Disposal

BP PLC
23 June 2003


June 23, 2003



            BP TO BRING A NEW STRATEGIC PARTNER, STATOIL, TO ALGERIA


BP said today it had agreed in principle to sell a portion of its Algerian
interests to Statoil for $740 million in cash.

The sale comprises 50 per cent of BP's stake in the In Amenas gas condensate
project and 49 per cent of BP's interest in In Salah gas. Following the sale, BP
and Statoil will jointly operate the projects with Algeria's state oil and gas
company, Sonatrach.


In Salah and In Amenas, Algeria's third and fourth largest gas developments, are
expected to achieve first gas in 2004 and 2005 respectively.


Tony Hayward, BP's chief executive of exploration and production said: 'We are
pleased to bring Statoil into these projects and look forward to working with
them and Sonatrach to bring the projects on to production in 2004 and 2005'.


Olav Fjell, Statoil's chief executive said: 'This transaction gives Statoil an
exciting position as a joint operator working with BP and Sonatrach in proven
gas fields with significant growth potential. It is an important step towards
fulfilling our international growth and gas strategy.'


Subject to Sonatrach and Algerian regulatory consent and other approvals, the
sale is expected to complete by the end of 2003.


Goldman Sachs acted as exclusive financial advisor and Linklaters as exclusive
legal advisor to BP in connection with the transaction.


Notes to editors:


• In Amenas


The In Amenas project, the largest wet gas joint development project
in Algeria, is located approximately 850 kilometres south of Hassi Messaoud, in
the south-east of the country. The project includes development of four primary
gas fields and gas gathering and processing facilities. The project will produce
approximately 9 billion cubic meters a year of gas and some 60,000 barrels a day
of liquids and is on schedule to begin production in 2005. BP's share of
reserves at the end of 2002 was 252 million barrels of oil equivalent, according
to Securities and Exchange Commission definition.


Gas from In Amenas will be transported via pipeline to Hassi R'Mel and
from there to the ports of Arzew, Isser, and Skikda, or via two export pipelines
routed directly from Hassi R'Mel to Spain and Italy respectively.


In 1998 BP entered into a production-sharing contract with Sonatrach
extending to 2022, with the potential for an extension to 2027 with compensation
by way of freely marketable liquids stemming from the project.


• In Salah


The In Salah project, located some 1200 kilometres south of Algiers,
includes development of seven proven gas fields, gas processing facilities at
Krechba and pipeline infrastructure stretching 579 kilometres north to Hassi
R'Mel. The project is expected to produce 9 billion cubic metres a year of dry
gas and is on schedule to achieve first gas in 2004. BP's share of reserves at
the end of 2002 was 403 million barrels of oil equivalent, according to
Securities and Exchange Commission definition.


BP entered into a 30-year contract of association with Sonatrach in
February 1997 regarding In Salah's development and production. Sonatrach, BP and
Statoil will market gas until the end of the contract in 2027. Gas sales
contracts are in place with Enel for 4 billion cubic metres a year through to
2017 and with Sonatrach for 5 billion cubic metres a year through to 2019.


Further enquiries:


Toby Odone, BP Press Office, London, tel: [phone]

Kai Nielsen, Statoil Press Office, Oslo, tel [phone]


                                    - ENDS -






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