New Project

BP PLC
30 June 2005


PRESS RELEASE

June 30, 2005

BP AND PARTNERS PLAN CLEAN ENERGY PLANT IN SCOTLAND, INCREASING OIL RECOVERY AND
                               REDUCING EMISSIONS

BP, ConocoPhillips, Shell and Scottish and Southern Energy (SSE), announced
today that they are to commence engineering design of the world's first
industrial scale project to generate 'carbon-free' electricity from hydrogen.

The project would represent a significant new step in providing clean energy to
consumers, tackling carbon dioxide emissions believed to contribute to climate
change and enhancing the recovery and utilization of known world energy
resources.

The planned project - producing 'decarbonised' fuel and using it for power
generation - would convert natural gas to hydrogen and carbon dioxide gases,
then use the hydrogen gas as fuel for a 350MW power station, and export the
carbon dioxide to a North Sea oil reservoir for increased oil recovery and
ultimate storage. The project would reduce the amount of carbon dioxide emitted
to the atmosphere by the power generation by over 90 per cent. While each of the
component technologies making up the project is already proven, their proposed
combination in this project is a world first.

Initial engineering feasibility studies into the project have already been
completed. The partners will now carry out further detailed front-end
engineering design work with the aim of confirming the economic feasibility of
the scheme. This work would be expected to be complete in the second half of
2006. This will allow a final investment decision to be taken next year, subject
to which the project would then be expected to commence operation in 2009.

The full project would require total capital investment of some $600million. It
would also require an appropriate policy and regulatory framework which
encourages the capture of carbon from fossil fuel-based electricity generation
and its long-term storage.

When fully operational, the project would be expected to capture and store
around 1.3 million tonnes of carbon dioxide each year and provide 'carbon-free'
electricity to the equivalent of a quarter of a million UK homes.

Lord Browne, BP Group Chief Executive, said: 'This is an important and unique
project configured at a scale that can offer significant progress in the
provision of cleaner energy and the reduction of carbon dioxide emissions.

'For example, if applied to just five per cent of the new electricity generating
capacity that the world is projected to require by 2050, such schemes would have
the potential to reduce global carbon dioxide emissions by around one billion
tonnes a year - a material step in the challenge the world faces. The success of
this UK scheme will provide invaluable experience for the further application of
this concept worldwide.

'In the UK, and Scotland in particular, the project will offer a new,
large-scale source of decarbonised electricity to consumers as well as extending
the commercial life and contribution of the North Sea to the UK and Scottish
economies. BP will look for opportunities to replicate this scheme and apply the
associated technologies and experience in other parts of the world where we
conduct business.'

The project would be located close to Peterhead in north-east Scotland. A newly
built reformer plant would convert up to 70 million cubic feet of natural gas a
day into carbon dioxide and hydrogen and the hydrogen would be used as fuel for
a new 350MW combined cycle gas turbine power station.

Ian Marchant, SSE Group chief executive, said: 'The work on which we're now
embarking with our partners will enable us to evaluate the benefits of combining
a number of technologies in a way which would be a world first. The project
demonstrates that the energy sector is continuing to respond to the challenges
posed by climate change and by the need for a more sustainable use of natural
resources.

'Our work on this development with our partners complements our activities in
progressing new and emerging technologies for generating electricity from
renewable sources and represents a significant opportunity for the North East of
Scotland. Investment in the research, development and demonstration of new and
emerging technologies for generating electricity is a key part of SSE's
long-term strategy for sustainable electricity generation in the UK.'

The carbon dioxide generated by the reformer would be exported through existing
pipelines to the mature BP-operated Miller oilfield, 240 kilometres offshore,
where the platform would be adapted to allow for injection of the gas into the
reservoir four kilometres below the seabed to increase oil recovery from the
reservoir and for storage.

The Miller field is currently due to cease production in 2006/7 but the
injection of carbon dioxide into the reservoir could increase the amount of oil
extracted from the field, potentially allowing the production of up to 40
million additional barrels of oil and extending the life of the field by 15 to
20 years.

Notes to editors:

   • In its March 2005 Budget, the UK Government announced that it is
    examining the potential for new economic incentives to support the
    development of carbon capture and storage technologies and applications.


   • The Miller oil field is operated by BP (52 per cent) with partners
    ConocoPhillips (30 per cent) and Shell (18 per cent). The field, which began
    production in 1992, is 240 kilometers north east of Peterhead in water
    depths of 100 metres. Production peaked in 1995 at 150,000 barrels of oil
    and 220 million cubic feet of gas a day. The field now produces some 10,000
    barrels of oil and 15 million cubic feet of gas a day. Oil from the field is
    exported via the Forties pipeline system and gas is exported in a sour gas
    pipeline initially to shore at St Fergus and then on to SSE's Peterhead
    power station.



   • Scottish and Southern Energy is the UK's largest generator of
    electricity from non-nuclear sources, as well as being the UK's second
    largest energy distributor and third largest energy supplier. Its assets
    include Peterhead Power Station. Originally constructed in 1980, it was
    re-powered in 2000, with the installation of three new gas turbines
    requiring a total investment of £220 million. The reduction in carbon
    dioxide emissions resulting from the re-powering was equivalent to removing
    around 400,000 cars from the road.


   • BP, with its partners Sonatrach and Statoil, operates the In Salah
    geological storage project in Algeria that is storing approximately one
    million tonnes a year of carbon dioxide in a gas reservoir.


   • Oil and gas reservoirs are geological formations, often kilometres below
    the earth's surface, that have held oil, natural gas, and sometimes carbon
    dioxide trapped for millions of years in capped sandstone.

Further enquiries:

David Nicholas, BP Press Office: [phone]
Alan Young, Julian Reeves, Jennifer McGregor, SSE press office: 0870 900 0410

                                    - ENDS -




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