Others are USA, Angola, Iran, Athabasca, Brasil, etc

Da

ily P

rod

uc

tio

n (

Kb

oe

/d)

Slide 8 of 37

26 June, 2000

Production Forecast per Region and CA Cat - Raw data.rep

0

500

1000

1500

2000

2500

3000

3500

2000 2001 2002 2003 2004 2005

Commercial Resource

Proposed A & D Activity

New E & A (Non Approved expex)

Firm E & A (Approved expex Funds)

EB-2

New Dev. > $20 mln Shell Share

Tranche 3

Tranche 2

Tranche 1

PostFID Project

Corporate

Existing Asset

OIL PRODUCTION 2001-2005Raw Data Submission

Pro

du

cti

on

‘000

bb

l/d

Oil Production from ExistingAssets halves during Plan Period (10 % per year)

Post FID and tranches replacesdecline in Existing Asset base

Growth relies on E&A

Slide 9 of 37

26 June, 2000

Major Concerns• Existing Assets require 800 Million US$ in 2001 without

adding production...

• Most large post-FID projects indicate underdelivery compared with 1999

• New projects have very aggressive FID dates (36 FIDs in 2001 excluding big tickets e.g. Saudi Gas) and possibly overstated value promises

• E&A Follow Up extremely optimistic when compared with history

• Not enough funds for promising projects and strategic options

Slide 10 of 37

26 June, 2000

CAPEX CREAMING CURVE

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

0 1000 2000 3000 4000 5000 6000 7000

Existing Asset

Post FID ProjectOptions

NP

V (

$mln

)

Cumulative Capex in 2001 ($mln)

The promiseThe delivery

AOSPEA NLNG

Bonga MainMalampaya

Historical performance raises questions over ambitious future promises

But…some big projects approved were poorer ranking

Slide 11 of 37

26 June, 2000

Exploration Discoveries 1990-1999Development Percentage @1.1.2000

0%

20%

40%

60%

80%

100%

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001

90-94 25% Developed

95-99 7% Developed

10 years ONLY 15% Developed

34%

5 yearPlan Period

Promise

Plan Excl. Sakhalin & OKIOC

>> 34% Development percentage Exploration discoveries within 5 years has not been achieved to date ….

Bonga discovered ‘95, onstream 2003 Brazil, not a well drilled yet, production by 2005

SableIsland

Slide 12 of 37

26 June, 2000

Shell Malaysia (total) KN ROUND 2 01-2000 1999Shell Malaysia (total) KN S1S2 01-2000 1999Shell Iran Soroosh /Nowrooz 01-2000 11-1999Shell USA Oregano 05-2000 04-2000Shell USA Serrano 05-2000 04-2000

Norske Shell Garn West 03-2000 04-2000Shell USA North Marlin 04-2000 07-2000

Shell UK Expro Mandarin 10-2000 09-2000

Turkmenistan, Uzbekistan, Uzbekistan Alan & Kandym 07-2000 01-2001

Brunei Shell Champion West Existing Facilities 12-2000 01-2001

SOGU Dan Infill and Debottlenecking 03-2000 03-2001

Shell Egypt N.V. Obaiyed South Devt 11-2000 07-2001Shell UK Expro Goldeneye 10-2000 12-2001

Shell Australia NWS LNG Expansion U/S 03-2000 01-2004Shell Australia ALNG LNG Train 1 U/S 09-2000 01-2004Brunei Shell Egret Development 10-2000 01-2004

Shell Capsa Cerro Tuyunti Sth. 11-2000 ?

Shell USA Na Kika 05-2000

Shell UK Expro Cleaver Bank High 10-2000 10-2001

A/S Norske Shell Sogn Gjoa Development 09-2000 ?Shell Devt. Pakistan B.V. Kirthar Block : Bhit dev 03-2000 ?

Country Projects with FIDs in 2000

MAJOR PROJECT FIDs 2000 from BP’99

BP ‘99 Timing

CA 2000 Timing

07-2000

SPDC Cawthorne Channel 09-2000 10-2000SPDC Bonny Terminal Refurbishment 07-2000 07-2000

Slipped

On-time

Slide 13 of 37

26 June, 2000

MAJOR PROJECT FIDs 2000 from BP’99

No

of

Maj

or

FID

s in

Pla

n

•12 major Base Plan projects planned for FID in 2000 (BP 99) - 5 will now take FID• 13 major Options projects planned for FID in 2000 (BP 99) - 6 will now take FID

0

5

10

15

20

1999 99 Actual 2000 00 LE 2001

BangestanKuwait Oil25

30 ChampionDan Infill T2T upstreamCleaver BankEgretBangestanObayied SouthGoldeneye

25

30Options DeferredBase Deferred

Options Plan/Actual

Base Plan/Actual

36

Slide 14 of 37

26 June, 2000

Country ProjectVAR coverage in 2001

on Total Capex

MAJOR PROJECTS WITH PROMISES OF FID IN 2001….

36 Projects with >20 mln spend excluding Major Options e.g. Bangestan, Saudi Gas

Total Capex from 2001 FIDprojects amounts to $4 bln in plan period

Australia (Direct) Gorgon SMDS Upstream 0Brunei Champion West Central Platform Dev 1Brunei East Gas Expansion 4Brunei Egret Development. Phase 1 3

Denmark Halfdan Phase III 102Denmark Halfdan Phase II 41Denmark GSA4 13Denmark Dan Infill and Debottlenecking 8Denmark Skjold Phase II 32Egypt Obaiyed South & Compression I 26

Malaysia 96 PSC : BT/SF Stage IVC(SF30) WI Int. 1New Zealand Pohokura Development 3Nigeria (SNEPCO) Erha Main 48Nigeria (SNEPCO) EWTF (Extended Well Test Facility) 118Nigeria (SPDC) 92 Offshore Pipeline AF - NLNG 1-5 87Nigeria (SPDC) 49 UGHELLI 24Nigeria (SPDC) 66 OTUMARA - NLNG 4/5 16Nigeria (SPDC) 67 SAPELE 1Nigeria (SPDC) 45 OGUTA 3Nigeria (SPDC) 61 BONNY - NLNG 3 1Nigeria (SPDC) 98 WAGP 22

