Solid Strategy, Confident Execution

14th Annual Smith Barney Chemical Conference

December 2, 2003

Dan F. 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 Company’s Annual Report on Form 10-K for the year ended December 31, 2002, filed in March 2003, and Lyondell’s Quarterly Report on Form 10-Q, which was filed in November 2003. Reconciliations of GAAP financial measures to non-GAAP financial measures are provided at the end of this presentation.

3

Lyondell Has Built a Balanced Portfolio

Lyondell

IC&D

LCR

Equistar

Commodity Leverage-- A leading North American producer of ethylene, propylene

and polyethylene-- Low cost position based on feedstock flexibility and scale

Growth & International Presence-- A leading global producer of PO and derivatives-- Process technology strength

Cash Generation-- Unique capability to refine heavy crude oils-- Contractually stable business; strong cash flow generator

($ MM)

Revenues EBITDALyondell

OwnershipIC&D $3,262 $410 100.0%Equistar 5,537 256 70.5LCR 3,392 362 58.75

2002

4

Significant Integration Exists Among the Operating Entities and With Our Partners

5

Leading Product Positions Create Significant Earnings Leverage

1 Source: LYO capacities as of Jan 2003, CMAI2 Includes 1.5 billion pounds that represents Bayer’s share under the PO Joint Venture and 385 million pounds or

100% of the capacity of Nihon Oxirane3 Does not include refinery-grade material or production from the product flexibility unit at Equistar’s Channelview

facility.4 Based on 1¢/gal change

Inte

rmed

iate

C

hem

ica

ls a

nd

D

eriv

ati

ves

Eq

uis

tar

Product Annual Capacity 1Capacity Position

Propylene Oxide2 (lbs) 3.9 billion 1st in North America2nd in the world

Styrene Monomer (lbs) 3.7 billion 1st in North America3rd in the world

MTBE (bbl/day) 58,500 1st in North America1st in the world

Ethylene (lbs) 11.6 billion 2nd in North America5th in the world

Propylene (lbs) 5.0 billion 2nd in North America6 th in the world

Polyethylene (lbs) 5.7 billion 3 rd in North America4 th in the world

1

3

$20MM

$14MM

$ 94MM

$116MM

$50MM

$57MM

Pre-TaxLeverage(∆1¢/unit)

6

Lyondell and Equistar Products Serve a Broad Mix of End Users

Bldg & Const

Consumer

Electronics

Other

Transportation

Packaging

Textiles/Furnishings

Bldg & Const

ConsumerPackaging

Textiles/ Furnishings

Electronics

Other

Transportation

PROPYLENE OXIDEETHYLENE

7

0

1

2

3

4

5

1986 1989 1992 1995 1998 2001 2004 2007

There is a Growing Consensus that the Global Economy is Emerging from a Difficult Period

(Percent change in real GDP)Global GDP

Source: Global Insights

8

The US Economy is Beginning to Benefit from Economic Stimulus

    Δ GDP  

  Leads to After  

Stimulus Change 1 Year 2 Years

 

Fed Rate Reduction 100 BP 0.6 1.7

 

Real Dollar Decline 10% 0.4 1.6

 

Income Tax Reduction 1% of GDP 0.4 0.8

 

Stock Price Increase 20% 0.4 0.8

 

Oil Price Decline $10/bbl 0.2 0.4

       

* Source: Fed Reserve, Jan. 1999

9

A Brief Portfolio Review

IC&D

– Propylene Oxide (PO) and Derivatives

– Styrene

– MTBE

LCR

– Gasoline

– Heating oil

– Jet fuel

Equistar

– Ethylene

– Polyethylene

10

The PO Industry Has Absorbed a Period of Capacity Additions

Source: SRI / Lyondell

0.0

2.5

5.0

7.5

10.0

12.5

15.0

17.5

20.0

22.5

25.0

1992 1994 1996 1998 2000 2002 2004 2006 2008 2010

Bln

lbs

50%

55%

60%

65%

70%

75%

80%

85%

90%

95%

100%

Ope

ratin

g R

ate

Lyondell/Partners Dow Shell/BASF Rest of World

Nam

epla

te C

apac

ity

Effective Operating Rate(96% On Stream Time)

Demand at 4.4%

11

Global Styrene Supply/Demand Balances Are Relatively Tight

Source: CMAI 2003 World Styrene Analysis

20

30

40

50

60

70

80

90

100

1998 2000 2002 2004 2006 2008

Ca

pa

cit

y (

Bil

lio

ns

Po

un

ds

)

60%

65%

70%

75%

80%

85%

90%

95%

100%

Op

erat

ing

Rat

e (%

)

92% Rate

Demand at 4.5% Growth

12

600

500

400

300

200

100

MTBE is a Source of Premium Clean Octane to the 19-20 MMB/D Global Gasoline Market

Global Supply/Demand US Market Balance

MB/D

CA

U.S.

