Chief Executive's Presentation

BP Amoco PLC
15 February 2000


REMARKS BY BP AMOCO CHIEF EXECUTIVE SIR JOHN
BROWNE TO FINANCIAL ANALYSTS, FEBRUARY 15, 2000

 The following is a summary of a presentation made to financial analysts in
 London today by Sir John Browne, chief executive of BP Amoco, following the
 publication of the company's annual results for 1999.

NINETEEN-ninety-nine was a good year for the world economy with growth of
around 2.5 per cent. That had a significant impact on the oil and gas
business. Oil prices are higher in nominal terms than at any time since the
Gulf War and 170 per cent higher than a year ago, and that is very largely due
to the discipline within OPEC over the last year.

Demand is rising - by over 1.5 million barrels a day year-on-year - and since
the OPEC meeting last March oil consumption has consistently exceeded
production. The result has been a sharp fall in stocks from above trend to
levels that are below normal.  OECD industrial stocks, for instance, have
fallen by some 200 million barrels. At the moment the fundamentals are
holding, and point towards relatively strong prices this year.

Looking further ahead, the oil price is as difficult to predict as ever. The
key drivers will be the actions of OPEC and the pattern of demand, so we
continue to use an  assumption of Brent at around $14 a barrel as the basis
for capital allocation and project analysis.

Turning to natural gas, in the US current prices seem to be well-supported by
the fundamentals. Strong economic growth and the expansion of gas-fired power-
generating capacity in the US are underpinning demand. In the UK, a relatively
warm winter so far has kept prices down while in the rest of Europe, prices
have recovered and have generally followed the oil price up, with the normal
time lag.

In refining, margins have been weak and volatile in the face of rising crude
prices and excess stocks, particularly of distillates, but globally this year
has started quite well. In marketing, margins in 1999 suffered from continued
competitive pressure and the rise in oil prices. But the marketing business in
general has been helped, of course, by the strength of the world economy.

In chemicals, demand has recovered on the basis of economic growth, and in
many product markets prices have risen from the bottom of the cycle. Against
that, of course, the increase we've seen in crude prices has maintained a
downward pressure on margins.

Overall then, we have a generally positive external environment, led by the
increases in oil prices but balanced by lower margins downstream, with a
cautiously robust outlook for this year.

So that's the context. Now, let's look at how our results stack up against the
targets we set for ourselves. What did we promise and what have we delivered?

In terms of both costs and returns at the group level, and margins in the
upstream business, we're already delivering sector-leading results.

We promised to reduce costs by $4 billion by the end of 2001 and we've already
delivered about $2.1 billion of that in 1999. Total headcount reductions of
18,000 exceeded our original expectations.

We suggested in July that we would increase our return by some 5 to 6
percentage points by the end of 2001. In fact we've already achieved a 3
percentage point improvement, in a third of the time, and we've improved clean
earnings per ordinary share by 39 per cent - from 23 cents to 32 cents.

In terms of investment, excluding acquisitions, we're committed to spending
some $24 billion to $26 billion over the three-year period to the end of 2001.
In 1999 we spent some $7 billion. Our gearing ended the year at 23 per cent -
in line with our target range of around 25 to 30 per cent. Our dividend policy
- which is to pay out around 50 per cent of post-tax earnings on a
through-cycle basis - remains unchanged. Sterling shareholders have seen a 3.3
per cent increase in dividend, year-on-year.

When we have sustained additional cash, above and beyond the funds needed for
the organic investment programme, then we have the option to balance further
growth with some buy-back of stock.

Accordingly, we'll be seeking shareholder approval at the AGM in April for
potential buybacks from time to time over several years of up 10 per cent of
our outstanding share capital. Our aim is to maintain the right balance over a
run of years between returning cash to shareholders and pursuing additional
value-adding expansions.

So we're ahead of schedule on all the key targets. Now, let me give you a
flavour of all the activity going on around the company.

Upstream we've made excellent progress in terms of costs. The commitment we
made last year was to reduce total supply costs by $2 a barrel by the end of
2001 to below $6 per barrel, and $1.40 of that reduction has already been
delivered. We also committed to reducing lifting costs by $1 a barrel by 2001,
and 60 cents of that target has been delivered so far. In total, finding and
development costs have also been cut by $1.40 a barrel from $4.70 to $3.30.

We replaced 110 per cent of our production by adding 1,170 million barrels of
oil equivalent to reserves at a finding cost of just $1.02 per barrel - which
is a 25 per cent improvement over the previous year. On top of that we added
some 2.5 billion barrels of newly-discovered resources which are not yet
booked.  Over half of these are in the Gulf of Mexico, Angola and the Caspian.
We've also improved the portfolio with divestments amounting in total to $1.3
billion of assets including oil properties in Canada. As expected, oil
production volumes for the year were steady and gas production rose by around
5 per cent.