FID (5 %)

Concept (3 %)

Feasibility (42 %)

Initiation

(<1 %)

No VAR

(50 %)

2001Capex

2001-2005Capex (Risked)

46753840

475657542

3285

3126

902128184122117907729

22

Slide 15 of 37

26 June, 2000

Norway Kollsnes and Vestprosess Upgrade 0Philippines Malampaya Oil Rim Devt - unrisked 6Russia (Rest of) Salym 29Syria Souedie 0UK Goldeneye 7UK Loyal Phase II (W.o.S) 31UK Puffin Field Development 9UK Schiehallion Extension Claw 9UK Scoter 0UK Schiehallion North Channel 0

USA Holstein 26USA Habanero 0USA Manatee 14USA Alex Gas Devt Phase 2 22Venezuela 02 - 05 Further Dev. (1) 0

MAJOR PROJECTS WITH FID IN 2001 - continued

FID (5 %)

Concept (3 %)

Feasibility (42 %)

Initiation

(<1 %)

No VAR

(50 %)

Country Project VAR coverage in 2001 on Total Capex

Total Capex from 2001 FIDprojects circa $4 bln in plan period

2001Capex

2001-2005Capex (Risked)

5383

12926

1516562575521

32739332264

36 Projects with >20 mln spend excluding Major Options e.g. Bangestan, Saudi Gas

Slide 16 of 37

26 June, 2000

Existing Assets / Post FID Ranking (2001 Capex > $20 million)$

14/b

bl A

ttra

cti

ven

ess

Strategic ImperativeLow Medium High

High

Medium

Low

124

37

689

5

$14/bbl

45%

65%

MRHNigeriaDeepwaterGasOil

Australia - NWS Existing US

Canada Existing Assets

Malaysia - MLNG PSC New (F23/F6/E11 Comp.)

Netherlands -NAM Plan - Scenario 1

Abu Dhabi - Existing Oil Business

Denmark - Halfdan Phase I

Oman - 1a PB01M NFA TRAN1 2000 W

Syria - AFPC Existing Facilities

UK - Existing assets

Oman - GISCO

Philippines - Malampaya Gas Devt

SPDC - 42 FORCADOS YOKRI - NLNG 3

SPDC - 48 SOKU - NLNG 1-2

USA - Brutus

USA - Crosby

Argentina - VALLE MORADO

Egypt - POST FID Obaiyed

Malaysia - MLNG Dua PSC New (M4. B11. etc)Iran - Soroosh/Nowrooz Integ.SPDC - 90 EA Equity and Carry - NLNG 3

SPDC - 91 Offshore Pipeline - NLNG 1-5

Canada - Athabasca Oil Sands Project

Brunei - Ampa Fairley Rationalisation Phase 1

USA - UrsaUK - ExAss Brent Gas Contract

SNEPCO - Bonga-Main

SPDC - 02 Value PreservationSPDC - 03 Bonny TerminalNorway - Troll OilRussia - Caspian Pipeline ConsortiumSakhalin - MolikpaqUK - ExAss SkuaUSA - Aera Equity

Slide 17 of 37

26 June, 2000

$14

/bb

l Att

rac

tive

ne

ss

Strategic ImperativeLow Medium High

High

Medium

Low

124

37

689

5

$14/bbl

45%

65%

MRHNigeriaDeepwaterGasOil

Base

Options

Egypt - Obaiyed South & comp. I

Netherlands - NAM Plan - Scenario 3

Netherlands - NAM Scenario 2 - 1st Increml trancheUK - Tranche1 FID01USA - Tranche 1. DW. non-EB2. FID 2001SPDC - 49 UGHELLIOman - 2aPB01M DEV TRAN1 2000 W

Syria - AFPC Tranche 1a (FID 2000)

Thailand - Tranche 1 S1 2000

UK -Tranche1 FID00 committed

USA - Oregano

USA - Holstein

SNEPCO - Ext. WTF

Russia - Salym

UK - Tranche1 FID01 FOP

UK - Schieh infill 1

UK - Loyal Phase II

UK - Magnus EORUSA - Offshore PipelineIran - Ahwaz Area Major Bangestan Reservoir DevelopmentSPDC - 92 Offshore Pipeline AF - NLNG 1-5

USA - Nakika

UK - Tranche3 FID01 FOP

UK - Foin Infill1

UK - Foinaven East

SNEPCO - Erha Main

UK - Tranche 3 FID01 FOP

USA - SerranoDenmark - Gas DevelopmentsSPDC - 41 CAWTHORNE CHANNEL - NLNG 3SPDC - 46 SOUTH FORCADOS - NLNG 3SPDC - 114 H BLOCK Appr. (2001-AF)Denmark - Skjold Phase IIDenmark - Halfdan Phase IIDenmark - Halfdan Phase IIIOman - 7a PB01M DEV TRAN2 2000 WUK - MandarinUSA - Tranche 1. non-DW. non-EB2. FID 2001UK - Tranche 2 FID00 committedUSA - Tranche 2. non-DW. non-EB2. FID 2001USA - Alex Phase 2UK - Penguin DevelopmentUK - Goosander

EM

PT

Y

$ 5.5 BLN CAPEX CEILING FOR EXISTING OUs Tranches 1-3 & New Projects (FID Q3+ 2000 & 2001 Capex > $20 mln)

Slide 18 of 37

26 June, 2000

Tranches 1-3 & New Projects (FID Q3+ 2000 & 2001 Capex > $20 mln)

$14

/bb

l Att

rac

tive

ne

ss

Strategic Imperative

Low Medium High

High

Med

ium

Low

12

4

37

689

5

$14/bbl

45%

65%

MRHNigeriaDeepwaterGasOil

Base

Options

Syria - AFPC Tranche 1a (FID 2000)

Thailand - Tranche 1 S1 2000

UK -Tranche 1 FID00 committed

USA - Oregano

USA - HolsteinSNEPCO - Ext WTF

Russia - Salym

UK - Tranche1 FID01 FOP

UK - Schieh infill 1

UK - Loyal Phase II

UK - Magnus EORUSA - Offshore PipelineIran - Ahwaz Area Major Bangestan Reservoir DevelopmentSPDC - 92 Offshore Pipeline AF - NLNG 1-5