Non-U.S.

CARefinery/Olefins

U.S.Dehydro

DehydroNon -US

PO

2002DEMAND

2002CAPACITY

2002DEMAND

2002SUPPLY

Refinery/Olefins

U.S.

Imports

U.S.Dehydro

PO

Source : Dewitt

2004 Est. Demand

13

Component Premiums Above Gasoline

0

10

20

30

40

50

60

J ul '0

1

Sep '0

1

Nov '0

1

J an '0

2

Mar '

02

May

'02

J ul '0

2

Sep '0

2

Nov '0

2

J an '0

3

Mar '

03

May

'03

J ul '0

3

Sep '0

3

Pre

miu

m a

bo

ve

Ga

so

lin

e (

¢/g

al)

MTBE

Alkylate

Source: Platts

14

600

500

400

300

200

100

Steps Toward Increased IC&D Cash Flow

Complete PO-11

Capital Spend

Convert PO/SM

Purchases onProduction

1999PO / TDI

SMMargins

MTBEResolution

Sell-out at 1995PO / TDI / SM Margins

Potential Cash Improvement

From 1st Half, 2003 *

$ MM/Yr

* 1st Half EBITDA

Annualized = $200MM

1st Half

15

LCR Important Cash Generator -- Operating Reliability and Crude Deliveries Drive Performance

1 4Q01: Scheduled maintenance turnaround2 1Q03: Includes a $25MM write-off

0

50

100

150

200

250

300

1Q00 2Q00 3Q00 4Q00 1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03

0

20

40

60

80

100

120

140CSA Spot Mkt EBITDA

MB/day $MM

21

Net Distribution To LYO, $MM 33 (7) 16 76 20 24 59 17 2 22 49 7 67 68 55

16

Equistar is a Leading Ethylene Producer

#2 in North America

Competitive position based on feedstock flexibility

1991 2002

Top 5 North America

Shell9%

Dow9%

Equistar15%Nova

8%

Union Carbide7%

Exxon7%

Dow/Carbide20%

ExxonMobil13%

ChevronPhillips10%

Nova 8%

40%

66%

Source: CMAI

17

North American Supply/Demand Balance Is On Track To Improve Significantly

30

40

50

60

70

80

90

100

110

120

1994 1996 1998 2000 2002 2004 2006

Bil

lio

n P

ou

nd

s

60%

70%

80%

90%

100%

Op

erat

ing

Rat

e

Ethylene Supply/Demand Balance – North America

Source: CMAI / Equistar (September/2003)

Nam

epla

te C

apac

ity

N. American Effective Operating Rate(96% On-Stream Time)

N. America Demand

Rest of World

N. America

18

We Believe that Global Ethylene Supply/Demand is on a Path to a Tight Balance

175

200

225

250

275

300

2003 2007 '07 + 2% Growth '07 - 18 Mo Delay

Wo

rld

Eth

yle

ne

Su

pp

ly -

De

ma

nd

(billio

n p

ou

nd

s/y

ear)

Effective Capacity Demand

Source: CMAI

SensitivityCMAI base case

19

0

20

40

60

80

100

120

0 5, 000 10, 000 15, 000 20, 000 25, 000 30, 000 35, 000 40, 000

US

Korea

Taiwan

WE

Singapore

Japan

Thailand

Malaysia

ChinaIndiaIndonesia

The Emergence of a Middle Class Increases Local Demand for Plastics

Sources: CMAI 2001; Nexant Chemsystems

0

2

4

6

8

10

12

Domestic Exports

1995 2001

China PE Demand

Domestic vs. Export

PE Consumption/capita, lbs

2000 GDP/Capita

20

The Most Recent CMAI US Demand Forecast Departs from the Historic Trend Line

Quarterly U.S. Ethylene Demand vs. GDP

4

6

8

10

12

14

16

18

20

3.0 5.0 7.0 9.0 11.0 13.0

GDP - Trillion $ (constant 1996 $'s)

NPRA Quarterly Demand

CMAI Based Forecast

30-Year Trendline

2010

1970

2003

Source: SRI, CMAI, NPRA, US Govn.

