AGM Statement

BP Amoco PLC
19 April 2001


April 19, 2001                                                      20/01

 ADDRESS TO SHAREHOLDERS AT THE ANNUAL GENERAL MEETING OF BP AMOCO P.L.C. ON
                         THURSDAY, APRIL 19, 2001 BY

     PETER SUTHERLAND, SC, CHAIRMAN AND SIR JOHN BROWNE, CHIEF EXECUTIVE



Introduction by Peter Sutherland



Good morning, ladies and gentlemen.  Thank you all for coming to this Annual
General Meeting. The board and I appreciate your interest and investment in BP
Amoco.



Seated on the stage with me in the front row on my left are Sir John Browne,
Group Chief Executive and an executive director; John Buchanan, Chief
Financial Officer and an executive director; and Patrick Wright, Chairman of
the Remuneration Committee.



To my right in the front row are Judith Hanratty, Company Secretary; Walter
Massey, Chairman of the Ethics and Environment Assurance Committee; and Ian
Prosser, Deputy Chairman and Chairman of the Audit Committee.



Also with us on stage today are the other members of the Board.  Unfortunately
Ruth Block is unable to be with us and sends her apologies to you.



We will now turn to the main business of our meeting. Today we have the
opportunity to review the activities undertaken by the company to benefit you,
the shareholders.  Much has been achieved since we last met and we are
well-positioned for the future.



Our agenda today is again rather long. The order of business will be that I
will begin with a few remarks about the company's progress and prospects.
Then we will consider, discuss and call the poll on each of the resolutions in
the order set out in the Notice.



Sir John Browne will speak to Resolution 16 on the company's year 2000
performance, our performance during the first quarter of 2001 and the
company's future prospects.   All resolutions will be decided by poll at the
end of the meeting, after we have had a chance to discuss all of the items of
business before us.



Before we begin to consider the resolutions individually, I should like to
make a few general observations on BP's performance over the past year, and
upon some of the matters we are discussing this morning.



It seems strange to recall, but believe it or not there was a time - not so
long ago - when the Annual General Meeting of BP was held in our London
offices in Moor Lane.  All of us were then able to fit into the staff coffee
lounge.



But even in as large a hall as this, we would be embarrassed if anything more
than a small percentage of our shareholders were to turn up for the meeting.
And I think we owe it to all those who are unable to be here today to bear
this in mind.



For, as I said in our Annual Report, we now have at least as many shareholders
outside the United Kingdom as within it.  We now have approximately one
million investors worldwide holding over 22 billion shares.  And while I am
sure we are all united in wanting the best for our company, those of us here
with the opportunity to speak cannot automatically assume that we reflect
identically the views of those who are absent.



In this hall today, most will inevitably view the issues which BP faces from a
UK perspective.  And of course it's true that the United Kingdom has a special
significance because this is where our global headquarters are located and
this is the country in which BP is domiciled.  But so far as this particular
meeting is concerned, we must not allow the fact that we are meeting in London
to divert us from the global spread of our activities and responsibilities.



That of course is one reason why it is right to inform you of the way in which
the votes of those who cannot be with us have been cast on each resolution.
It is not to detract from our own deliberations; but it is to place them in a
total BP context.



Our business interests are now wider and more substantial than ever before in
our history.  To BP's original size and scope have now been added the assets
and skills of Amoco, ARCO, Vastar and Burmah Castrol.  We are one of the
world's truly international companies.



We welcome the challenges and responsibilities which this brings.



We should never lose sight of the reality that our first and overriding
responsibility is to remain a successful and profitable company, capable of
recruiting the most able people, and fighting off the most formidable
competition.



When Sir John addresses you, he will demonstrate how we are fulfilling this
responsibility.  He will be able to point to record results and a dividend
level which is now 52 per cent above its 1995 level.



Your Board oversees the general rules which govern this commercial performance
and ensures in particular that this is achieved in a way which is fully
consistent with our overall policies and standards.