USA - Nakika

UK - Tranche3 FID01 FOP

UK - Foin Infill1UK - Foinaven East

SNEPCO - Erha Main

UK - Tranche 3 FID01 FOP

USA - SerranoDenmark - Gas DevelopmentsSPDC - 41 CAWTHORNE CHANNEL - NLNG 3SPDC - 46 SOUTH FORCADOS - NLNG 3SPDC - 114 H BLOCK Appr. (2001-AF)Denmark - Skjold Phase IIDenmark - Halfdan Phase IIDenmark - Halfdan Phase IIIOman - 7a PB01M DEV TRAN2 2000 WUK - MandarinUSA - Tranche 1. non-DW. non-EB2. FID 2001UK - Tranche 2 FID00 committedUSA - Tranche 2. non-DW. non-EB2. FID 2001USA - Alex Phase 2UK - Penguin DevelopmentUK - Goosander

Egypt - Obaiyed South discovery & compression INetherlands - NAM Plan - Scenario 3Netherlands - NAM Scenario 2 - first incremental trancheUK - Tranche1 FID01SPDC - 49 UGHELLIOman - 2aPB01M DEV TRAN1 2000 WUSA - Tranche 1. DW. non-EB2. FID 2001

Total Capex (2001) in Box 1 is $470 mlnTotal Capex (2001) Box 2 is $200 mln

Total Capex (2001) inBox 3 is $910 mill

EM

PT

Y

Projects inserted to Base Plan

$ 5.5 BLN CAPEX CEILING……DENMARK & BIG PROJECTS IN

Slide 19 of 37

26 June, 2000

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

50000

55000

0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000 11000

CAPEX CREAMING CURVENPV Bln $

Cumulative Capex in 2001

AOSP

EA NLNG

Malampaya Deepwater OptionsNa KikaHolsteinSerranoOregano

Existing Assets Post FID

New Devt & Tranches Big Tickets

Bonga Main

Eh

raA

ng

ola

18

De

vB

an

ge

sta

nS

ak

ha

lin

Za

po

lya

rno

ye

So

uth

Pa

rs

Bra

zil

Ch

ina

Wo

od

sid

e D

ea

lS

au

di

Ga

sL

iby

aN

EM

ED

FID in next 30 months

Success Case $ 3-4 Bln/yr

Slide 20 of 37

26 June, 2000

The Way Forward..(1)• We accept the flaws in the process, challenge the submissions at the

workshop, build the 2000 Plan and make a “promise adjustment” at Excom level:

– existing assets minus 200 Million US$– post-FID minus 400 Million US$– weed out “false promises” to the tune of 400 Million US$– adjust production promise

Manage Improvement through the scorecards

We must address the integrity flaws in the CA process and send a very strong signal...

Slide 21 of 37

26 June, 2000

• We demand a resubmission….we change the workshop:

– We explain our problems to the delegates at workshop.– We ask the delegates to return to their OU/NVOs and rework their

submissions and restore reality– Key OU/NVOs will be invited for a hard challenge session with the

Excom (large OUs) or their RBD.

• After resubmission of sanitised data, a final ranking will be done with the RBA/RFA community.

The Way Forward..(2)

Slide 22 of 37

26 June, 2000

Two Possible Schedules

Workshop

Workshop

OUFinancials

Allocation

Final OU Plan

OUFinancials

Excom Adjustment

Improve

Resub-mission

Final OU Plan

27-28/6 10/7 6/9 14/9

Improve

10/7 17/7 28/7 6/9

Improve/challenge EPB-RBD

Slide 23 of 37

26 June, 2000

BACKUPS ….DETAILS

Slide 24 of 37

26 June, 2000

BaseCapex 2001 IBV $14 Boe/d 2001 Boe/d 2002 Boe/d 2003

Deepwater 454 5418 395 438 386

Gas 1238 16551 1351 1323 1361

MRH 278 34 139 180 205

Nigeria 1291 4509 265 288 494

Oil 2308 14271 1586 1524 1438

Total 5570 40783 3735 3754 3884

OptionsCapex 2001 IBV $14 Boe/d 2001 Boe/d 2002 Boe/d 2003

Deepwater 520 29176 2 33 100

Gas 469 20702 12 65 139

MRH 83 1582 0 5 12

Nigeria 220 4116 7 38 59

Oil 466 10374 41 169 286

Total 1757 65950 63 312 597

KEY METRICS - RAW DATA

Deepwater excludes SNEPCORanked out production in 2001 63,000 bbls/dDoes not reflect OUs outside EP control - (SOGU)

Value continues to be dominated by traditional OUsNigeria dominance of production growth not reflected in value

Slide 25 of 37

26 June, 2000

Country Name Project Name CA Cat FID yr Status 2001 Capex 2001 MBOE/d

UK Tranche 2 FID00 FOP Tranche 2 2000 Option 5.96 4.40

UK Tranche 3 FID00 FOP Tranche 3 2000 Base 12.60 21.27

UK Tranche1 FID00 FOP Tranche 1 2000 Base 15.46 22.73

UK Tranche1 FID01 FOP Tranche 1 2001 Option 25.23 5.08

UK Tranche1 FID02 FOP Tranche 1 2002 Option 0.29 0.00

UK Tranche2 FID01 FOP Tranche 2 2001 Option 8.51 1.03

UK Tranche2 FID02 FOP Tranche 2 2002 Option 0.00 0.00

UK Tranche3 FID01 FOP Tranche 3 2001 Option 31.91 2.39

UK Tranche3 FID02 FOP Tranche 3 2002 Option 0.00 0.00

Sum: 99.94 56.89

Short Term Oil Projects are predominantly in Shell Expro…..

UTCs $3.5 - 5.5/bblVIRs [$14] 0.4 - 0.8 low / medium strategic fit. …….