Qu

arte

rly

Eth

ylen

e D

eman

d

(B

l. L

bs)

21

Ethane - Light Naphtha Cost of Ethylene Spread

0

1

2

3

4

5

6

7

19

87

19

88

19

89

19

90

19

91

19

92

19

93

19

94

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

¢/lb

eth

yle

ne Average

Liquid Cracking Variable Cost Advantage vs. NGL

Source: ChemData

Equistar Capability

NGL

37%

Liquid

63%

N. American Industry

(ex. Equistar)

NGL

78%

Liquid

22%

Liquid Cracking Provides an Advantage vs. Ethane Raw Materials

Source: CMAI and Lyondell

20

03

YT

D

22

Growing Global Demand will Increasingly be Supplied by Gas Based Raw Materials

0

20

40

60

80

100

120

140

Heavy Liquid NGL Based Demand Olefins Plant Supply

Global Ethylene Supply

by Feed Type

Global Propylene

Growth

Current (2003) Additions (2008)

Eth

ylen

e S

uppl

y –

Hea

vy v

s Li

ght

(bill

ion

poun

ds /

year

)

Propylene (Blb/yrs)

Source: CMAI

23

40

60

80

100

120

140

160

180

200

PG Styrene HDPE

Relative Raw Material Margin Range, 1994-2002100 = Period Average

•PG: U.S. Industrial Grade Propylene Glycol minus 0.63 x Chem Grade Propylene, both as reported by Chem Data•Styrene: US Net Industry Average Styrene Price minus 0.28 x North America ethylene Net Transaction Price, minus 0.105 x North America Contract Benzene, all as reported by CMAI•HDPE: North America HDPE Domestic Market Contract Injection Molding price - Ethylene product cash cost (Weighted Average Feed) as reported by CMAI

The Chemical Product Chains All Offer Upside in a Recovery

24

Enterprise Earnings Capability Far Exceeds Recent Trough Results

0

500

1000

1500

2000

2500

3000

2002 1999/2000Margins

1995Margins

1988Margins

$MM

LCR IC&D Equistar1 Chem Data/CMAI industry margins conditions for IC&D and Equistar products (ex. MTBE) applied to current capacities and ownership, LCR 2002 EBITDA, includes PO-11 capacity.

Note: Assumes current capital structure; 175MM shares.

1 1 1

Recession/ Trough

Pre-Recession

PeakCycle EBITDA Potential

$6.30 / share

$1.40 / share

2002 Proportional Interest,

Dividends & Capital

25

Our Financial Strategy is Focused and Unchanged

Maintain Sufficient Liquidity

Repay Debt

26

We Have Maintained Significant Liquidity

1 – represents the undrawn balances and has not been reduced by amounts committed against letters of credit:

(12/30/02: LYO-$49MM, Equ-$16MM)

(9/30/03: LYO-$53MM, Equ-$17MM)

$453MM$743MM $477MM$680MM Total Liquidity

$325MM$350MM $450MM$350MMRevolver 1

$128MM$393MM $27MM $330MMCash & ST Investments

EquistarLyondell Equistar Lyondell

9/30/200312/31/2002

27

We Have Actively Managed Our Maturity Profile

Debt Maturities(1),(2) Pre-Payable Debt(3)

(1) Lyondell: $350MM Revolving Credit Facility expires in 2005 (not included); does not include $100MM Receivables Purchase Program

(2) Equistar: Does not include $250MM Inventory Revolving Credit Facility or $450MM Receivables Purchase Program; includes $98MM GE Railcar Lease, which expires during fourth quarter 2004.

(3) Debt with make-whole provisions are shown at maturity, including the $900MM Senior Secured Notes Series A due 2007 (Lyondell), the $700MM Senior Notes due 2008 (Equistar) and the $600MM Senior Unsecured Notes due 2009 (Equistar).