The growing complexity of the decisions which we face means that the answers
and choices will not always be as straightforward as some would have us
believe. And our focus must always be on the long-term results we are building
as well as this quarter's results. In our industry, planning and investment
are long-term undertakings. The development of a field in the Gulf of Mexico,
for example, takes several years from initial exploration to delivery of first
oil or gas.



We should not be surprised that BP's new scope, size and importance attract
more attention than they used to. This is beneficial in many commercial
settings. BP's size and reach certainly enable us to deliver increased value
for you both now and in the long-term and to bring new opportunity and
prosperity to the communities where we do business, to those we would not
otherwise touch. We do recognise our duty to carry on our business in ways
which maximise the advantages to society and to minimise the disadvantages.



We are rightly proud of our business, our contributions to society, and of the
people who work for BP.  The best assurance for our future lies with the
integrity and quality of our staff.  Like you, they are individuals with
families, community ties, and personal standards of integrity and excellence.
They are the custodians of BP's reputation, and they demand that BP be a
company they are proud to work for.  BP must therefore be attractive to the
most able and committed people.



On your behalf, I pay credit now to all our staff for last year's superb
performance.  These achievements were gained in tough global markets where
volatility and challenge are a way of life. Their successes enabled our share
price since merger to out-perform both the 'Footsie' and Standard & Poor's
500.



With these thoughts in mind, let us turn to the specific resolutions.  Thank
you.





Remarks by Sir John Browne



Ladies and Gentlemen, good morning.  It's particularly good to see so many old
friends in the audience - including so many current and former employees of
the company.  We very much appreciate your continued support.



This morning I'd like to give you a progress report on how we've been doing,
and our plans for the future.



2000 was an excellent year for BP.



The results we delivered weren't just the consequence of strong oil and gas
prices.  Much more important was the underlying improvement in the
productivity of the company - the way we work.



That is what has enabled us to make progress, and to deliver against the
strategy which has been established for several years now.  That strategy very
simply is to focus our activities in line with the changing patterns of energy
demand.  To focus on low cost resources and high growth markets.  To develop a
portfolio of exceptional activities.  To concentrate on returns as the key
measure of performance and to work within a very disciplined financial
framework at all times.



That strategy remains in place, and we believe that the factors which have
helped us deliver excellent results so far will continue to help us as we move
into a new phase in our development.  A phase of growth in both activity and
profitability.



The last three years have been a period of great change for BP.  Over those
three years we have led the process of reorganisation and consolidation which
has reshaped the private side of the international oil and gas industry.



It began with our joint venture with Mobil in Europe.  Then came the merger
with Amoco announced in August 1998;  the acquisition of Arco in April 1999
and the takeover of Burmah Castrol in the spring of last year.  And there have
been a number of other smaller steps as well.



The actions we took were followed by others - including the acquisition of
Mobil by Exxon and the takeovers of Fina and Elf by Total.



The logic behind that restructuring was the economies of scale - physical,
financial and intellectual economies of scale which were achievable in the
private sector of the industry.  I stress that because of course 80 per cent
of the world's oil and gas industry is still operated by state controlled
companies.



It has turned out that our mergers and acquisitions were very well timed.
There's always a great advantage in being the first to move, and we've also
benefited from the fact that we completed our transactions in a period when
oil and gas prices were relatively low - around 50 per cent below today price
levels.



That series of transactions gave us a number of things.  They gave a great
spread of top quality strategic resources.  BP's traditional strength in the
North Sea and Alaska plus resources in Trinidad, in the continental United
States, in Egypt, in other parts of Africa and in the Far East.  A total
resource base at the end of last year of 23 billion barrels of oil and 100
trillion cubic feet of gas.



The transactions also gave us a great set of market positions.  In Europe, in
the United States - where we are the leading retailer in some of the most
dynamic areas of the American economy - and in the Far East, which is the most
rapidly growing market in the world.  And great market positions in Chemicals
where in nine of the key product markets in which we operate we are number one
or number two in the world.



