Trading Statement

BP PLC
10 January 2002





January 10, 2002



BP 4Q TRADING UPDATE



This trading update is aimed at providing an overview of the revenue and
trading conditions experienced by BP during the fourth quarter ending December
31, 2001.



The fourth 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 are subject to change and may
differ quite considerably from the final numbers that will be reported on
February 12, 2002. 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.



4Q Headlines

*        Full year reported production up around 5.5% over 2000

*        4Q production at new record level of at least 3.5 million boe/d, up
         around 3% on last year, around 4% adjusted for disposals

*        Environment weakens to below mid-cycle in aggregate

*        Dated Brent prices down nearly $6/bbl and refining margins down
         around $1.60/bbl compared with last quarter.



Exploration and Production


                                               4Q 2001  3Q 2001     4Q 2000
Brent dated ($/bbl)                            19.41    25.30       29.56
WTI ($/bbl)                                    20.31    26.72       31.99
ANS USWC ($/bbl)                               17.79    24.05       29.42
Gas Henry Hub first of month index ($/mmbtu)   2.43     2.93        5.28



Total full year reported production is projected to increase by around 5.5%
vs. 2000 in line with BP's stated growth target. During the quarter, reported
production is projected to increase by around 3% compared with 4Q last year,
and by around 4% adjusted for disposals activity. Total expected output in the
quarter of at least 3.5 mmboe/d will be a record.



Liquids prices during the quarter have continued to weaken with the WTI/Brent
differential narrower than historical spreads. We anticipate average liquids
realisations for the Group will be around $6 per barrel lower than in 3Q 01.
Henry Hub prices have been impacted by high storage levels and weakening
demand. North American gas realisations are expected to be around $0.5 per mcf
down on the previous quarter.



Gas and Power



Gas and Power marketing and trading volumes rose in 4Q (aided by the recent
purchase of selected TransCanada assets), although low market volatility
adversely impacted trading profits.   Offsetting the lower operating profits
from marketing and trading were improvements in NGL margins and a higher
Ruhrgas result.



Refining and Marketing



Refining margins have declined throughout the quarter, particularly in the US
and Europe. While average margins for the quarter remain above mid-cycle
levels, current margins are very weak and have resulted in reduced throughputs
at BP refineries in Europe and the US Gulf Coast.



Global Indicator Margins ($/bbl)




                           4Q 2001    3Q 2001    4Q 2000
USA
- West Coast                6.25       8.17       10.21
- Gulf Coast                1.79       3.24        3.78
- Mid West                  2.63       7.20        3.54

Europe
- NWE                       1.53       1.74        3.63

Singapore                   1.20       0.75        2.18


Global Indicator Margin*    2.40       3.83        4.46




The global indicator margin is a weighted average based on BP's portfolio.
Actual margins may vary because of refinery configuration, crude slate and
operating practices.



Refinery throughputs are down by 4-5% versus 3Q primarily reflecting the
divestment in the US of Mandan and Salt Lake City refineries during September,
and some run cuts during 4Q. Marketing sales in 4Q were down by 3-4% versus 3Q
resulting from a combination of divestment of our Northern European '
small-drop' commercial business, some retail business associated with the Salt
Lake and Mandan US refinery divestments and the expected seasonal downturn in
aviation fuel demand.  Aviation fuel demand was reduced in 4Q, following the
events of September 11, by about 15% compared with 4Q00 across the US and
Europe.



Retail automotive fuels margins have also weakened in the US and Europe and
are expected to be down by 10-15% versus 3Q01 although up by a similar amount
over the extremely depressed levels of 4Q 2000.



Chemicals



Weighted Chemicals Indicator Margin ($/te)*


4Q 2001      3Q 2001 (Prov.)               2Q 2001           4Q 2000
N/a          110                           105               98






The environment has continued to deteriorate throughout the quarter with lower
demand and weaker margins in many products particularly in our higher value
intermediates businesses.  Underlying volume growth remains under pressure in
the difficult economic conditions.



*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 Group's net debt gearing ratio on a proforma basis at year-end is expected
to be around 26%, compared with last quarter's figure of 24.3%, both near the
middle of our 20-30% target band.



Tax



The Group's effective tax rate for the full year on the proforma result
adjusted for special items will be around 26% compared with a rate of 26.7% in
2000.  The 4Q rate is expected to fall to around 20%, compared with 25.5% in
the prior quarter and 28% in the fourth quarter of last year. This reflects
the impact of stock losses and the utilisation of timing benefits, which
reduce the effective tax rate under UK accounting principles.



Stock Purchases



During the quarter the company has purchased for cancellation 13.6 million of
its own shares at a total cost of $99m. The full year figures are 154 million
shares and $1,274 million respectively.





- ENDS -