SHORT TERM OPPORTUNITIES ….RANKED OUT

Slide 26 of 37

26 June, 2000

CAPEX CREAMING CURVE - THE BUILDING BLOCKS

25000

27000

29000

31000

33000

35000

37000

39000

41000

4000 4500 5000 5500 6000 6500 7000

Tranche 1

Tranche 2

Tranche 3

New Dev. > $20 mln Shell Share

EB2

Tranche 3

Tranche 1

NPV $14

Cumulative Capex in 2001

DE-GSA4

EG-Obaiyed South

NI-Ughelli

BR-Champion West

UK-GoldeneyeMalampaya Oil rim

NI-LNG 4/5DE-Halfdan IITCGPSalym

SunrisePuffinBangestanNI-LNG 1-5

HolsteinNa Kika

Ehra NI-OgutaBR-East gas expDE-Dan infill

The promise

On merit NaKika, Holstein & Ehra do not rank

Tranche 2

Slide 27 of 37

26 June, 2000

“EXISTING ASSET” CATEGORY CAPEX 2001

EP-Global Capex on Existing Assets.rep

0

20

40

60

80

100

120

140

160U

SA

Nig

eria

(S

PD

C)

UK

Om

an

Ab

u D

hab

i

Net

her

lan

ds

Bru

nei

Au

stra

lia (

Dir

ect)

Syr

ia

Mal

aysi

a

No

rway

Eg

ypt

Ger

man

y

Den

mar

k

Gab

on

New

Zea

lan

d

US

$ m

ln M

OD

Country Name Capex 2001

Abu Dhabi 52

Australia (Direct) 27

Brunei 34

Denmark 7

Egypt 15

Gabon 7

Germany 13

Malaysia 17

Netherlands 47

New Zealand 2

Nigeria (SPDC) 152

Norway 15

Oman 81

Syria 23

UK 144

USA 160

Total 794

ie 800 mln - 18% of Devt Capex Budget……• Same level as 2000• no additional production generated• keeping brownfield plant operating & ready for new devts• Value adding or value erosion (vs 502Fs)

Slide 28 of 37

26 June, 2000

Oil Production by Country, CA-Category, Theme.rep

0

100

200

300

400

500

600

700

800

900

1.000U

SA

UK

Nig

eri

a

Om

an

Ne

the

rla

nd

s

Ma

lay

sia

Bru

ne

i

De

nm

ark

Om

an

(G

ISC

O)

Ab

u D

ha

bi

No

rwa

y

Au

str

alia

(D

ire

ct)

Ira

n

Ge

rma

ny

Ca

na

da

(A

OS

P)

Sy

ria

Ga

bo

n

Eg

yp

t

Arg

en

tin

a

Th

aila

nd

Ve

ne

zue

la

Oth

ers

2001

2002 2003 2004

2005

'000 boe/d OIL & GAS PRODUCTION 2001-2005 BY OURaw Data Submission

Production dominated by the big three in plan period

Without Nigeria growth,…- still only 2 OUs ~ 300+ Kboe/d S/S- 5 OUs ~ 200 - 300 kboe/d by 2005 - 3 OUs ~100 - 200 kboe/d by 2005- 10 OUs~ <100 kboe/d OUs by 2005

Nigeria Largest producer by 2005 with threefold growth!

Slide 29 of 37

26 June, 2000

Raw data quality is good, ……….but there is a large request will be a tough competition for funds……….Large number of attractive new devts & tranche funds

Large amount of funds for existing assets & Post FIDs ca $4 BlnTo maintain oil production requires ca $5 Bln, with 100 % delivery

Before we consider more capex funds…..there are some issues….

But new devt “promises” are different from Vol- 1 findings……….Most post FID projects have been under delivering production……….Most projects have aggressive schedules vs Vol-1 reality……….VAR programme will have to be accelerated to meet FID planned……….Last years E&A followup developments have largely not materialised

How do we avoid an “over promise & under delivery” cycle…?

A few Outcomes from the Raw Data…..….

Slide 30 of 37

26 June, 2000

KEY ISSUES

CURRENT PERFORMANCE •Production under-performance

• 1999: UK, Egypt, SPDC, Syria, Netherlands• 2000 LE: Oil : Essentially on target but SPDC,

Gas : Egypt, Argentina, Netherlands, US

• Major New Project Delivery• 1999 on-stream disappointments due mainly to project schedule delays• 2000 onwards (CA 2000) suggests production under-delivery (sub-surface & facilities)• Reserves Replacement• 2000 LE 24 % with major concerns throughout Plan Period

FUTURE PROMISES• Continued reliance upon Nigeria (and our ability to grow oil production there)• Need to avoid over promising and under delivering cycle. • Continued pursuit of major Capex spend outside of existing portfolio ..are regretting oil?

Slide 31 of 37

26 June, 2000EP-Global Committed Capex in 2001 by CA-Category.rep

1256

697

978

621669

199

547

66

297

101

279239

268

0

244

0

176

58

175175 156

31

149120

144

0

134

74120108 111

0

9393 87

0

8350 65

14570

540

512

490

450

42421800

200

400

600

800

1000

1200

1400

US

A

Nig

eri

a (

SP

DC

)

UK

Nig

eri

a (

SN

EP

CO

)

De

nm

ark

Ma

lay

sia

Ira

n

Om

an

No

rwa

y

Ru

ss

ia (

Sa

kh

alin

Ho

ldin

g)

Ne

the

rla

nd

s

Ru

ss

ia (

Re

st

of)

Bra

zil

Bru

ne

i

Eg

yp

t

Ph

ilip

pin

es

Ca

na

da

ST

EP

Sy

ria

Arg

en

tin

a

An

go

la

Ga

bo

n

Au

str

alia

(D

ire

ct)

Th

aila

nd

Ve

ne

zue

la

Ab

u D

ha

bi

Ce

ntr

al A

sia

CAPEX SPEND 2001 BY COUNTRY - Raw Data SubmissionU

S$

mln

MO

D

Total Capex request 2001 = $7.1 blnTotal Commitments = $ 2.7 bln

Top 5 countries requested 60% of total Capex

Next 10 countries requested 30% of total Capex

The tail = 10 %

Slide 32 of 37

26 June, 2000

RESERVES REPLACEMENT - RAW DATAProved Reserves Replacement Ratio

(BP-2000 raw data excl Canada & Woodside - SPDC to be updated)

