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BP Starts Up Galapagos Development

Today BP announced that on June 3, 2012 it began the initial start-up of the Galapagos development in the deepwater U.S. Gulf of Mexico, one of a series of new major upstream projects that the company expects to bring into production this year.

“The start-up of this project in the Gulf of Mexico is one of BP’s key operational milestones for 2012, one of six high-margin projects we expect to come on stream this year,” said Bob Dudley, BP group chief executive. “I expect that the operational progress we are now making will deliver increasing financial momentum for BP as we move into 2013 and 2014.”

The Galapagos development includes three deepwater fields and increases the capability of a key offshore production hub for BP. The fields - Isabela, Santiago and Santa Cruz - are being produced using subsea equipment on the floor of the Gulf. A new production flowline loop has been added to carry output to the nearby Na Kika host facility, a BP-operated platform located roughly 140 miles southeast of New Orleans in 6,500 feet of water.

The Na Kika facility, with a production capacity of 130,000 barrels of oil equivalent per day, has been modified to handle output from the three fields. Full ramp-up of the project is expected around the end of June.

“The Galapagos development marks another significant step forward for BP in the Gulf of Mexico, and reflects the potential we continue to see in this world-class basin, now and in the future,” said James Dupree, Regional President of BP’s U.S. Gulf of Mexico business.

BP’s overall interest in the three-block area that includes the fields comprising the Galapagos project is about 56 per cent. Noble Energy, Inc., Red Willow Offshore, LLC, and Houston Energy, L.P., are co-owners. BP is the operator of the Isabela field, while Noble Energy operates the Santiago and Santa Cruz fields.

The Galapagos development required the installation of new subsea infrastructure, production risers, topsides as well as other modifications.

BP expects to invest at least $4 billion a year on oil and gas development in the Gulf of Mexico over the next 10 years, following its strategy of focusing investment and future growth around the company’s strengths, including deepwater exploration and development.

“BP’s continuing investment in the Gulf of Mexico is yet another example of our commitment to the U.S. economy and energy security,” Dudley added. “This investment, along with our ongoing commitment to the Gulf Coast region, demonstrates the importance of the U.S. to BP’s long term strategy.”

BP in the Gulf of Mexico:

  • BP has been exploring in the deepwater Gulf of Mexico for more than a quarter of a century and is the Gulf’s largest producer of oil and gas, both in the deep water (greater than 1,200 feet) and in total.
  • BP is the largest leaseholder in the deepwater Gulf of Mexico, owning more than 650 leases.
  • BP has interests in more than 20 fields in the Gulf, including Thunder Horse, Atlantis and Mad Dog, among the Gulf’s largest and deepest fields.

BP in America:

  • BP has invested more in the United States over the last five years than any other oil and gas company. With more than $52 billion in capital spending between 2007 and 2011, BP invests more in the U.S. than in any other country.
  • The company is the second largest producer of oil and gas in the U.S., a major oil refiner and a leader in alternative energy sources including wind power and biofuels. BP provides enough energy each year to light the entire country.
  • With 23,000 U.S. employees, BP supports nearly a quarter of a million domestic jobs through its business activities.
  • For more information, view our BP in America animation video at http://www.youtube.com/watch?v=I6n9cZ1xxQw or visit www.bp.com.

Cautionary statement
This press release contains certain forward-looking statements with respect to the operations and businesses of BP and certain of the plans and objectives of BP with respect to these items. These statements generally, but not always, are identified by the use of words such as "will", "expected to", "is intended to", "projected" or similar expressions. In particular, these include certain statements regarding: expectations regarding certain operational milestones in 2012; expectations regarding financial momentum in 2013 and 2014; expectations regarding drilling and rig activity in the Gulf of Mexico; expectations regarding future investment oil and gas development in the Gulf of Mexico; and the expected timing, start-up and composition of future projects. Actual results may differ materially from those expressed in such statements, depending on a variety of factors, including the factors such as: the timing of bringing new fields on stream; the timing and successful completion of certain disposals; OPEC quota restrictions; PSA effects; future levels of industry product supply, demand and pricing; operational problems; general economic conditions; political stability and economic growth in relevant areas of the world; changes in laws and governmental regulations; actions by regulators; exchange rate fluctuations; development and use of new technology; the success or otherwise of partnering; the actions of competitors; natural disasters and adverse weather conditions; changes in public expectations and other changes to business conditions; wars and acts of terrorism or sabotage; and other factors discussed under "Risk Factors" in BP's Annual Report and Form 20-F 2011 (SEC File No. 1-06262) as filed with the US Securities and Exchange Commission (SEC).

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