2000 Highlights

Employee safety performance continued to be strong and remained among the best in industry.

The downstream organization successfully transitioned to four functionally aligned global companies.

Earnings more than doubled, to $3.4 billion, versus 1999. Refining results benefited from strong industry margins in the United States and Europe. Fuels and lubes marketing results were hampered by the inability to pass along the full rise in crude and feedstock costs to the marketplace. Earnings included a before-tax benefit of $1.1 billion from the capture of merger-related synergies and base business efficiencies.

Return on capital employed returned to double digits at 12 percent.

Merger-related divestments were essentially completed, including the dissolution of the BP/Mobil European Joint Venture; the sale of the Benicia, California, refinery; and the sale of certain fuels marketing assets in the U.S.

Worldwide petroleum product sales were lower by 900 thousand barrels a day versus last year's historic high. The primary causes of this decrease were required asset divestments and reduced supply sales.

Refinery throughputs at 5.6 million barrels a day were down versus 1999 largely because of the European joint venture dissolution; the sale of the Benicia, California, refinery; and reduced throughputs in the Asia-Pacific region due to poor industry conditions.

Industry Conditions

• Fuels refining margins were strong in the United States and in Europe due to lower inventories and strong demand.
  
  
• Refining margins in the Asia-Pacific region improved versus 1999, but were still weak due to excess capacity and lower demand growth from the slowly recovering regional economies.
  
  
• Fuels marketing margins weakened in most major markets largely due to the inability to pass on the increased supply costs associated with the more than $10-per-barrel average increase in crude oil costs versus 1999.
  
  
• Worldwide lube basestock margins improved slightly, reflecting a tighter supply-demand balance. However, finished lubes margins were down due to higher basestock and additive costs.