0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

200%

1999 2000 2001 2002 2003 2004 2005

BP-1999adj

BP-2000

BP'00 Average 115%

BP'99 43%BP'99 adj 29%2000 LE 24%

101% Incl. AOSP56% excl. AOSP

BP'99 Average 101% --> adj 83% (SPDC & PDO)

Egypt DW, Gabon DW,

Angola, Central Asia, Russia, Argentina?, UK

OKIOC, USA, UK SNEPCO, Norway 17/18

OKIOC, Namibia, Norway 16/17

Malaysia, SPDC?, Norway 16/17, UK

A&D Data issueArgentina?Brutus

You need to believe that the “hopes” in Angolaand Brazil and new gas come off to replace reserves...

Woodside Effect

Slide 33 of 37

26 June, 2000

SFRcom Maturation to Expectation Reserves

0%

2%

4%

6%

8%

10%

12%

1999 2000 2001 2002 2003 2004 2005

BP-1999

CA-2000

LE

Actual

SFR MATURATION RATES - RAW DATA

Slide 34 of 37

26 June, 2000

Sab

le

Isla

nd

Slide 35 of 37

26 June, 2000

IBV raw data submission versus 1999

0

10000

20000

30000

40000

50000

60000

70000

80000

2000 2001 2002 2003 2004 2005

IBV

c M

ln U

S $

2000 Plan1999 Plan

- 5%- 1 %

1%

15%

21%23%

19991998

The promiseThe delivery

1999 & 2000 value creation is limited…….. • data assumes all planned 2000 FIDs are achieved ….unlikely based on LE• highly optimistic forward looking 2001 to 2005 (Nigeria assumed growth not likely…)• eg 2001 assumes we take roughly one big project FID per month (ranked in)….

Slide 36 of 37

26 June, 2000

EP-Global Committed Capex in 2001 by CA-Category.rep

3290

1057

1911

776

1095

459682

32293

0

500

1000

1500

2000

2500

3000

3500

EPN EPG EPM EPA EP

Total Capex MOD

Committed Capex (MOD)

US

$ m

ln M

OD

CAPEX REQUEST 2001 BY REGIONRaw data Submission

Total Capex request 2001 = $7.1 blnTotal Commitments = $2.7 bln

Slide 37 of 37

26 June, 2000

2664

566

1539

617

1530

762

974

615

371

520

500

1000

1500

2000

2500

3000

Oil Gas Nigeria Deepwater MRH

Total Capex MOD

Committed Capex (MOD)

EP-Global Committed Capex in 2001 by CA-Category.rep

US

$ m

ln M

OD

CAPEX REQUEST 2001 BY THEMERaw data Submission

Total Capex request 2001 = $7 blnTotal Commitments = $2.6 bln

Excluding: Woodside, Shell Canada

SNEPCO in Nigeria

Theme ($500 mln)

1552

Slide 38 of 37

26 June, 2000

Production per Region - Raw data.rep

2001 2002 2003 2004 20050

500

1000

1500

2000

'000

bo

e/d

'000

bb

ls/d

0

500

1000

1500

2000

2500

3000

3500

2000 2001 2002 2003 2004 2005

EPG

EPM

EPA

EPN

EPG

EPM

EPA

EPN

OIL & GAS PRODUCTION 2001-2005 BY REGIONRaw Data Submission

0

20

40

60

80

100

120

Mrd

Sm

3/yr

1999199819971996

19991996 1997 1998

GAS Gas grows 50 % - across the board

2000

OIL/NGLLiquids grow 50%- predominantly in Nigeria & Brazil

Slide 39 of 37

26 June, 2000

Production per Region - Raw data.rep

0

500

1000

1500

2000

2000 2001 2002 2003 2004 2005

Nigeria MRH Deepwater Gas Oil

GAS

'000 boe/d

'000 bbls/d

0

500

1000

1500

2000

2500

3000

3500

2000 2001 2002 2003 2004 2005

Nigeria MRH Deepwater Gas Oil

OIL/NGL

OIL & GAS PRODUCTION 2001-2005 BY THEMERaw Data Submission Nigeria accounts for

most of the growth in liquids

Bonga

Slide 40 of 37

26 June, 2000

KEY METRICS - RAW DATA

INCapex 2001 IBV $14/bbl Boe/d 2001 Boe/d 2002 Boe/d 2003

DW 570 5758 396 464 423NIGERIA 1252 5091 262 299 514OIL 1317 13946 1727 1699 1635GAS 2327 15233 1149 1158 1212MRH 38 -363 43 44 41TOTAL 5504 39665 3577 3664 3825

OPTIONCapex 2001 IBV $14/bbl Boe/d 2001 Boe/d 2002 Boe/d 2003

DW 319 867 0 6 39NIGERIA 258 1005 0 21 23OIL 543 2021 28 167 236GAS 172 2152 15 26 53MRH 83 943 0 0 1TOTAL 1375 6988 43 220 352

MRH now includes Venezuela hence no value at $14Deepwater excludes SNEPCORanked out production in 2001 43,000 bbls/dDoes not reflect OUs outside EP control - (SOGU)

Value continues to be dominated by traditional OUs………...Nigeria dominance of production growth not reflected in value

Incorrect…!

Needs to be updated yet…..

Slide 41 of 37

26 June, 2000

SUMMARY

• Growth in production is a major challenge• Existing oil assets decline 50% by 2005 1,700- 800 kb/d• New project schedules & project forecasts need realism• Growth story dominated by Nigeria• Still Big 3 and small 15

• Reserves replacement is a key issue• Brazil, Angola, CIS - new hope and OKIOC

Given the bullishness of submissions….Need to calibrate to ensure BP’2000 does not under deliver.

