Re Agreement

BP PLC
4 June 2001

June 3, 2001



                BP TAKES MAJOR SHARE IN MASSIVE SAUDI PROJECT



BP chief executive Sir John Browne today (June 3, 2001) signed an agreement
for the company to take a major interest in Saudi Arabia's largest gas
development and the first significant hydrocarbons project for 25 years in
which the Kingdom has invited foreign companies to participate.



BP will share stakes with Shell, ExxonMobil and Phillips in the integrated
Core Venture 1 project to find and develop gas reserves in a 65,000-square
kilometre area in the east of the Kingdom. The exploration acreage, in blocks
69-79, lies south of Ghawar, the largest oil field in the world and covers an
area the size of Ireland and only slightly smaller than the United Arab
Emirates.



Speaking after a signing in Jeddah, Browne said: 'For BP, this is a new,
exciting venture. We have never had a significant presence in the Kingdom
before. So we consider we have secured a tremendous prize and look forward to
working with all concerned to make this a very successful project.'



Gas, when found, will be transported and processed into feedstock for two
giant petrochemical projects, one in Jubail on the Gulf in the east of the
country and the other in Yanbu on the Red Sea coast. The dry gas will be used
for two giant 2000-megawatt power stations and associated desalination
complexes. In total the capital expenditure could reach $15 billion.



The four companies will share interests in the entire chain of development,
from the well-head to the end-user. Although the structure of the project and
the respective interests of the participants remain to be negotiated over the
coming months, BP expects to invest up to a quarter of the $15 billion cost of
the project. It is likely that ExxonMobil will lead the consortium.



Browne said: 'We are delighted to be involved in one of the largest integrated
gas development projects in the world. BP's expenditure alone on these
projects could amount to over 14 billion Saudi Riyals or approaching $4
billion. And this may only be a start if we are successful in finding gas in
substantial quantities.



'For Saudi Arabia, the project will also give a substantial stimulus to jobs
and economic growth, both vital to the Kingdom. Plentiful energy and water are
a driving force of economic development,' he said.





Notes to Editors:



Core Venture 1 is the largest of three projects in the Saudi natural gas
initiative. In total the three projects will attract investment of about $25
billion.



The Saudi natural gas initiative was launched in late 1998 by HE Crown Prince
Abdullah on a visit to Washington DC when he asked international oil companies
to submit investment proposals to the government. It is the first time
international firms have been allowed in the country's upstream since the
1970s.



BP's operations to date in Saudi Arabia include lubes distribution, a solar
panel assembly plant near Riyadh, and Air BP is involved in a jet refuelling
venture in the west of the country. BP is a significant buyer of Saudi crude
and has a representative office in Riyadh.



The Ghawar field is the largest in the world, producing more than 4 million b/
d. Saudi Arabia with 264 billion barrels has 25 per cent of the world's oil
reserves and at 205 trillion cubic feet has 4 per cent of the world's proven
gas reserves.





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