Re Joint Venture

BP PLC
26 June 2003


June 26, 2003



BP AND AAR SIGN RUSSIAN PARTNERSHIP AGREEMENT

BP, and the Alfa Group and Access-Renova (AAR) today announced that they have
signed a sale and purchase agreement - a significant step towards formal
completion of the proposed combination of the companies' Russian businesses.


The transaction, which was first announced in February, creates a new joint
venture company, TNK-BP, with BP and AAR each holding 50 per cent stakes. When
the transaction is completed, BP will become the world's second largest private
sector producer of oil and gas, and TNK-BP itself will be the tenth largest.


Closing adjustments reflecting increased debt levels in TNK-BP, partly due to
TNK's financing of the Slavneft acquisition, mean BP now expects to pay around
$2.4bn for its equity interest in TNK-BP, less than the $3 billion anticipated
at the time of the announcement in February. In addition there will be three
annual tranches of $1.25 billion, payable in BP ordinary shares valued at market
prices prior to each annual payment.


BP's Chief Executive Lord Browne expressed satisfaction at the pace of progress
made since February and noted the increase in production from the assets of the
new joint venture company, which is up so far this year by around 10 per cent
year on year, as well as in the level of exports. 'This is one important element
in the process of strategic renewal within BP. On the basis of the progress made
to date I believe we can complete the transaction over the summer and then begin
to deliver the tremendous value potential which we see.' More than 70 members of
the management team for the new joint venture company have already been
appointed.


The agreement signed today finalizes all the commercial arrangements for the
formation of the TNK-BP joint venture company, which will be effective from
January 1, 2003, subject to the approval of regulatory authorities including
those at the European Union, in Ukraine and in Russia.


Discussions continue between BP and AAR on whether the interest, which TNK has
taken in the Russian company Slavneft, should be included in TNK-BP. Any such
inclusion will result in additional consideration being paid to AAR.


Notes to editors:


• As at December 31, 2002 the total net assets and profits after tax of
the combination of businesses, which are the subject of this transaction, were
$5,100 million and $1,551 million respectively.


• BP was advised in this transaction by Merrill Lynch International,
Morgan Stanley and Co. Limited and United Financial Group.


• The BP shares to be issued to AAR will not be registered under the US
Securities Act of 1933 and may not be offered or sold in the United States
absent registration or an applicable exemption from the registration
requirements.


Further information:


BP Press Office, London, tel: [phone]


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