Re Joint Venture

BP PLC
30 January 2002







                  BP AND E.ON GO AHEAD WITH VEBA DEAL AND SELL

                 UPSTREAM ASSETS TO PETRO-CANADA FOR $2 BILLION



BP today announced that it has agreed with E.ON to go ahead with its plan to
acquire a majority stake in Veba Oil with effect from February 1. The two
companies separately said they have agreed in principle to sell Veba's oil and
gas production subsidiary to Petro-Canada for $2 billion.



BP will pay E.ON $1.63 billion in cash and assume some $850 million of debt in
return for 51 per cent and operational control of Veba Oil which owns Aral,
Germany's biggest fuels retailer. From the sale of Veba's upstream oil and gas
assets to Petro-Canada, BP would receive some $1.65 billion, with the balance
going to E.ON.



BP additionally said it would be prepared to pay a further $2.4 billion in cash
for the remaining 49 per cent of Veba Oil, which E.ON can require it to buy from
April 1 this year under the terms of an agreement between the two companies
announced in July, 2001.



The agreement envisaged part of the payment for Veba Oil being met by the sale
to E.ON of BP's wholly-owned subsidiary Gelsenberg which holds a 25.5 per cent
stake in Germany's largest gas distributor, Ruhrgas. Although that sale was
prohibited by Germany's Federal Cartel Office, it is being appealed to the
German Economics Ministry which is expected to rule early this summer.



BP chief executive Lord Browne said: 'The acquisition of Veba Oil will be
significantly accretive to downstream earnings from 2003.



'It is a first-class deal for BP. Whether we finance it in cash or partly from
the sale of Ruhrgas, it will give BP the largest share of Europe's most
important fuels market, rapidly enhance our returns and greatly improve our
prospects for downstream growth.'



BP said that if the German Economics Ministry were to approve the Ruhrgas
transaction, it would sell its Ruhrgas stake to E.ON for an agreed $2.1 billion.



BP said the acquisition costs of Veba would be partly offset by its $1.65
billion share of the proceeds from the sale of Veba's oil and gas production
business to Petro-Canada. These comprise interests in a dozen countries with oil
and gas equivalent production totalling some 175,000 barrels a day.



It would also recoup cash from selling retail, refining and chemical assets
required to be disposed of by the regulatory authorities as a condition of the
deal.



Notes to Editors:



  • Announced in July 2001, the Veba Oil deal was cleared by both the German
    Federal Cartel Office and the European Commission's Merger Task Force in
    December 2001 on condition that BP disposed of 4 per cent of the combined
    26.5 per cent retail market share of BP and Aral in Germany, 45 per cent of
    its stake in the Bayernoil refinery, two of its three shareholdings in the
    ARG ethylene pipeline, and made it possible for a new entrant to supply
    aviation fuel on competitive terms at Frankfurt airport



  • Aral has a network of just over 2,600 retail sites in Germany with daily
    fuel sales of around 170,000 barrels and 1.7 million customers a day. It
    also has a further 450 retail sites in adjacent countries - chiefly Austria
    and Poland. BP has 950 retail sites in Germany



  • Veba Oil owns the Lingen refinery and has interests in four other
    refineries in Germany. BP has a 55 per cent interest in the Bayernoil
    refinery



  • Veba Oil employs around 8,600 staff and BP has around 4,200 staff in
    Germany



  • The sale of Veba Oil's upstream assets to Petro-Canada is subject to
    various regulatory and other consents.



  • The financial numbers relating to the European element of this transaction
    are expressed in US dollars at an exchange rate of US$0.86 to the Euro.



Further Information:



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