Slide 42 of 37

26 June, 2000

Backups

Slide 43 of 37

26 June, 2000

EP / GP Linked Projects (FID < 3 years)Capex

Ranking

2001 OptionCapex($ mill)

Malaysia MLNG Tiga Base 24 3 GPAustralia NWS LNG Train 4 Option 4 6 GP

ALNG Train 1 Option - 5 GPChina Ordos / Changbei Option - Expex (in) EP

Russia Piltun-Lunskoye Option - Expex (in) EPEgypt NEMed SMDS Option - Expex (in) EPIran Iran SMDS Option 2 6 BothTurkmenistan T2T Pipeline to Turkey Option 18 3 EPSaudi Arabia Saudi Maturation Project Option - - EP

Nigeria NLNG 3 Base 501 misc EPNLNG 4 Option 45 misc EPWest Africa Gas Pipeline Base 6 3 EPAbuja Gas Pipeline Base 2 3 EP

Venezuela VLNG Option 7 6 GPNamibia Kudu Base - - EP

TOTAL (Base) 533TOTAL (Options) 76

45%

65%

CapexMatrixPos.

EP/GPLead

Current Capex Ranking Cut-Off is Box 3 @ 50%

Slide 44 of 37

26 June, 2000

EP/GP Integrated Economics

EP Ranking Integrated Ranking (incl NPV)Box Attractiveness Box Attractiveness

Australia NWS Train 4 6 41% 3 54%ALNG Train 1 5 55% 5 48%

Iran Iran SMDS 6 21% 6 41%

Turkmenistan T2T Pipeline to Turkey 3 54% 3 48%

Venezuela Venezuela LNG 6 34% 3 54%

Slide 45 of 37

26 June, 2000

KEY ISSUES - EP / GP Linked Projects

Malaysia MLNG TigaAustralia NWS LNG Train 4

ALNG Train 1ALNG Train 2NAGV Domgas & FLNG Gorgon SMDS

China Ordos / ChangbeiKuqa

Russia Sakhalin (Piltun-Lunskoye)Egypt NEMED SMDSIran Iran SMDSTurkmenistan T2T Pipeline to TurkeySaudi Arabia Saudi Gas Project

Nigeria NLNG 3NLNG 4West Africa Gas Pipeline

Venezuela VLNGNamibia Kudu

Country Project Name Upstream Capex

7….

….

…. ….….

….

….

….….

….

….….

….…. ….…. ….

Slide 46 of 37

26 June, 2000

7th June : Exploration Proto-Forum Discussion on expex ranking

26th JUNE - Position in CA 2000 Sequence

13th June : Expex/Capex Data Pack (early rankings/views) to RBAs for Consideration

19th June : Some Regions Holding RBAs & OUs Meeting (Improve data quality & identify implications of expex & capex ranking)

22-23th June : EXPEX Workshop 26th June : EXCOM Raw Data and Issues 27-28th June : CAPEX Workshop

(EP / SIG Alignment Meetings take place as required per region)

10th July : EXCOM Presentation on Expex, Devt Capex & with Early Financials

31st July : EXCOM Presentation on Final Expex & Capex

14th July : OU Investment level letters (Expex, Capex, etc)

11th Aug : OU Investment Confirmation (as per 2001 Scorecard Outlines)

Slide 47 of 37

26 June, 2000

Country Summary report Regional view .rep

0

500

1000

1500

2000

2500

3000

3500

2000 2001 2002 2003 2004 20050

1000

2000

2000 2001 2002 2003 2004 2005

Production Forecast per Region and CA Cat - Raw data.rep

KEY ISSUES - Decline of “Existing Asset” base

Capex mln ($ MOD)

Decline to by half in the plan period……and cost $0.8 bln/yr to maintain

Production (kbbl/d)

Existing Assets Existing Assets

Slide 48 of 37

26 June, 2000

Country Summary report Regional view .rep

0

500

1000

1500

2000

2500

3000

3500

4000

2000 2001 2002 2003 2004 20050

1000

2000

3000

4000

5000

2000 2001 2002 2003 2004 2005

Production Forecast per Region and CA Cat - Raw data.rep

KEY ISSUES - Arresting the decline with post FID projects

Post FID projects do not arrest the decline……but cost a further $1.4 bln/yr …...

Capex mln ($ MOD)Production (kbbl/d)

Existing Assets Existing Assets

Post FID projects

Post FID projects

Slide 49 of 37

26 June, 2000

Country Summary report Regional view .rep

0

500

1000

1500

2000

2500

3000

3500

4000

2000 2001 2002 2003 2004 20050

1000

2000

3000

4000

5000

6000

2000 2001 2002 2003 2004 2005

KEY ISSUES - Arresting the declineAdding tranche activity……cost a $0.8 bln/yr but does not halt the decline

Maintaining current production levels costs $5.1 bln in 2001 and av. of $3.0 bln over plan period

Existing Assets Existing Assets

Post FID projects

Post FID projects

TranchesTranches

Slide 50 of 37

26 June, 2000

Country Summary report Regional view .rep

0

1000

2000

3000

4000

5000

6000

2000 2001 2002 2003 2004 20050

1000

2000

3000

4000

5000

6000

7000

8000

9000

2000 2001 2002 2003 2004 2005

KEY ISSUES Arresting the decline - the new promises

Existing Assets Existing Assets

Post FID projects

Post FID projects

Tranches

Tranches

New development

New development

E&A follow up

E&A follow up

Production (kboe/d) Devt Capex ($ mln)

OU Ceilings

Slide 51 of 37

26 June, 2000Country Summary report Regional view.rep

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

2000 2001 2002 2003 2004 2005

KEY ISSUES - Allowing further Funds for Existing OUs.

Existing Assets

Post FID projects

Tranches

Devt Capex ($ mln)

OU Ceilings

New development

E&A follow up

Short Term Oil projectsand new devts in existing OUs.

2001 2002 2003 2004 2005

Oil Contribution

0

10

20

30

40

50

UTC = …..VIR avg = …..Time to prodn = …..

Slide 52 of 37

26 June, 2000

BIG TICKET ITEMS…Planned to take FID by end 2002/early 2003

Sakhalin deal & Gas devt I 150+

Possible People Resources ReqdCapex Requirements $ mln (till 2005)

Saudi Gas development 100+

Zapolynaroye 50+

South Pars 25+

Brazil 25+

Angola 25+

Egypt 25+

Bangestan 25+

China deals 25+(?)