The transactions also gave us a new balance in our business.  A new geographic
balance and a new balance in terms of the fuel mix - with a much greater
emphasis on natural gas.  Five years ago BP was a minor player in the world
gas industry.  Natural gas accounted for just 18 per cent of our daily
production.



Now we're the largest gas producer not just here in the UK, but also in the
US.  Natural gas now accounts for more than 40 per cent of our daily
production and the figure is rising.  And that's a great shift to have made
because gas is the fuel of choice for an increasing number of consumers.



It is clear on the basis of current trends that within the next 10 to 15 years
the world will get more of its energy from natural gas than from oil.  We're
now in a great position to capture a disproportionate share of that growth.



They gave us a set of world-class brands.  Castrol, Arco, Amoco, and BP
itself.  All exceptionally well positioned in specific markets and backed by a
long track record of success.  A set of world class brands to which we now add
a corporate brand - the BP brand covering everything we do - a brand which
reflects our aspiration to be the leader.



The belief that we can make good things better - through the use of our skills
and technology, through innovation and human ingenuity and through a constant
search for ways of transcending harsh trade offs.  The belief that we can and
will find ways of delivering the energy the world needs at affordable prices
and without doing damage to the environment.



Those brand values are very important to us, because they are the drivers of
performance and shareholder value.



When we launched the brand we used the phrase beyond petroleum.  Some people
thought that meant we were giving up oil and gas.  I'm sorry to disappoint our
competitors.  Beyond Petroleum means that what we're giving up is the old mind
set - the old thinking which assumed that oil companies had to be dirty and
secretive and arrogant.  I don't believe we should be any of these things.



So the transactions transformed the company.  But, of course, business is not
a static process.  Putting the companies together was not an end in itself.
It was part of a dynamic process of change and development which didn't end
when the transactions closed.  In fact concluding the transactions was just
the beginning.



First we had to capture the economies of scale I mentioned a moment ago.  That
started with a reduction in the cost structure of the combined companies of 20
per cent - a reduction which is enduring and which puts us in a completely
different competitive position.  We can now say with great confidence that
we'll meet all the targets for cost savings which we set by the end of this
year.



As we brought together the assets of the different companies we also found
that some didn't fit our strategic logic and we're working through a programme
of disposals which will produce a total of over $10 billion of proceeds.



But reducing costs and managing the portfolio of activities are not the only
economies of scale which come when you put together a series of excellent
companies.  You also have the chance to create a new team.  To bring together
the brightest and the best, to share skills and experience and to use a
combination of strengths to do things which none of the companies could have
done on their own.



I see that as I visit our activities around the world.  The refinery at
Rotterdam;  our deep water operations based in Houston;  our retail business
in Europe;  the natural gas developments which are underway in Trinidad and,
of course, here at home our oil and gas fields in the North Sea.



In every case we now have teams which bring together the skills gathered by
individuals who've worked in different companies in the past.  The combination
of those skills into a new team is a fascinating process to be involved in -
and it is producing great results - results which none of the companies could
have achieved on their own.



Just to give you a couple of examples:



In clean fuels we now have a leadership position - the ability to produce and
market products of the highest quality in dozens of cities around the world -
with the programme reaching new markets month by month.



In exploration we have a leadership position on the cost of finding,
developing and producing oil and gas.  That is a great strength when prices
can be volatile.



And in chemicals we have leadership positions in technology and in matching
what we produce to the available feedstocks and to the needs of our customers.
That's a great strength in a cyclical business.



We couldn't have achieved all that if we hadn't combined the strengths of the
different companies which now form BP.



And if you put all that together - strength in resources and markets and
brands;  financial strength based on a disciplined framework;  technology;
100,000 great people; and a track record of proven success in delivering on
promises - then you have the ingredients for growth.



That is the next phase in our development as a company.



We're completing a period in which we made progress through acquisitions and
through the rigorous control of costs.  And we're entering a period in which
we will make further progress through organic growth.



