Disposal

BP PLC
17 July 2001





TESORO TO ACQUIRE REFINERIES AND
MARKETING  OPERATIONS FROM BP

This release was issued in the United States today.

Tesoro Petroleum Corporation and BP p.l.c. announced today that they have
reached an agreement for Tesoro to acquire BP's Mandan, North Dakota and Salt
Lake City, Utah refineries and associated storage, pipeline, distribution and
gasoline marketing operations for $677 million, excluding working capital.

Upon completion of the deal, BP will transfer ownership of the two refineries,
associated North Dakota crude and product pipelines, bulk storage, eight
product distribution terminals, and  45 retail gasoline stations to Tesoro. BP
will also assign to Tesoro contracts for about 300 Amoco-branded stations that
are owned by about 80 Amoco-branded gasoline jobbers.

Subsequent to the transaction, Tesoro will own and operate five refineries
with a combined throughput capacity of 390,000 barrels a day. In addition,
Tesoro's branded retail network locations will expand to approximately 640
retail locations while adding approximately 700 employees to Tesoro.

Tesoro and BP will quickly seek required regulatory approvals and hope to
close the acquisition in the early part of the fourth quarter 2001. The two
refineries plan to continue to operate normally during the sales process and
will meet all existing product supply commitments.

BP's Salt Lake City refinery has a crude oil capacity of 55,000 barrels a day
and is the largest of four refineries in Utah. More than half of its
production is gasoline, with principal other products of diesel and jet fuel.
The Mandan refinery, which is located near Bismarck, North Dakota, has a rated
capacity of 60,000 barrels a day and produces mostly gasoline, with the
balance in distillates, jet fuel and other products.

Tesoro expects the transaction, which will be financed with debt, to be
accretive to earnings and cash flow beginning in the fourth quarter of 2001. '
We believe that these additions improve our ability to rapidly supply markets
in areas that we have previously targeted for retail and commercial marketing
expansion. These operations obviously complement our Mirastar investment
program. Finally, we are excited about the opportunity to build new business
partnerships with both the employees and the independent marketers in these
areas,' stated Bruce Smith, Tesoro's Chairman, President and Chief Executive
Officer.

'We are delighted that Tesoro has recognized that these refineries and related
operations are top performers, and that they plan to offer employment to all
of the current workforce. This is an important reassurance to our employees,
the markets and the communities served,' said Robert A. Malone, BP's Regional
President for the Western US. 'Today's milestone agreement ensures the markets
supplied by the Salt Lake City and Mandan refineries will have their ongoing
demand for gasoline and other petroleum products supply met.'

Malone noted that the divestment was consistent with BP's global refining
strategy, announced in 1999, of retaining only those refineries which provide
advantaged supplies for its marketing operations - particularly in the
provision of clean fuels - or which are integrated with other parts of the
business such as chemicals.

Lehman Brothers served as financial advisor to Tesoro while Rothschild Inc.
served as financial advisor to BP.

Tesoro Petroleum Corporation is an independent refiner and marketer of
petroleum products and provider of marine logistics services. Tesoro operates
three refineries in the western U.S. with a combined capacity of 275,000
barrels a day. Tesoro's branded retail network is currently comprised of
approximately 300 stations, of which more than 100 are company owned and
operated. More information at http://www.tesoropetroleum.com.

BP is an international energy company involved in the exploration of crude oil
and natural gas; refining, marketing, supply and transportation of
hydrocarbons; manufacturing and marketing of petrochemicals; solar power
systems; and gas-fired power generation. More information at www.bp.com.



Notes to Editors:

Assets to be Acquired

*        The Salt Lake City refinery employs approximately 190 people and has
five processing units, converting about 55,000 barrels of crude a day oil into
gasoline, jet fuel, diesel fuel, propane and industrial heating oil.

*        The Mandan refinery employs around 210 people and refines up to
60,000 barrels of crude a day into gasoline and distillates such as diesel and
jet fuel. The refinery's bulk storage and pipeline operations will be included
in the sale.

*        Distribution terminals included in the agreement are located in Salt
Lake City; Boise and Burley, ID; Mandan and Jamestown, ND; and Moorhead, Sauk
Centre and Twin Cities in Minnesota.

*        The agreement includes company-owned gasoline stations in Utah and
North Dakota and assignment of supply agreements for Amoco-branded gasoline
stations in Idaho, North Dakota, Utah, Washington, Wyoming, Nevada, Oregon,
Montana and northwest Colorado.


Tesoro

*        Tesoro acquired its Hawaii assets in 1998 from a unit of Broken Hill
Proprietary Co. Ltd. and its Anacortes, WA, refinery from Shell Oil Co.

*        The exploration and production businesses of Tesoro were sold at the
end of 1999. EEX Corp. acquired the company's domestic exploration and
production assets while BG International, Ltd. acquired its South American
operations.

*        Tesoro has a heavy oil conversion project under way at its Anacortes
refinery. This project, now scheduled for completion in early 2002, will allow
the refinery to use a greater percentage of lower-cost, heavy crude oil
feedstocks while improving its yield of high-value products.

*        In an agreement with Wal-Mart Stores, Tesoro is opening high-volume
retail locations at selected Wal-Mart locations in 17 western states under its
Mirastar trademark. The program, which began in the second half of 2000, is
scheduled to have approximately 80 outlets in operation by year-end 2001.

BP

*        The sale of the Alliance Refinery in Louisiana (to Tosco in September
2000) and the pending sales of the company's Yorktown, VA, refinery and its
share in the Singapore Refining Company, will meet BP's stated goal of
limiting its refining portfolio to those refineries with significant
integration value with other parts of the company, such as chemicals.

*        In addition to the two refineries included in its agreement with
Tesoro, and the Yorktown Refinery in Virginia, which is up for sale, BP
operates five other refineries in the US. They are located in Whiting, IN;
Toledo, OH; Texas City, TX; Cherry Point, WA; and Carson, CA.

*        Once the divestment process is complete, BP will have a total
worldwide refining capacity of some 2.8 million barrels a day, of which about
1.5 million barrels will be in the US.

*        BP has operations in 100 countries, more than 28,000 retail outlets
worldwide, approximately 16,000 outlets in the U.S., and reaches more than 10
million customers each day.


Further enquiries:


Susan Pirotina, Vice President, Communications, Tesoro: [phone]

Sarah Howell, Press Relations, BP: [phone]


This news release contains certain statements that are 'forward-looking'
statements within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934.  These forward-looking
statements contain projections as to the expected effects of the acquisition
on future earnings and cash flows.   Factors which may cause actual results to
differ from those forward-looking statements include, changes in general
economic conditions, disruptions due to equipment interruptions or failure at
Tesoro or third-party facilities, and other factors beyond Tesoro's control.
For more information concerning factors that could cause such a difference,
see Tesoro's annual report on Form 10-K and other of Tesoro's reports filed
with the Securities and Exchange Commission.  Tesoro undertakes no obligation
to publicly release the result of any revisions to any such forward-looking
statements that may be made to reflect events or circumstances that occur, or
which Tesoro becomes aware of, after the date hereof.



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