Venezuela LNG (?)

MRH Entry Others …. 25+

Nigeria

Global DWBusiness Staffed up

25+

Possibly 500+ Staff required ……..

Sakhalin 40 % Gas devt I

Saudi Gas development

Zapolynaroye

South Pars

Bangestan

China deals

Venezuela LNG

MRH Others (Kuwait, Lybia )

Brazil - BC-10+

Angola - Blk -18

Egypt - NEMED (no dilute)

Nigeria -Ehra

MRH & CIS Business

1500

2400

550

370

670

1400

2000

740

600

7

600

900

Possibly requiring $11,000+ mln in plan period.

Slide 53 of 37

26 June, 2000

Shell Expro - Existing Assets capex

Existing Assets Capex $ mln MOD 2001 2002 2003 2004 2005

Brent Gas commitments 30 21 11 1

Gas Contract commitments 5 0 3 3

HSE & legal obligations 5 6 6 2

Minority shareholder obligations 2 1 1 1 0

Prime Scope Schiehallion 2 15

Infrastructure integrity 12 10 5 5 5

Production seismic & subsurface modelling 2 0 4 0

Economic improvement 11 3 4 2 2

Minor modifications 9 8 8 6 6

Capital overheads 5 3 3 3 3

Subject to portfolio management 61 3 2 2 1

Grand Total 144 70 42 28 17

Slide 54 of 37

26 June, 2000

BSP Capex Corporate & Existing Assets

Corporate AssetsPlan Common

2001 2002 2003 2004 2005 Period YearsIGPDS BP2001 4.6 4.0 0.6 0.1 1.4 10.8 9.4

Tariffed resources BP2001 5.9 5.5 4.4 3.7 1.4 20.8 19.5

Corporate services BP2001 0.5 0.1 0.0 0.0 0.0 0.6 0.6

Refinery BP2001 0.2 0.3 0.0 0.0 0.0 0.5 0.5

Product flow Existing assetsPlan Common

2001 2002 2003 2004 2005 Period YearsSRU LAND BP2001 2.3 1.9 0.8 0.7 0.9 6.6 5.7

SRU EAST BP2001 3.4 4.5 2.8 0.9 0.9 12.6 11.7

SRU WEST BP2001 3.5 3.7 2.2 0.3 0.1 9.8 9.7

Mln US$ Shell Share, MODBP2001

Mln US$ Shell Share, MODBP2001

Slide 55 of 37

26 June, 2000

SRU Tariff Resources

Category Description 2001

Mln US$, SS

IT/Data Mgmt. DM H/W PURCHASE 0.10

IT/Data Mgmt. CORTRAN2 IMPLEMENTATION 0.26

IT/Data Mgmt. AIMS FACILITIES DATABASE PHASE 1 0.24

IT/Data Mgmt. FIC CENTRAL SERVICES 0.06

IT/Data Mgmt. EP Business Systems Strategy implementation 0.59

IT/Data Mgmt. DESKTOP SERVICE 0.07

IT/Data Mgmt. EPIDORIS II REPLACEMENT 0.03

IT/Data Mgmt. DMR FREQUENCY CHANGE 0.75

IT/Data Mgmt. TELECOM MISC PROJECTS 0.15

IT/Data Mgmt. DATACOMMS NETWORK 0.21

IT/Data Mgmt. LOGOS MIGRATION TO POWERBUILDER 0.08

IT/Data Mgmt. DM HARDWARE PURCHASE PHASE 2 0.07

2.60

The budget covers the application's (logistics planning/scheduling) migration to software that is supported( I.e. internally within the organisation or externally), existing software is obsolete and no longer supported.

Part of budget for annual upgrades to keep the DM Unix computing infrastructure fit for purpose; essential for continuation of subsurface modelling,data management and alignment with OM/XM systems.

Ongoing IT system replacement.

Driven by international telecommunication rules as enforced by ITU/JTB (Brunei telecom departments).

Project necessary to ensure continuity, reliability, availability and expension of Radio, Telephony communication Networks and infrastructure.

Project necessary to ensure continuity, reliability, availability and expension of Datacommunication & Telemetry Networks (LAN & WAN).

Project to develop database to capture integrity of assets/facilities. Provision in 2001 for populating the database using in-house resources.

Replacement of servers/equipment to maintain IT Infrastructure service.

Budget (project total US$ SS 8.8 mln) required to replace BSP's legacy of Group Common systems with an integrated solution based on the EP Blueprint. Most will be obsolete 2002/3 and Group/Vendor support will soon cease to exist, .

BSP have 20 servers to provide desktop services. These are planned to be replaced at the rate of five per year. The replacement of these servers is required to ensure that the quality of the service does not deteriorate.

Part of budget for annual upgrades to keep the DM Unix computing infrastructure fit for purpose; essential for continuation of subsurface modelling,data management and alignment with OM/XM systems.

Contract committed (40% VOWD in 2000) to replace/upgrade current application. Budget of 0.26 mln US$ SS in 2001 is required to complete the project.

Justification

CA Category : Corporate

Slide 56 of 37

26 June, 2000

Category Description 2001

Mln US$, SS

HSE Magpie Vent to Flare Conversions 0.12

HSE CP Natural Flow Implementation phase 2 0.59

HSE/ Production CP Natural Flow Implementation phase 1 0.74

Integrity Field Request Plant Change (FRPC) 0.26

Integrity Sand Detection 0.15

Integrity CPFB-7 Flare Upgrade 0.29

Integrity CP7 Fire Water System 0.29

Integrity / Production

CP-7 Elect Systems Rationalisation 0.38

Integrity / Production

Remote Outstations, Power and Communication 0.15

Integrity/HSE PIMS East 2000 -2002 0.36

Other Concept Design East 2000-2003 0.03

Production Well Test Metering Upgrade 0.07

3.4

Changeout of existing RTU's which are obsolete and not maintainable. Required for reservoir management and production optimisation

To allow intelligent pigging on critical pipeline.

