press release

Baku-Tbilisi-Ceyhan Pipeline Company formed

The following news release was issued by Baku-Tbilisi-Ceyhan Pipeline Company.

Aug. 1, 2002 -- Today in London, the BTC Owners signed the documents which formally create "The Baku-Tbilisi-Ceyhan Pipeline Company" ("BTC Co"). The document signing process was witnessed by representatives from each of the BTC Host Governments of the Azerbaijan Republic, Georgia, and the Republic of Turkey. This is an important step forward in the realisation of the pipeline which will export crude oil 1,760 kilometres from Azerbaijan and the Caspian region, through Georgia, to Ceyhan on the Turkish Mediterranean coast.

Each of the BTC Owners is now a shareholder in BTC Co, the company which will construct, own and operate the pipeline. The formation of BTC Co is an important and necessary step which will enable the owners to enter the full construction phase once the BTC Co Board of Directors has been assured of the completion of the few remaining pre-construction activities. The President of the State Oil Company of the Azerbaijan Republic ("SOCAR") is chairman of the BTC Co Board of Directors and BP is the operator of the project.

The BTC Co Shareholders are currently: BP (38.21%); SOCAR (25.00%); Statoil (9.58%); Unocal (8.90%); TPAO (7.55%); Eni (5%); Itochu (3.40%); and Amerada Hess (2.36%). In addition, TotalFinaElf has acquired the right to purchase a 5% interest in BTC Co; this transaction will be finalised soon.

The BTC Co Board of Directors has today announced its decision to award the initial contracts for the construction phase - for pipelay in Azerbaijan to Consolidated Contractors International Company (Greece) and for pipelay in Georgia and facilities in both countries to a Spie Capag (France) led joint venture with Petrofac (US). The tender list was approved in late 2001 by all of the BTC partners and the bid evaluation was carried out by the BP project team. The contracts are awarded on a lump sum basis. Bechtel (US) will continue as the Engineering, Procurement and Construction Management services contractor. BOTAS, the Turkish state pipeline company, will continue as the Lump Sum Turnkey contractor for the Turkish section of the pipeline.

The project remains on schedule to be completed in time for first oil from the Phase 1 development of the Azeri-Chirag-Gunashli oil field, which is planned for early 2005.

At the London meeting the BTC Co Board welcomed the Presidential Decree and other relevant decisions issued by the President of the Azerbaijan Republic concerning SOCAR's participation and equity interest funding for the project.

Note to Editors: Information on the BTC project and other major Caspian Sea developments, including the full Environmental and Social Impact Assessments is available on the Caspian Development and Export web site

Updated: August 2002