Trading Statement

BP PLC
2 July 2001


                             BP 2Q TRADING UPDATE

This trading update is aimed at providing an insight into the trading
conditions experienced by BP during the second quarter ending June 30, 2001.

The second quarter volume, expense, margin, throughput, sales, debt, tax rate
and other data referred to below are currently provisional and remain
estimates of likely outcomes, some being drawn from figures applicable to the
first month or so of the quarter. All such data is subject to change and may
differ quite considerably from the final numbers that will be reported on
August 7, 2001. The statement is, however, produced in order to provide
greater disclosure to investors and potential investors of expected outcomes
and to ensure that they all receive equal access to the same information at
the same time.



Exploration and Production


                                                  2Q         1Q          2Q
Crude and gas price trends                      2001       2001        2000

Brent dated ($/bbl)                            27.39      25.75       26.71
WTI Cushing ($/bbl)                            27.88      28.71       28.82
ANS USWC ($/bbl)                               26.05      24.93       26.86
Gas Henry Hub first of month index ($/mmbtu)    4.65       7.08        3.44
BP realised oil price ($/bbl)                      -      24.80       24.98
BP realised gas prices ($/mcf)                     -       4.96        2.51


Total production of oil and gas is expected to be up around 4 per cent on the
corresponding period last year, and down around 3 per cent on last quarter.
Within this, liquids volumes are anticipated to be down on last quarter's
1,937 thousand barrels per day at around 1,870 thousand barrels per day,
reflecting the start of maintenance activity and lower OPEC offtakes in Abu
Dhabi; gas volumes down at around 8,570 million cubic feet per day (8,895
million in 1Q), reflecting seasonal gas demand from the North Sea.  These
volume figures remain consistent with our existing volume growth targets.


Whilst the price of Brent crude moved higher during the quarter relative to
last quarter and in 2Q of last year, WTI moved in the opposite direction.
North American gas prices remained higher than last year but have softened
considerably compared with last quarter reaching parity with residual oil
prices.




Gas and Power


The good marketing and trading performance seen last quarter has improved
further and was sustained through 2Q. The normal decline in NGL volumes in 2Q
due to seasonal effects has been offset by slightly improved NGL margins
resulting from lower gas prices.



Refining and Marketing


                                                  2Q         1Q          2Q
                                                2001       2001        2000

Europe                                          3.35       2.35        3.46

USA    - Gulf Coast                             7.71       6.69        3.34
       -- West Coast                            9.11      10.94        6.00

Singapore                                       0.96       0.70        1.19


Global Indicator Margin*                        5.78       4.25        4.69


The refining and marketing division has seen significant volatility in margins
in 2Q. However, we continue to focus on consistently providing cost
competitive fuels and products to our customers.  The 2Q 2001 Refining Global
Indicator Margin (GIM) strengthened relative to last quarter and also the
prior year quarter with significantly higher margins in the US, particularly
the US Midwest, and Europe during April and May, partially offset by rapidly
weakening margins in all regions during June.



2Q 2001 refining throughputs are expected to be up around 2 per cent on 1Q
2001 as plants came back on stream following heavy planned 1Q 2001 turnaround
activity, but partially offset by discretionary run cuts in Europe due to
weaker European margins in June.



BP's 2Q 2001 retail marketing margins are expected to improve by around 20 per
cent versus the first quarter, with most of the improvement in the US, as
wholesale product prices have started to ease, specifically during June.



Total marketing sales in 2Q 2001 are anticipated to be at similar levels to
1Q, with an improvement in retail sales due to seasonal factors and BP retail
strategy implementation offset by reduced commercial volumes resulting from
the end of the heating season in the northern hemisphere.



*The global industry refining margin is a weighted average based on BP's
portfolio.  Actual margins may differ due to refinery configuration and
operating practices.

                                                             
Chemicals



Weighted Chemicals Indicator Margin ($/te)*   1Q '01      4Q '00       2Q '00
                                                  93          98          132


Compared with 1Q, chemicals margins and demand have weakened further in 2Q
2001.


Chemicals production volumes for 2Q 2001 are expected to be around 3 per cent
higher than in the previous quarter reflecting the purchase of the other half
of the Erdoelchemie joint venture during May.  However, a significant plant
outage at Chocolate Bayou, following a fire in 1Q, will impact 2Q earnings by
about $65m. There were also recurring problems at Grangemouth and extensive
scheduled maintenance at Lavera. All plants are expected to be fully
operational again during 3Q.  Demand and margin weakness is associated with
the economic slowdown being experienced in the US, Asia and Europe.



*The Chemicals Indicator Margin is a weighted average of externally-based
product margins. It is based on market data collected by Chem Systems in their
quarterly market analyses, then weighted on BP's product portfolio. This is
described more fully in the Group's quarterly results releases.



Debt


The net debt gearing ratio on a proforma basis at end 2Q is expected to be
around 25 per cent which compares with 23.5 per cent last quarter.  The slight
increase reflects the acquisition of Erdolchemie and the timing of tax
payments.



Tax


The effective tax rate on the proforma result adjusted for special items is
anticipated to be 29 per cent which compares with last quarter's figure of 28
per cent.



Stock Purchases



The company purchased for cancellation 32 million of its own shares during the
quarter.


                                   - ENDS -