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January 14, 2011

Rosneft-BP: Global and Arctic Alliance

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Russia The worlds largest oil andhydrocarbon producer

500

1,000

1,500

2,000

2,500

3,000

Rosneft

LUKoil

TNK

BP

Shell

W

intershall

E.ON

Sinopec

ExxonMobil

ONGC

ConocoP

Mitsui

Mitsubishi

Hess

MOL

Total

Chevron

Eni

kboepd

BP

Source: WoodMackenzie

0

2

4

6

8

10

12

14

16

18

20

Production(mmboepd)

Source: BP 2010 Statistical Review

Russia is the worlds largest oil and gas producer Rosneft and BP, through TNK-BP, are leading oil

producers in Russia

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BP and Rosneft are forming a globalstrategic alliance

A leading German

refining

partnership via

50:50 ROG JV

Arctic exploration agreement

focused on South Kara Sea

Significant shareswap

Wider Arctic

protocol

A unique alliance unlocking future growth potential for both BP and Rosneft

Internationalupstream

collaboration

Exploration

offshore Sakhalin

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Strategic Alliance: Key Points Major Arctic Project

Creation of a world-class joint exploration program in the Russian South

Kara Sea, one of the most prospective unexplored basins in the world

BP and Rosneft will explore three licence areas (EPNZ-1, EPNZ-2

and EPNZ-3),

The area covers 125,000 km2

and in water depths which are

relatively shallow

The area has roughly the size and prospectivity

of the UK North Sea

Rosneft was awarded the licences in late 2010

Over the next two years, BP and Rosneft will form a joint operatingcompany with a 66.67% Rosneft, 33.33% BP participation

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Strategic Alliance: Key Points Equity Swap

First major national oil company

international oil company cross-

shareholding in the global oil and gas industry BP will acquire a 9.5% stake in Rosneft

Rosneft in return will be issued new BP shares giving it a 5% stake

BP already has a 1.3% shareholding in Rosneft and as a result of

the

announced transaction, BPs stake in Rosneft will increase to 10.8%

BP and Rosneft view their cross shareholdings as long term and

strategic and have agreed a two year lock up period

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Strategic Alliance: Key Points Arctic Technology Centre & International Projects

Formation of an Arctic technology centre

In cooperation with leading Russian and international research

institutes

Focused on developing innovative technologies for the safe

extraction of hydrocarbons from the Russian Arctic shelf

Leading German refining JV

Discussion of joint international projects

Support from Russian and UK governments

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The licence area covered by BP and Rosneftagreement can be compared to the UK North Sea

both in size and potential

Add North Sea overlay to scale

UK Central &

Northern

North Sea to

appx

scale

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This agreement is historic for the oil and gas industry and signals an

enhanced alliance between BP and Rosneft

Consolidates and underpins BPs position as the leading partner in the

Russian oil industry while addressing Rosnefts

international ambition

The partnership demonstrates mutual confidence in value upside and

growth potential

A major step forward: a new modelfor the oil industry

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Notes

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