Pension Advisory Committee Meeting

1. Pension Advisory Committee Meeting December 13, 2007 1

2. BP Canada Pension Advisory Committee Meeting Agenda for December 13, 2007 Topic Presenter Time PR=PreRead. • BP Canada 2007 Funding Val Results Towers Perrin 1:00 • Education Session Mercer 1:45 -PR • Complete Overview session from June 26 • Principles of Investment Management – Part 1 • Investment Manager Changes Update Herb Kostler 3:15 -PR • BGI for BlackRock • Pyramis for New Star • SSgA Alpha Port Strategy Replacement • Saving Plans Review Update 3:45 -PR • Update and Implementation Timeline Stacey Norman • Investment Fund Selection Herb Kostler

3. BP Canada Pension Advisory Committee Meeting Agenda for December 13, 2007 Topic Presenter Time PR=PreRead. • Acceptance of PAC Meeting Minutes Herb Kostler 4:15 • For Sept 6 Meeting - PR • Pension Task List / Point-Out items - PR • Review of outstanding action items from previous meeting • PAC Investment Portfolio Reviews Herb Kostler 4:30 • Other Topics for Discussion 4:45 • 2006 BP Canada Cost Measurement Survey Herb Kostler • Plan Amendments Francine Swanson

4. BP Canada2007 Funding Valuation Assumptions • Towers Perrin Presentation Slides

5. BP Canada2007 Funding Valuation Options • Preliminary Funding Valuation results were shared with the Corporate Finance and Pension Investment Group in London. • The alternatives for filing and contribution options were discussed • These discussion suggest that: • The 2007-10-01 Valuation not be filed. This preserves contribution flexibility. • A contribution holiday be taken based on the 2006-10-01 valuation beginning January 2008. • Use the 2008-10-01 valuation to determine if our funding position has changed and if a contribution is appropriate during the fourth quarter of 2008.

6. Mercer Educational Session • Complete Overview session from June 26 • Principles of Investment Management – Part 1

7. Investment Manager Changes - Update • Approved Executive memorandum for entering into an IMA with BGI and Pyramis was sent our as pre read • BGI IMA is being review by BP Legal. • Pyramis IMA is being review by BP Legal. • SSgA situation was outlined to PAC member in the email note dated November 16, 2007 • Majority of SSgA funds have been liquidated and moved into short term cash. The fixed income beta exposure via futures contracts and swaps remains in place. • Awaiting to begin discussion with Trust Investment Group on investment options and manager search. Some examples of investment options and managers that provide them include: • Traditional FI – Fiera • Core Plus FI – Pimco • Portable Alpha – TD Asset Management • Absolute Return Bond Fund – ABN Amro • Global FI – T. Rowe Price • Index Fund – TD Asset Management

8. BP Canada Savings Plan provider change PAC meeting December 13, 2007 Objective: update PAC on project status and timing

9. Savings Plans – service provider • RFP for consulting services sent - June 18 • Three responses: Mercer, Towers Perrin, Watson Wyatt • Watson Wyatt was selected, Executive Memo signed July 25 • Learnings - RFP process: • Brokerage-type arrangements for savings plans expose plan sponsors to potential legal liabilities under CAP guidelines • All consultants advised that when establishing new plans or reviewing current ones over the past few years, all resulted in the selection of insurance companies as plan administrators • The review then became a project to transition services from Scotia McLeod to a new service provider

10. Savings Plan provider change • New provider chosen in September • Obtained PAC & CLT endorsement, President approval • Project kick-off meeting with Sun Life: September 20 • Project plan • Communications strategy & timing of employee sessions • Investment structure defined • Transition plan from Scotia McLeod • Request from Randy & Dave to delay effective date • January 1, 2008 changed to June 1, 2008

11. Savings Plan – actions & timeline • September – December, 2007 • HR project team working to finalize project details, timeline and communications with Sun Life; work through transition plan with Scotia McLeod • March, 2008 • Employee communications begin mid-March • April, 2008 • Employee information sessions & enrolment • June 1, 2008 • Effective date for new contributions to Sun Life (first data feed is June 15) • TBD: effective date for transferred accounts from Scotia McLeod to Sun Life (~ 60-90 days post June 1)

12. Benefits to employees Better service – access to 1-800 call centre for plan details and investment information; state of the art website with modeling tools, retirement planning information, ability to change asset mix & investments on-line, easy to read statements Lower Investment Manager Fees (IMFs) under insurance platform (Scotia charges full retail of 2-2.5% vs. 0.9% or less with Sun) Single access point and sign-on for group benefits including health, dental, life, savings More secure savings plan with strong governance support in place Benefits to BP Savings of $80,000 per year administration fee to Scotia McLeod Better service – access to better reporting, investment fund performance, vendor performance management Able to fulfill responsibilities under CAP guidelines, including manager monitoring, provision of information & education, etc. Able to expand offerings in future, if desired - e.g. RRSP season, financial planning workshops, pre-retirement workshops, etc. Integrate & streamline benefits communications, enhance employee understanding of program value Savings plan–benefits/cost savings