That means increasing volumes in every area of activity combined, so long as
we can preserve or enhance margins.  Growing oil and gas production and
growing sales - in almost every part of the business.



Growth that matches the needs of the markets in which we're operating and
which is based on resources that are already identified - from the deep water
of the Gulf of Mexico and Angola, from Trinidad and Indonesia and Egypt as
well as from the North Sea and Alaska, where new technology and rigorous cost
control are allowing us to produce more than appeared possible only five or
ten years ago.



Growth, to repeat, which is based not just on increasing volumes - but on the
combination of margins and volumes.  So growth in performance and
profitability built on increasing levels of activity and continued rigorous
control of costs.



Of course, the growth we've already experienced has made BP more visible than
ever before.  We've become a global company at a time when what is loosely
called globalisation is changing many relationships and creating a public
debate on the roles and responsibilities of major companies.  That is
inevitable, and indeed we should welcome that debate.



We may not have as much power as some people think, but we clearly do have
some power because within the financial and commercial discipline of the
market we can make decisions on where and how to invest and which activities
to pursue.



We should welcome the debate because I believe we can be proud of what we do
and the way we do it.  We engage with all the communities in which we work.
We try to make a constructive contribution and we work with others - including
Governments, local people and NGOs - to deliver progress.  If people doubt
that, they should ask some of the people we work with - Oxfam, Save the
Children, the Red Cross, Conservation International and so on.



Of course, to be realistic we make mistakes - after all we're only human
beings - but I hope we learn from the mistakes and I do believe that in all
the areas in which we work, including some very difficult and sensitive areas,
our track record can stand up to the toughest scrutiny.



Our job is to provide products and services which people need.  Every
individual needs energy.  Energy is fundamental to human activity and
development.  There are now 6 billion people who need energy.  And we believe
we can help to provide that energy at a reasonable cost and in ways which do
not inflict lasting damage to people or the environment.



And that isn't just a matter of words.  It's a matter of fact.  The fact that
in line with our targets we reduced our emissions of carbon dioxide by five
per cent by the end of last year, and that we can now see with some confidence
that we'll be able to reduce them by another five per cent by the end of 2003.



The fact that over a period of seven years from 1999 we'll spend $1 billion on
developing clean fuels - petrol and diesel without lead or sulphur or benzene
- and the fact that, as a result, by 2005 clean fuels will account for more
than 40 per cent of all our sales, with that figure increasing all the time.



The fact that we are setting new standards of stewardship as we manage land
and water.  Every day, for instance, as well as producing 3 million barrels of
oil and gas we produce some 4.5 million barrels of water as part of our
operations.  We reinject half that water and we discharge the rest.  Water is
a precious commodity in many areas of the world; we use it with great care.
We have a long track record of improving the quality of the water we discharge
and over the last three years we've reduced the amount of oil in that water by
40 per cent.



So we're working to improve air and water quality ... but that's only part of
the story.



As well as helping the world change its fuel mix in favour of natural gas,
we're already looking ahead and preparing for the next shift - developing the
technology of solar power and hydrogen.  The shift will take a very long time.
Neither solar or hydrogen fuel cells are yet commercially viable.  But we're
making long term commercial investments in those technologies now, in the
belief that over time new sources of energy will make a significant
contribution to the world's energy needs.  That is investment for the medium
and long-term future.



For the moment the world needs increasing volumes of oil and gas, and the
challenge is to provide that energy in ways which do no damage.  We accept
that challenge.  That is what our customers want and if we can continue to
deliver what they want the prospects for the business are excellent.



We are a growing company in a growing market.  A company based on financial
discipline and a commitment to maximising the efficiency of every investment
we make.  A company which believes that by taking on the challenges and
offering our customers new choices we give ourselves the opportunity to win a
great commercial prize.



Thanks to the efforts of the 100,000 people who work for BP around the world,
last year was a very good year for us - but I still believe, as always, that
the best is yet to come.





Further information:  BP Press Office - 020 7496 4624/4324/4358/4851



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