Re Joint Venture

BP PLC
17 May 2007


May 17, 2007


         Rio Tinto and BP join forces to develop clean energy worldwide


BP and Rio Tinto today announced the formation of a new jointly-owned company,
Hydrogen Energy, which will develop decarbonised energy projects around the
world. The venture will initially focus on hydrogen-fuelled power generation,
using fossil fuels and carbon capture and storage (CCS) technology to produce
new large-scale supplies of clean electricity.


Decarbonised energy projects are based on the conversion of fossil fuel
feedstocks such as coal, petroleum coke (a refinery by-product) or natural gas,
to hydrogen and carbon dioxide gases, with the carbon dioxide being captured and
sent for permanent storage in geological formations deep beneath the Earth's
surface.


In power projects, the hydrogen would be used to fuel a gas turbine for
generation of industrial-scale supplies of electrical power. Full integration
with CCS technology would ensure that 90 per cent of the carbon dioxide which
would otherwise have been emitted to the atmosphere would be safely captured and
stored.


There is rapid worldwide development of new power generating capacity as older
power stations are replaced and new plants built to meet growth in demand,
particularly in the rapidly expanding economies of the developing world.
According to the International Energy Agency, about two-thirds of the generating
capacity that will be needed in the next 25 years has yet to be built. Much of
the growth will be in countries where coal is abundant and so the fuel is
expected to be a significant part of the energy mix.


The recent UN Intergovernmental Panel on Climate Change (IPCC) report into the
potential to mitigate the effects of climate change recognised that reducing
carbon dioxide emissions from power generation will be vital and that
technologies such as CCS will have a key role in meeting the challenge. It also
recognises the role of governments in putting in place appropriate regulatory
and support mechanisms to enable this to happen.


Hydrogen Energy will benefit from the world-leading capabilities of both parent
companies: Rio Tinto's expertise and world-class assets in coal extraction and
supply; and BP's experience and expertise in chemical processing, low carbon
power generation and carbon capture and storage.


Tom Albanese, Chief Executive, Rio Tinto, said: 'Coal is a key part of Rio
Tinto's energy business and we believe it has an essential role in generating
clean power in the future. The investment we are making in Hydrogen Energy will
allow us to deliver decarbonised energy and carbon capture and storage. Although
initial projects may be based on non-coal feedstocks, they will be significant
building blocks in the development of coal gasification on an industrial scale.
Investing now means we will be well-placed to create value for shareholders from
opportunities in the emerging clean power market.'


Tony Hayward, BP group chief executive, said: 'Projects such as these have the
potential to help deliver the carbon emission reductions which companies and
countries around the world are now seeking. This will only be possible if
companies work together and work alongside governments. The combination of
skills and experience which BP and Rio Tinto bring will allow us to accelerate
the development and deployment of these important new technologies and
projects.'


Hydrogen Energy, whose final formation will be subject to regulatory approvals,
will identify and secure opportunities for decarbonised energy projects
worldwide, working with governments to determine appropriate policies and
regulatory regimes, and develop and operate the assets, with partners where
appropriate. The projects will typically use coal or petroleum coke as
feedstock; although in some cases natural gas may be used.


The previously announced hydrogen-fuelled power projects in Peterhead, Scotland
and Carson, California will become part of Hydrogen Energy. As part of the
agreement, Rio Tinto will make a cash payment to BP of some $32million, subject
to post-completion adjustments.


Hydrogen Energy will be headquartered in Weybridge in the south-east of England
and will initially have a staff of 75 seconded from the parent companies. The
chief executive of Hydrogen Energy was today named as Lewis Gillies, formerly
head of BP's hydrogen power business and its chief financial officer as Peter
Cunningham, formerly head of business evaluation for Rio Tinto.


Notes to editors:


  • Hydrogen Energy will be equally-owned by BP and Rio Tinto. Further
    information on the company can be found at: www.hydrogenenergy.com


  • BP, together with Scottish and Southern Energy, announced plans in June
    2005 for its first hydrogen power project, in Peterhead, Scotland. The
    planned project would use natural gas as a feedstock, generating some 475MW
    electricity and capturing and storing some 1.8 million tonnes of CO2 a year
    in the North Sea Miller oilfield. Injection of the CO2 into the oilfield
    would also increase recovery of oil from the reservoir by an estimated 50-60
    million barrels. Engineering design for the project is complete and the
    partners hope the project will be able to take part in the competition the
    UK government has announced to select which such project should be
    supported. If the decision to go ahead with the project were taken at the
    beginning of 2008, it would be expected to be in commercial operation in
    2011.


  • The second planned hydrogen power project, in Carson, California, USA
    would use petroleum coke as feedstock. In January 2006, BP and partner
    Edison Mission Group announced plans to develop the 500MW power project
    alongside BP's Carson refinery, about 20 miles south of Los Angeles. The
    project would capture some four million tonnes of CO2 a year and transport
    it for reinjection into geological formations in southern California for
    permanent storage. Subject to the successful outcome of engineering studies
    and appropriate policy being in place, it is anticipated the final
    investment decision could be taken in time for the plant to be operational
    by the end of 2012.


  • Rio Tinto is a leading international mining group headquartered in the
    UK, combining Rio Tinto plc, a London listed public company, and Rio Tinto
    Limited, which is listed on the Australian Stock Exchange. The Group finds,
    mines and processes the earth's mineral resources - metals and minerals
    essential for making thousands of everyday products that meet society's
    needs and contribute to improved living standards. The Group's major
    products include aluminium, copper, diamonds, energy products (coal and
    uranium), gold, industrial minerals (borates, titanium dioxide, salt and
    talc), and iron ore. Its activities span the world but are strongly
    represented in Australia and North America. There are also significant
    businesses in South America, Asia, Europe and southern Africa. For further
    information, see: www.riotinto.com


  • BP is one of the world's largest oil and gas companies with operations
    in more than 100 countries across six continents. The company's main
    businesses are exploration and production of oil and gas; refining,
    manufacturing and marketing of oil products and petrochemicals;
    transportation and marketing of natural gas; and a growing business in
    renewable and low-carbon power, BP Alternative Energy. BP's low carbon
    interests combined in BP Alternative Energy include: BP Solar; the company's
    fast growing interests in wind power; gas-fired power generation; and BP's
    interest in Hydrogen Energy. For further information see: www.bp.com and
    www.bpalternativenergy.com.


Further information:

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                                    - ENDS -



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