28

1 Capitalization = debt + book value of equity + minority interest Based on 175 MM shares outstanding

De-leveraging Will Benefit All Stakeholders

Impact of Lyondell debt reduction at constant capitalization1:

Debt Reduction

$2B

Debt to capitalization 35%

Avoided interest expense $200MM/Yr

Earnings improvement 75¢/share

Share price improvement atconstant capitalization $11.50/share

29

Six Months

Ended

June 30,

2003 2002 2001

Lyondell net loss (181)$ (148)$ (150)$ Add: Benefit from income tax (94) (58) (76)

Interest expense, net 182 373 369 Depreciation and amortization 118 244 254 Loss from equity investment in Equistar 132 117 77 Income from equity investment in LCR (56) (135) (129) Loss from other equity investments - 5 12 Restructuring charges (credits) (a) - (3) 63 Extraordinary loss on early retirement of debt, net of tax - 15 5

Lyondell EBITDA excluding restructuring charges (credits) (b) 101$ 410$ 425$

Equistar net loss (195)$ (1,299)$ (283)$ Add: Cumulative effect of accounting change - 1,053 -

Depreciation and amortization 154 298 319 Interest expense, net 102 204 189 Facility closing costs (c) - - 22 Extraordinary loss on early retirement of debt, net of tax - - 3

Equistar EBITDA 61$ 256$ 250$

Proportionate Share - % varies (d) 43$ 122$ 103$

LCR net income 86$ 213$ 203$ Add: Depreciation and amortization 57 116 108

Interest expense, net 19 32 51 Extraordinary loss on early retirement of debt - 1 2

LCR EBITDA 162$ 362$ 364$

Proportionate Share - 58.75% 95$ 213$ 214$

Lyondell and Proportionate Share of Equity Investments - EBITDA Lyondell EBITDA excluding restructuring charges (credits) 101$ 410$ 425$ Lyondell share of Equistar EBITDA (d) 43 122 103 58.75% of LCR EBITDA 95 213 214 75% of LMC EBITDA through April 30, 2002 - (3) (3)

Lyondell and Proportionate Share of Equity Investments 239$ 742$ 738$

________

(a) Restructuring charges (credits) related to shutdow n of Lyondell's ADI business.

(b) Annualized EBITDA for the six months ended June 30, 2003 is approximately $200 million.

For the twelve months ended

December 31,

Lyondell Chemical CompanyReconciliation of Net Income (Loss) to EBITDA

(Millions of dollars)

30

1Q 2000 2Q 2000 3Q 2000 4Q 2000 1Q 2001 2Q 2001 3Q 2001 (a) 4Q 2001 Q1 2002 Q2 2002 Q3 2002 Q4 2002 (b) Q1 2003 Q2 2003 Q3 2003

Net income (loss) 22$ (22)$ 66$ 62$ 42$ 66$ 78$ 17$ 41$ 63$ 50$ 59$ 28$ 58$ 69$

Add: Depreciation and amortization 26 30 28 28 28 27 26 27 29 30 28 29 28 29 28

Interest expense, net 12 16 16 17 16 15 10 10 8 7 8 9 10 9 8

LCR EBITDA 60$ 24$ 110$ 107$ 86$ 108$ 114$ 54$ 78$ 100$ 86$ 97$ 66$ 96$ 105$

________(a) EBITDA for LCR for the three months ended September 30, 2001 was originally reported as $116 million and was restated to include extraordinary charges

related to early debt retirement, currently reflected in other expense, net.

(b) EBITDA for the three months ended December 31, 2002 was originally reported as $98 million and was restated to include extraordinary charges related to early debt retirement, currently reflected in other expense, net.

Lyondell Chemical CompanyReconciliation of LCR Net Income (Loss) to EBITDA

(Millions of dollars)

31

Lyondell IC&DInterest expense 384$ Capital expenditures (a) 22 Dividends 109

Total 515$

Equistar Interest expense 205 Capital expenditures 118

Total 323$

Proportionate Share - 70.5% (b) 228$

LCRInterest expense 32 Capital expenditures 65

Total 97$

Proportionate Share - 58.75% 57$

Lyondell and Proportionate Share of Equity Investments - Interest, Capital Expenditures and DividendsLyondell IC&D 515$ Lyondell share of Equistar (b) 228 58.75% of LCR 57 Lyondell and Proportionate Share of Equity Investments

Interest, Capital Expenditures and Dividends 800$

________(a) Excludes contributions to PO-11 and U.S. PO joint ventures.

(b) For purposes of this presentation, Lyondell's proportionate interest in Equistar is reflected at its current ownership interest of 70.5% and not at its historical ownership interest.

For the Twelve Months ended December 31, 2002

Lyondell Chemical CompanyReconciliation of Lyondell and Proportionate Share of Ventures'

(Millions of dollars)

Interest, Capital Expenditures and Dividends