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Lehman Brothers High Yield Conference Karen Twitchell Treasurer March 6, 2002

Lehman Brothers High Yield Conference Karen Twitchell Treasurer March 6, 2002. Safe Harbor Language.

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Lehman Brothers High Yield Conference Karen Twitchell Treasurer March 6, 2002

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  1. Lehman Brothers High Yield Conference Karen Twitchell TreasurerMarch 6, 2002

  2. Safe Harbor Language Statements in this presentation relating to matters that are not historical facts are forward-looking statements. These forward-looking statements are just predictions or expectations and are subject to risks and uncertainties. Actual results could differ materially, based on factors including but not limited to future global economic conditions, access to capital markets, industry production capacity and operating rates, technological developments, the supply demand balance for the products produced by the Company and its joint ventures, competitive products and pricing pressures, increases in raw material and/or energy costs, changes in governmental regulations and other risk factors. For more detailed information about the factors that could cause our actual results to differ materially, please refer to Lyondell Chemical Company's Annual Report on Form 10-K for the year ended December 31, 2000, Lyondell’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2001, as well as Lyondell’s Annual Report on Form 10-K for the year ended December 31, 2001 which will be filed in March 2002. Page 2

  3. Company Overview • Lyondell Chemical Company - Intermediate Chemicals and Derivatives • World’s leading producer of PO and derivatives • 100% Ownership • Equistar - Petrochemicals and Polymers • A leading North American producer of ethylene, propylene and polyethylene • Low cost position based on feedstock flexibility and scale • 41% Ownership • LCR - Refining • Unique capability to refine heavy crude oils • Contractually stable business; strong cash flow generator • 58.75% Ownership

  4. Businesses are Integrated and Costs Optimized Lyondell Methanol Co. Intermediate Chemicals & Derivatives Markets Methanol MTBE Propylene glycol / ethers Antifreeze / deicers Resins / solvents PO / TBA Equistar Propylene oxide Pharmaceutical Coatings Plastics Butanediol / derivatives Propylene PO / SM Polypropylene SM • Polyurethanes • Auto seating • Furniture • CASE TDI Ethylene Polyethylene • Consumer products • Grocery sacks • Toys • Packaging EO / EG LCR Polyester Antifreeze Benzene Automotive Toluene

  5. Leading Positions in All Key Products IC&D Equistar * Source: CMAI, LYO capacities as of 1/1/01

  6. Sustainable Advantages in Key Businesses • Petrochemicals – Low Cost Advantage • Feedstock flexibility historically provides 4 cpp variable cost advantage • Refining – Strong Cash Generation • Heavy Crude Processing Capability • Unique “Deemed Margin” Contract • Improved Reliability • IC&D – PO Cost and Technology Leadership • Proprietary Process Technology Leader • Global Production Base • Important Derivative Positions

  7. Portfolio Optimization • Petrochemicals • Idled Lake Charles • Polymers • Shut-Down Port Arthur • Expanded Matagorda & Victoria • IC&D • Exited ADI • Restructured Isocyanates • Sold Polyols • Constructing PO11 & BDO2

  8. Reduced Fixed Costs

  9. Reduced Working Capital Days of Working Capital 2001 Cash from Working Capital: LYO $128MM Equistar $282MM* * Includes elimination $130 million AR securitization

  10. Prudently Managing Assets Disciplined Capital Expenditures PO11 Spending ($,MM) ($MM)

  11. Minimal Near Term Debt Maturities Debt Maturity Schedule 1 1 – LYO Revolver Expires

  12. Significant Liquidity 1 1 1 – excludes amounts committed against letters of credit at December 31, 2001

  13. Debt Reduction Still a Priority Total Lyondell Debt $3.1 B reduction

  14. Equistar Transactions • Lyondell Sells Package of Securities to Occidental • 30 – 34 million shares of Series B stock • 5 million, 5 year $25 warrants • Payments equivalent to 7.38% of ’02 & ’03 Equistar distributions up to $35 million • Lyondell buys Occidental’s 29.5% share of Equistar

  15. Impact of Occidental Transactions on Lyondell Cash Flow • 1) Securities & contingent value payments all PIK • cash preservation in trough 2) Significantly increased access to Equistar cash flows • potential accelerated debt reduction as business conditions improve

  16. Investment Highlights • Leading positions in all key products • Low cost producer • Vertically integrated and strategically linked with affiliates • Significant liquidity • Increased leverage to the ethylene cycle • Experienced management team • Commitment to debt reduction

  17. Lehman Brothers High Yield Conference Karen Twitchell TreasurerMarch 6, 2002

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