Solid Strategy, Confident Execution Morgan Stanley Global Chemical Conference February 13, 2003 Dan Smith President and CEO

1
Solid Strategy, Confident ExecutionMorgan
StanleyGlobal Chemical ConferenceFebruary 13,
2003Dan SmithPresident and CEO

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 the cyclical
nature of the chemical and refining industries
availability, cost and volatility of raw
materials and utilities governmental regulatory
actions and political unrest global economic
conditions industry production capacity and
operating rates the supply/demand balance for
Lyondell's and its joint ventures' products
competitive products and pricing pressures
access to capital markets and technological
developments 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 Companys
Annual Report on Form 10-K for the year ended
December 31, 2001, Lyondells Quarterly Report on
Form 10-Q for the quarter ended September 30,
2002 and Lyondells Annual Report on Form 10-K
for the year ended December 31, 2002, which will
be filed in March 2003.
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Company Overview

• Lyondell Chemical Company - Intermediate
  Chemicals and Derivatives (ICD)
• A leading global producer of PO and derivatives
• Process technology strength
• Equistar - Petrochemicals and Polymers
• A leading North American producer of ethylene,
  propylene and polyethylene
• Low cost position based on feedstock flexibility
  and scale
• LCR - Refining
• Unique capability to refine heavy crude oils
• Contractually stable business strong cash flow
  generator

2002
( MM)
LyondellOwnership
Revenues
EBITDA
ICD
3,262
410
100.0
Equistar
5,537
256
70.5
LCR
3,392
362
58.75
4
Lyondell Has Built a Balanced Portfolio
5
The Recent Years Have Been a Period of
Optimization

• Mid 1990s
• Formation years
• LCR Contract and JV
• Equistar JV
• ICD Acquisition

• 1999-2002
• Position and Optimize
• Portfolio Adjustments
• Capacity Rationalization
• Project Reorientation
• Organization Effectiveness
• Best practices
• Organization design

6
A Firm Foundation Has Been Established

• 2.5B Revenue
• Divestitures - Specialties, polyols
• Acquisitions - Oxy transaction
• 2Blbs of Capacity
• Olefins, Polyethylene
• Reinitiate ICD projects
• Cancel/Delay Equistar projects
• Infrastructure Enhanced
• Synergies - 300MM

• Portfolio Adjustments
• Capacity Rationalization
• Project Reorientation
• Organization Effectiveness

7
Processes and Systems Have Steadily Improved the
Capital Utilization Within the Enterprise
Days of Working Capital
Capital Spending
MM
1999
2002
8
A Snapshot of Operating Metrics Highlights the
Success
Improvement
Quality
Safety
Downtime
Environment
1998 to 2002
9
A Brief Portfolio Review

• ICD
• LCR
• Equistar

10
Our Propylene Oxide and Derivatives Business
(ICD) Benefits from a Strong Position and a
Stable Industry Structure
Lyondell PO Capacity
Lyondell 55
Source LYO databook and SRI
11
PO Technology is Entering its Third Generation of
Innovation
1st Generation 2nd Generation 3rd
Generation Technology Chlorohydrin Peroxidation D
irect Oxidation Initial Application 1910 1960/70s
2000/10 Key Producers Dow POSM - Lyondell,
Shell China (several) POTBA -
Lyondell PO/Cumene - Sumitomo/ Lyondell
JV Development Efforts PO/H2O2 - Dow/BASF
Lyondell
12
LCR Important Cash Generator
Operating Reliability and Crude Deliveries Drive
Performance
MB/day
MM
1
1 4Q01 Scheduled maintenance turnaround
13
Equistar is a Leading Ethylene Producer
Top 5 North America
65
Nova 8

• 2 in North America
• 3 in world
• Leader in industry consolidation
• Competitive position based on feedstock
  flexibility

ChevronPhillips11
40
ExxonMobil12
Exxon 7
Union Carbide7
Equistar15
Nova8
Dow9
Dow/Carbide19
Shell9
Source CMAI
14
Commodity Exposure Drives Cash Flow
1 100 Basis for Equistar 2 Net of minority
equity interests Note EPS calculations assume
common shares outstanding of 160 million
15
Significant Cash and Earnings Generation in
Up-Cycle
Cycle EBITDA Potential
(MM)
1.35/share
1 1988/1995 Chem Data/CMAI margins for Ethylene,
Polyethylene and Styrene applied to current
capacities and ownership Note Assumes current
capital structure 160MM shares
16
N. American Supply/Demand Imbalance is
Differential to Global Situation
Ethylene Supply/Demand Balance - North America
130
Effective Operating Rate
World

120
100
110
100
90
N. America
90
Eff. Operating Rate
Bln lbs
80
80
Demand
70
Nameplate Capacity
60
70
50
40
60
1994
1996
1998
2000
2002
2004
2006
2008
2010
Source CMAI/Equistar
17
Effective Ethylene Operating Rates Move Toward
95 Early in 2003
U.S. Ethylene Supply/Demand Quarterly - 2002 gt
2004
CMAI-2/03
18
Asia Will Represent 40-60 of Global Demand
Growth for Chemicals and Plastics
Source CMAI for PE and SM, LYO estimates for PO
19
Demand is Largely a Function of a Nations
Standard of Living and Population
US
Singapore
Taiwan
Korea
WE
Japan
Malaysia
Thailand
China
India
Indonesia
Source CMAI 2001
20
Polyethylene Demand Illustrates the Shifting
Demand Trends Within Asia
21
Asia is the Most Economic Destination for Middle
East Ethylene Derivatives
Delivered to China
Delivered to U.S.
Source Chem Systems/Lyondell
22
As Such, Asia is the Natural Market for Middle
East Production
Announced Capacity Additions
Probable Delay
Asia Demand Increase (6/yr)
23
Success in Asia Demands a Strategy That Addresses
the Regions Diverse Characteristics

• Distance between markets
• Wide ranging economic/political/social climates
• Many producer and varying motivations
• Hydrocarbon resources

24
Our Core Beliefs Guide Our Approach to the Asian
Market

• PO Chain
• Current presence
• US and European Export
• Nihon Oxirane JV
• C2 Chain
• Not differential

25
Our Financial Strategy is Unchanged

• Maintain Sufficient Liquidity
• Repay Debt

26
We Have Maintained Significant Liquidity
1
1
1 does not include 12/31 amounts committed
against letters of credit (LYO-48MM,
Equ-16MM)
27
Cash Flow Has Supported the Interest and Dividend
Requirements
Average 3 Month Cash Flow After Capex
Pre-Trough
Trough
Qtrly. Int. Expense
Equistar
Qtrly. Int. Expense Dividends
ICD Plus JV Distributions
28
We Have Actively Managed Our Maturity Profile
Debt Maturities
Pre-Payable Debt
(MM)
(MM)
2
1
1. LYO Revolver matures 2. Equ Revolver matures
Note does not include any pre-payable debt with
make-whole.
29
De-leveraging Will Benefit All Stakeholders

• Impact of Lyondell debt reduction at constant
  capitalization1
• Debt Reduction
• 1B 2B
• Debt to capitalization 54 36
• Avoided interest expense 100MM/Yr 200MM/Yr
• Earnings improvement 40/share 80/share
• Share price improvement at
• constant capitalization 6/share 12/share

1 Capitalization debt book value of equity
minority interest