Closure of the Bulwer Island refinery – some facts The Decision to halt refining at Bulwer Island Over the years BP has invested heavily in the Bulwer Island refinery - a major upgrade in 1999-2000 to produce low sulphur fuels was about trying to improve its competitive position, but the emergence of very large, modern export refineries in the region has transformed the Australian transport fuels market and presented the Bulwer operation with an insurmountable challenge. • The market reality is that the marginal global refining capacity is moving to service the energy

growth areas – where they can capitalise on the low cost base of newer, very large export refineries that - fortunately for Australia - happen to be located in the Asian region.

• At the same time a number of refineries in the slower energy growth OECD countries have closed in the past decade.

• It’s a similar story in Australia. Over the past 10 years we’ve seen refinery closures with each decision based on the operating characteristics and supply model of the refinery in question.

• As these refineries have closed there’s been an increase in product import capacity including a number of new players entering the wholesale sector.

• There is no shortage - in fact there’s an overhang – of refined product in the Asia-Pacific region. • Australia’s diverse and more regionally integrated supply chain for liquid fuels provides a high

degree of energy security and will continue to do so. BP’s Employees Our decision today is no reflection on our hardworking and highly skilled employees and we acknowledge the uncertainty this decision creates for them and their families. In addition to meeting all of our obligations, BP is committed to supporting our employees throughout this process, including providing transitional support. We will also be re-doubling our focus on safe and reliable operations and on keeping employees informed of progress. By phasing the shut-down we can plan more effectively and give our employees more time to make decisions about their future. The Future of Bulwer Island The decision to halt refining operations at Bulwer Island will allow BP to access competitively priced product and divert capital into other parts of our fuels business. BP is committed to our customers both in Queensland and nationally and we will be actively pursuing growth opportunities in both the commercial and retail fuels markets. The refinery will stop manufacturing in mid-2015 and once processing has been safely halted, the import jetty, aviation fuel tanks and associated pipelines will remain operational while other storage tanks and pipelines will be placed on a care and maintenance basis for a potential future multi-product import terminal.

The term supply agreement BP and Caltex have signed an agreement which will see Caltex supply all of BP’s requirements for diesel and regular and premium grade petrol in South Queensland. BP will import Jet A1 from Asian refineries after some modifications to the Bulwer Island refinery’s existing infrastructure. The supply contract provides commercial benefits for both BP and Caltex. Importing more fuel Importing more fuel does not present a risk to energy security. All of the crude oil that the Bulwer Island refinery processes into fuels like petrol and diesel is actually shipped from Asia, the Middle East and Africa. Australia also imports fuels that have already been refined. In 2012-13 net imports accounted for 37 per cent of total consumption. This a well-established and very reliable way to deliver the required products to customers. BP is committed to continuing to provide its customers with a reliable and competitive fuel supply Fuel prices

Fuel prices are unrelated to whether or not BP operates a refinery at Bulwer Island.

It is the international benchmark price of petrol imports which forms the basis for retail prices in Australia, thus the decision to refine or import fuels has no impact on wholesale or retail prices. BP in Australia BP began operating in Australia in 1919 and is engaged in the exploration for and production of oil, natural gas and liquefied natural gas and the refining, transportation and marketing of petroleum and lubricant products. BP is one of the largest suppliers of fuel to Australia’s industrial sector has a nation-wide network of some 1,300 retail service stations.

For more information about BP in Australia please visit www.bp.com.au

BP Communications and External Affairs March 2014