THE WALL STREET JOURNAL: BP May Announce Ormen Lange Bid Late Tuesday –Source: “Norsk Hydro, with 18.04% of the equity, is operator of the development phase of the project, while Norske Shell , with 17.04% of the equity, will assume field operatorship later.” (ShellNews.net) 22 Nov 04

DOW JONES NEWSWIRES

November 22, 2004

LONDON -- BP PLC (BP) could announce late Tuesday a possible bid for its minority stakes in the giant Norwegian Ormen Lange natural gas field and associated pipeline infrastructure, a source close to the negotiations said Monday.

BP PLC (BP) surprised the market Oct. 19 saying it intended to dispose of its minority stakes in Ormen Lange.

At the time, analysts cited other partners as possible bidders for BP's 10.34% interest in Ormen Lange and a 10.2% interest in the associated Langeled pipeline project. These partners include the Norwegian operating units of Royal Dutch/Shell Group (RD, SC), ExxonMobil Corp. (XOM) and Norwegian peer Statoil ASA (STO). Major European gas companies couldn't be ruled out as well, analysts had said.

Ormen Lange is widely viewed as an attractive asset, possessing proven gas reserves of 397 billion cubic meters - about four times the U.K.'s annual entire gas consumption - and a to-be-built subsea pipeline which will connect to eastern England and will be the world's longest.

The field-pipeline project is expected to supply about 20% of the U.K. gas needs when it reaches plateau output after its 2007 startup.

A partner preemption right to acquire BP's interests exists only with Petoro, the state energy company, which has a 36.48%interest in Ormen Lange. But analysts said it was unlikely Petoro would exercise its right.

When announcing its intention to sell, BP justified its decision saying its interest in Ormen Lange and in the Langeled pipeline project were "non-strategic" and that its influence over the project suffered as it isn't the operator.

Norsk Hydro, with 18.04% of the equity, is operator of the development phase of the project, while Norske Shell , with 17.04% of the equity, will assume field operatorship later.

BP could fetch about $700 million from the Ormen Lange sale. The acquirer would then have to make a further $900 million contribution to total capital expenditure estimated around $9.1 billion.

Aside from field partners, possible outside bidders include dominant U.K. gas provider Centrica PLC (CNA.LN), gas supplier Ruhrgas (RUH.YY), a unit of Germany's E.On (EON) and Gaz de France (4774.FR).

-By Ian Talley, Dow Jones Newswires; +47 22 20 10 58; ian.talley@dowjones.com

However, sources close to the talks said that Danish oil and & gas company DONG, a hitherto unknown in the auction race, will likely emerge as the preferred bidder for the stake.

DONG is likely to issue a statement Tuesday saying that it has emerged as the leading candidate to acquire BP's equity in Ormen Lange, one of the sources said.

Bids for the stake had to be submitted Friday. BP officials sifted through the bids over the weekend. But the company has said it won't make a statement on the process until a winner emerges, perhaps later in December or even in the first quarter of 2005, when it expects to complete the disposal.

Contacted Monday, DONG said it wouldn't comment on market speculation.

But, DONG's efforts may be in vain.

Another source reckons that Petoro would preempt the sale, lifting its equity position in the gas field to almost 47%.

According to the auction process, it has 40 days in which to exercise its preemption rights, once a winning bidder has been selected.

-By Nina Sovich and Michael Wang, Dow Jones Newswires; 44-0207-8429353; nina.sovich@dowjones.com 44-0207-842-9386; michael.wang@dowjones.com.