1. The Internal Gas Market: Achievements and Challenges Ahead Thomas C. Briggs Vice President for Regulatory Affairs, BP Gas & Power Athens November 4, 2005

2. Achievements Enactment of new German Energy legislation Progress with Entry/Exit transport schemes TSO unbundling NBP/Zeebrugge trading activities demonstrate the increased interdependency of pan European markets. Increasingly, market players regard Europe as an interconnected web without borders, rather than discrete Member State markets.

3. Challenges The scope and scale of trading webs must not be limited by implementation of restrictive entry exit regimes. Onerous terms and conditions of access, particularly balancing provisions, must be addressed. Legacy Transit agreements may inhibit development of the internal market Public service obligations, particularly supply security obligations, must be narrowly designed to avoid undue interference with pan-European trade.

4. Common Obstacle Effective TSO unbundling is critical. Unless and until the TSO operates as an entity focused solely on increasing transportation efficiency, access problems will not be resolved. Divestiture is not required.