In-house manpower and consultant related cost for conceptual design study.

Enable testing of East wells for reservoir management and system optimisation

Upgrade on the CP-7 Flare required as a result of the recent incident on CP 7

Upgrades and study work on CP-7 Fire water system which has leaks and blockages and may need pump replacements.

Modifications on CP-7 electrical systems - integrity and deferment related

To meet Group venting target

To meet Group venting target and oil production targets

Minor operational projects to eliminate shutdown and improve facility operability.

To prevent sand erosion failures and optimize production capacity.

SRU East CA Category : Existing Assets

Justification

To meet Group venting target

Slide 57 of 37

26 June, 2000

PRODUCTION PERFORMANCE FROM NEW PROJECTS IS DISAPPOINTING……...

POST FID ObaiyedCAPEX

0

10

20

30

40

50

60

70

2000 2001 2002 2003 2004 2005

mln

$ M

OD

1999

2000

OIL

0

2

4

6

8

10

12

14

16

18

20

2000 2001 2002 2003 2004 2005

Pro

du

ctio

n (

x'00

0 b

bls

/d)

1999

2000

Gas

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

2000 2001 2002 2003 2004 2005

mrd

Sm

3/y

r

19992000

VALLE MORADO

CAPEX - VALLE MORADO

0

5

10

15

20

25

30

2000 2001 2002 2003 2004 2005

Cap

ex (

mln

$ M

OD

)

1999

2000

OIL - VALLE MORADO

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

2000 2001 2002 2003 2004 2005

'00

0 b

bls

/d

1999

2000

GAS - VALLE MORADO

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

200020012002200320042005

mrd

Sm

3/y

r

1999

2000

Argentina

Egypt (…Rosetta same)

First slippage…then less hydrocarbonsforecast

+ 15 well InfillCampaign

Slide 58 of 37

26 June, 2000

PRODUCTION PERFORMANCE FROM NEW PROJECTS IS DISAPPOINTING……...

Brigantine Development

Brigantine Development

0

10

20

30

40

50

60

2001 2003 2005

mln

$ M

OD

1999 Capex

2000 Capex

Brigantine Development

0

0.2

0.4

0.6

0.8

1

1.2

2000 2001 2002 2003 2004 2005

'00

0 b

bls

/d

1999 Oil

2000 Oil

Brigantine Development

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

2000 2002 2004

mrd

Sm

3/y

r

1999 Gas

2000 Gas

42 FORCADOS YOKRI - NLNG 342 FORCADOS YOKRI - NLNG 3

0

20

40

60

80

100

120

2000 2001 2002 2003 2004 2005

mln

$ M

OD

1999 Capex

2000 Capex

42 FORCADOS YOKRI - NLNG 3

0

10

20

30

40

50

60

70

2000 2001 2002 2003 2004 2005

'00

0 b

bls

/d

1999 Oil

2000 Oil

42 FORCADOS YOKRI - NLNG 3

0

0.02

0.04

0.06

0.08

0.1

0.12

0.14

0.16

0.18

0.2

2000 2001 2002 2003 2004 2005m

rd S

m3

/yr

1999 Gas

2000 Gas

UK

Nigeria

Slide 59 of 37

26 June, 2000

MAJOR Post-FID PROJECTS ….CAPEX

Brutus - indications of capex rephasing… Onstream date unchanged

Bonga - indications of capex increase…… indications of slippage…… Onstream date unchanged

Shearwater - capex will be under budget & on time….

Brutus Capex

0

50

100

150

200

250

300

350

1998 2000 2002 2004

Time (Years)

Dev

t C

ap

ex (

$ m

ln)

CA 1999CA 2000

Costs are expected to be lower...

Bonga Devt Capex

050

100150200250300350400450

2000 2002 2004 2006Time (Years)

Dev

t C

apex

($

mln

)

CA 1999CA 2000

- Increased drilling costs

- Increased project mgmt costs

AOSP - indications that capex 2001 is larger than planned due to slippage in schedule……..

Nowrooz/Sarooz - 2001 & 2002 capex slippage…… Onstream date unchanged

POST-FID 2000 - Underspend Likely 2001 - $400 mln additional

Slide 60 of 37

26 June, 2000

MAJOR Post-FID PROJECTS IN PROGRESS….PRODUCTIONBrutus - Peak production in 2002 & 2003 is now lower Not a barrel produced yet….. (Is this a meaningful signal …)

Bonga - Peak production in 2003 & 2004 is lower (system remodelling, revised subsea layouts & well timings)

Shearwater - Production unchanged , capex will be reduced vs budgets.

Brutus Oil Production

0102030405060708090100

2000 2001 2002 2003 2004 2005 2006Time (Years)

Oil

Pro

du

ctn

(kb

bl/

d)

CA 1999CA 2000

lower peak oil production but higher cum productionby ca 40 mln bbl by 2016

Bonga Oil Production

40

50

60

70

80

90

100

110

120

2002 2003 2004 2005 2006Time (Years)

Pro

du

ctio

n (

kbb

l/d

)

CA 1999

CA 2000

5 - 7 % decline following further studies.

- revised subsea layouts &

well timings

POST-FID Production is lower across the board Cannot find examples of increases…..

Slide 61 of 37

26 June, 2000

“Big Ticket” Items Additional Capex vs BP ‘99D

ev

t C

ape

x (

$ m

ln)

Original FID TimingsRevised FID Timings

0

500

1000

1500

2000

2500

3000

3500

2001 2002 2003 2004 2005

6062 5371 4962 4945 BP ‘99 CAPEX

Slide 62 of 37

26 June, 2000

Oil Production Difference Major Post FID Projects

1999 vs 2000 CA Raw Data Submission

-21% -12% -27%

+33%

+66%

+6%

-100

-50

0

50

100

150

200

250

300

2000 2001 2002 2003 2004 2005

Years

Mb

op

d

OIL mbopd

CA 1999 CA 2000 Difference %2000 58 46 -12 -21%2001 132 116 -16 -12%2002 317 231 -86 -27%2003 430 456 26 6%2004 484 646 162 33%2005 432 715 283 66%