Then we have a new business stream - Gas and Power - which is focused on
monetising the substantial amounts of discovered gas which are currently
without markets, as well as establishing new positions. We have the prospect
of expanding our activities in Trinidad and we're doing new business in Spain
and in North America, as well as establishing a new e-business trading gas in 
the UK.

In the Marketing business, volumes increased by 1.6 per cent with particularly
strong growth coming in new markets where sales increased by 18 per cent. We
opened over 170 new retail sites and we've expanded our range of convenience
stores here and around the world. We announced an initiative to market cleaner
fuels in 40 of the world's most polluted cities and that programme has already
got under way in 17 cities including Chicago, Paris, London and Warsaw.

We've continued to upgrade our refining base - starting with the refinery at
Toledo in Ohio, to be followed now by an upgrading of the Bulwer Island
refinery in Australia. Downstream we've sold a total of $575 million worth of
assets and we recently  reached agreement to buy out Mobil's share of our
downstream joint venture in Europe.

In Chemicals we've had a tremendous increase in volumes - up to almost 22
million tonnes with new production records set at 30 individual facilities.
The focus for the year has been on the upgrading of the portfolio - with new
and expanded facilities in China, the UK, Belgium and Texas. We've divested
over $500 million worth of assets and the upgrading of the portfolio continues
with new activity in China, the restructuring of the styrenics business in
Europe, and the development of new e-commerce trading markets.

All in all, 1999 was a very dynamic year, so let me talk for a moment about
2000. Our targets remain in place, and we intend to maintain the momentum of
delivery achieved last year. We're planning to deliver another $1 billion
saving in cash costs this year. In order to achieve this, we expect further
re-structuring charges during the year amounting to around $700 million. In
cash terms these re-structuring moves have a one-year payback.

We aim to increase our ROACE by a further 2 percentage points while continuing
to invest for growth. We'll invest some $8.5 billion this year in organic
growth - with nearly 60 per cent of that going to the upstream. And in
addition to that we're spending $1.5 billion to acquire the remainder of the
joint venture with Mobil in Europe, while divesting around $3.5 billion worth
of assets as we high-grade the portfolio.

We'll maintain our dividend policy and remain within our financial framework.

Behind these targets there are some key milestones.

Upstream, we aim to accelerate development in quality projects and to sanction
at least 1.5 billion barrels oil equivalent of new reserves, including
developments in the Gulf of Mexico, offshore Angola, Azerbaijan, Trinidad and
Vietnam.

During 2000 we'll be preparing another 1.5 billion barrels oil equivalent of
reserves for sanction in 2001, including more projects in the Gulf of Mexico
and Angola, and gas developments in Azerbaijan and Egypt.

Over the medium term, we expect production to rise strongly as more capital
projects are brought forward.

Over the short term, however, liquids production will fall because of the
impact of divestments. The Altura assets and higher-cost Canadian oil had
combined annualised production in 1999 of around 200,000 barrels per day.

Excluding the impact of divestments, oil production is expected to rise
slightly and gas production should increase by more than 5 per cent.

In Gas and Power, the agenda for 2000 is about securing markets to underpin
our production growth - in the Atlantic market and in the Far East.

We also intend to play a major part in the development of the gas market
between the Caspian and Turkey - and today's announcement confirming the
second successful well at Shah Deniz has allowed us to outline our initial
plans for export.

In Refining and Marketing, 2000 will see the dissolution of the Mobil joint
venture. We intend to separate the fuels business and to strengthen our
activity in lubricants in Europe. As we said in July, we want to reduce our
involvement in refining and that will involve the preparation for sale of the
Alliance refinery in the US.

In Chemicals, 2000 will see the first wave of our programme for the North East
of the UK come on stream - starting with the polypropylene and polyethylene
units at Grangemouth, and we should also be commissioning new plants in Ohio,
in Malaysia and in the Philippines.

And across all our businesses, we are starting to see the real benefits of
opportunities offered in the new digital world - through significant activity
and investment in internet, e-procurement and e-business capability.  I will
say more about that later in the year.

So to summarise: 1999 was a very good year for BP Amoco, and 2000 is set to be
better still. We're on track against all our targets and we remain within our
financial framework. We're determined to deliver a further improvement in
returns and growth in earnings per share.

We've begun to shift from cost control to a new balance with significant
growth as well as strong cost discipline. Across all our business streams,
we're turning the exciting potential created by the BP Amoco merger into
reality, and we believe we've established a healthy resilience against the
possibility of a downturn in prices.

So, on every front we can approach the year with confidence. We have a very
strong base, a strategy which is working and the prospect of real growth and
continued performance improvement.