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Tony Fountain, President, BP North American Gas and Power
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Tony Fountain, President, BP North American Gas and Power

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    • 1. Tony Fountain, President, BP North American Gas and Power
    • 2. NA – the world’s largest market - strong projected growth Source:EIA 2000 Consumption 0 5 10 15 20 25 30 US+Canada Brazil China India TCF/yr 2000-2010 Growth US+Canada Brazil China India 0 1 2 3 4 5 6 TCF /yr
    • 3. Market is opportunity-rich for well positioned players
      • Large and growing market
        • 1999 sales - $340bn
      • Liberalizing
        • - Progressing by state
      • Pressure for green/clean energy solutions
      Source:Mckinsey Size of Open Markets and Use ($ Billions p.a.) 220 145 50 66 80 95 54 140 235 0 50 100 150 200 250 300 350 400 1999 2002 2005 Open Competition Closed Gas Power Current/Projected
    • 4. BP’s strong focus on NA natural gas Source: Annual Reports. * Includes ARCO and Vastar 1999 Gas Production BP* Major competitors Other 42% NA 58% Other avg 67% NA avg 33%
    • 5. Power generation is driving projected demand growth
      • All sectors growing, but power is the driver
        • - Gas turbine orders underpin power growth
      0 5 10 15 20 25 30 1997 2000 2003 2006 2009 2012 2015 2018 Bcf/d EIA Demand U.S.Forecast Power Industrial Residential Commercial
    • 6. Total North America Resource TCF Years of Supply Source:BP/Industry estimates Gas Price 0 2500 $1.00 $5.00 0 50 Advanced Technology Current Technology
    • 7. Industry responding to increase near term production Source: EIA 12 Month Averages 250 300 350 400 450 500 550 600 650 700 750 800 Jan-89 Jan-90 Jan-91 Jan-92 Jan-93 Jan-94 Jan-95 Jan-96 Jan-97 Jan-98 Jan-99 Jan-00 Active Gas Rigs - U.S. 46 47 48 49 50 51 52 53 U.S. Production (bcf/d) Rigs Production Production Gas Rigs Current Drilling > 800
    • 8. Market projected price response to industry actions Source: Prophet 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50 5.00 5.50 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Henry Hub Natural Gas Prices $
    • 9. BP is part of the supply solution LNG DW GOM Alaska/Mackenzie Onshore
    • 10. Dynamic changes in competitive landscape ? Noram SCE Sithe Com Energy Phillips JV UPR PG&E Pan- Energy Mobil Trident Chevron Destec Illinova Calpine SkyGen Panda CGCA Vintage EL PASO PacifiCorp Tenneco DeepTech Sonat Coastal PG&E PGE Integrated Energy Traders
    • 11. Providing the right offer at right time
      • Advantaged supply position
      • Extending the model. . .
        • - World class trading skills
        • - Risk management expertise
        • - C & I market leader
        • - Green leadership
      • LNG capability
      • Leading NGLs position
      • Power market
        • - Trading
        • - Leveraging natural gas length into advantaged power
        • - Build power base with advantaged sites
    • 12. Opportunities in advantaged power Carlson Cherry Point Texas City Chocolate Bayou Decatur Joliet Wood River Paulsboro Baltimore Cleveland
    • 13. BP Gas & Power’s differentiated position Integrated Energy Trader World Class Trading Skills Risk Management Expertise NGL Leadership Advantaged Generation Sites Progas IGI WGL, BGE Green Mountain Cove Pt. Lake Charles Distinctiveness Supply Position Projected Doubling of Sales Volumes & Net Income in 2000 Decatur
    • 14. In summary. . .
      • Largest growth market in world
      • Rapidly changing competitive environment
      • BP creating distinctive leadership position
      • Right offer at the right time
      • Sustained diversified leadership supply position

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