13. Proposed Investment StructureSeptember 27, 2007 • Default investment option for Group RRSP and DPSP • Default investment option for Savings Plan – employee contributions • BP stock is only available as an investment option under the Savings Plan; employer contributions for the Savings Plan are directed to BP stock, however, the employee may move these contributions to any other investment option at any time ** Global fixed income may be offered in addition to the core fixed income fund, if available on the provider’s platform Funds not in final offering to employees (This data is an extract from Watson Wyatt Reports)

14. BP Canada Group RRSP/DPSP/Savings PlanFund Line-Up as of October 31, 2007 (This data is an extract from Watson Wyatt Reports)

15. BP Canada Group RRSP/DPSP/Savings PlanFund Line-Up as of October 31, 2007 (This data is an extract from Watson Wyatt Reports)

16. BP Canada Group RRSP/DPSP/Savings PlanFund Line-Up as of October 31, 2007 • Default investment option for contributions directed to REGISTERED accounts • Default investment option for contributions directed to NON-REGISTERED accounts • BP stock is only available as an investment option under the EMPLOYER’S contributions to the Savings Plan. Methods for employee investing in BP stock are still under consideration. (This data is an extract from Watson Wyatt Reports)

17. BP Canada Group RRSP/DPSP/Savings PlanFund Line-Up as of October 31, 2007 (1) Default investment option for contributions directed to NON-REGISTERED accounts (2) Default investment option for contributions directed to REGISTERED accounts – fees vary depending on years to maturity (3) BP stock is only available as an investment option under the EMPLOYER’S contributions to the Savings Plan. (4) Fees are composed of: a) Investment Manager Fee b) Sun Life Basic Admin Fee – 12 bps c) Sun Life Operating Expense Charge – 3 to 5 bps (4 bps assumed above)

18. Future Meeting Dates • Scheduled dates • 2008-2-13 (Revised Notice Sent) • 2008-5-15 (Meeting Notice Sent) • 2008-9-04 (Proposed) • 2008-12-11 (Proposed)

19. Outstanding Action Items As of Last Meeting 2007-9-6 • Prepare a BP Canada Funding Valuation Report as of 2007/10/1. (2007/9/6 – Towers Perrin / Herb) • Trust Investments to provide Francine with Fund subscription documents (2007/9/6 – Greg) • Trust Investments to prepare a summary of the New Manager transition plan to PAC (2007/9/6 – Greg) • Prepare an Executive Memorandum for BP Canada’s Approval new BGI and Pyramis IMAs (2007/9/6 – Herb) • Continue close monitoring of SSgA strategies and performance and advise PAC (2007/9/6 – Herb / Greg) • Prepare an action plan and update PAC wrt implementation of CAPSA Governance Guidelines (2004/12/13 – Herb) • Prepare Castrol Plan SIPP (2005/12/15 – Herb) • Send out RFP to Asset Consultants for an Asset Liability Study in 2007 (2007/2/22 – Herb)

20. DB Plan Performance – As of 010/31/07 • Highlights • 2007-10 YTD Pension Fund total asset return is 3.41% vs the portfolio benchmark of 4.27%. • SSgA Portable Alpha Strategy has significantly under performed it benchmark by 6.6% YTD, reducing total return by 0.9% • Rebalanced $20 M from Canadian Equities into Fiera Fixed Income • $10 M from KBSH on Oct 22nd • $10 M from NTGA on Nov 1st

21. DB Plan PerformanceYTD as of 10/31/2007

22. DB SIPP Monitoring – As of 09/30/2007Quarterly Over / Under Benchmark Performance Over / Under Benchmark Performance: > than 1% negative performance for active and 0.2% for passive highlighted as < than 1% negative performance for active and 0.2% for passive highlighted as

23. DB - BP Canada Pension Master Trust As of 10/31/2007

24. DB Asset Balances as of 07/31/2007 534.0 530.9 488.4 449.6 403.7 378.0 342.1 297.2

25. DC Plan Performance – As of 10/31/2007 Total BP and Castrol DC Plan assets = $21.1 M

26. DC Verses DB Asset Mix -As of 09/30/07 DC Asset Mix DB Asset Mix

27. Castrol Investments Review As of 09/30/07

28. 2006 BP Canada Pension PlanCost Effectiveness Measurement Survey • Participated in the CEM Benchmarking Inc. Survey for the first time • Survey covered 97 Canadian Pension funds representing 70% of DB assets in Canada (51 were corporate plans) • Several statistics are of relevance from a Governance perspective • Operating Costs: • Going Concern Valuation Assumption for 2006 • BP Fund used 6.5% vs median of 6.3% (range is 6.8% at Q3 and 5.7% at Q1) • Additional charges will be made to the plan starting in 2007 for BP internal costs chargeable to the plan (estimated cost of 4 bps) * Incentive based: BGI @ 150 bps target alpha / Pyramis @ 200 bps targeted alpha Mandates to be Transitioned