Solid Strategy, Confident Execution

Lehman Brothers Conference March 23, 2004

Karen TwitchellVice President and Treasurer

2

Safe Harbor LanguageStatements 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, 2003, filed in March 2004. 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 $3,801 $245 100.0%Equistar 6,545 175 70.5LCR 4,162 377 58.75

2003

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 January 2004, CMAI2 Includes 100% of joint venture volumes3 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(1)

Capacity Position

Propylene Oxide(2)

( lbs) 4.5 billion 1st in North America1 st in the world

Styrene Monomer (lbs) 5.0 billion 1st in North America4th 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 America7 th in the world

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

(1)

(3)

$23MM

$21MM

$ 9MM

$116MM

$50MM

$57MM

Pre-TaxLeverage(∆1¢/unit)

(4)

6

We’ve Significantly Strengthened Our Operations

0

30

60

90

120

150

180

Lyondell Equistar PO11 Spending Regulatory

4.2%

9.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

LYO+EQU Peers

SG

&A

+ R

&D

, %S

ale

s

0102030405060708090

1998 2003

Lyondell Equistar

Safety PerformanceEnterprise Incident Rate

Days of Working Capital *Capital Spending

Average SG&A and R&D, % Sales 2000 - 2002

1999 2004 Budget

$MM

Re

co

rda

ble

In

jury

Ra

te

1st Quartile ’02 1.001.180.99

0.8

0.52 0.52

0

0.5

1

1.5

2

1999 2000 2001 2002 2003

Days

* Based on accounts receivable (including those sold), inventories & accounts payable as of 12/03, and fourth-quarter days of sales.

Peers include:

Dow, Nova,

Eastman, Celanese,

Solutia, Westlake,

Millennium, Georgia Gulf

7

Lyondell and Equistar Products Serve a Broad Mix of End Users

Bldg & Const

Consumer

Electronics

Other

Transportation

Packaging

Textiles/Furnishings

Bldg & Const

Consumer

Packaging

Textiles/ Furnishings

Electronics

Other

Transportation

PROPYLENE OXIDEETHYLENE

8

Growth in the World Economy Revives

-2-1

012

34

56

1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Real GDP Industrial Production

(Percent change)

Source: 2004 Global Insight, Inc.

9

A Brief Portfolio Review

IC&D

– Propylene Oxide (PO) and Derivatives

– Styrene

– MTBE

LCR

– Gasoline

– Heating oil

– Jet fuel

Equistar

– Ethylene

– Polyethylene

10

PO Industry Capacity Lyondell PO & Derivatives

Other

LYO/Bayer/Sumitomo

Shell/BASF

Dow

PG

BDO

Merchant PO

Deicers

PO Solvents

Our Propylene Oxide and Derivatives Business (IC&D) Benefits from a Strong Position

Product Capacity Position

Market Growth

Merchant PO 1

PG 2 Moderate

BDO 2 High

P-Solvents 2 Low

Deicers 1 Low

PO 4-5%/yr

Source: LYO databook and SRI Post PO-11 Project

Durables- Furniture

- Automotive

- Construction

- Boating

- Electronics

Non-Durables- Coatings/Adhesives

- Personal Care

- Spandex

- Aircraft DeIcing

PO End Uses

11

There Are Very Few Future Propylene Oxide 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 201050%

55%

60%

65%

70%

75%

80%

85%

90%

95%

100%

Nam

epla

te C

apac

ity

Effective Operating Rate(96% On Stream Time)

Demand at 4.4% growth

12

The Lyondell Enterprise Has A Well Established Presence in Asia

Presence established in 1972

40% interest in Nihon Oxirane

$1 B revenue 1

2.5 – 3.0 B lbs of sales 1

Leading PO and derivative positions

Strong styrene relationships

1 Includes 100% of Nihon Oxirane

BeijingTokyo

Shanghai

Taipei

Hong Kong

Guangzhou

Offices

Inventory

Point

Manufacturing

13

There are Three Principle Propylene Oxide Technologies. Lyondell Practices Two Co-Product Technologies

Technology Principle Participants

PO & Styrene (POSM) Lyondell, Shell

PO & MTBE (PO / MTBE) Lyondell, Huntsman

Chlorine Based Dow, Asian Plants

14

The North American MTBE Industry Has Been Adjusting To The Regulatory Changes

2002 VS. Q1 2004

M B/D

U.S. Demand (130)

U.S. Supply / Capacity

-- U.S. Dehydro Capacity (70)

-- Refinery / Olefins Capacity (20)

-- Import / Export (40)

(130)

Source: EIA, Lyondell Estimates

15

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 2003

$ MM/Yr

Base

16

LYONDELL-CITGO Refining Performance Is Structured To Be Independent of Crude Oil Costs and Refining Margins

JV with CITGO CITGO 100% owned by PDVSA

268 M B/D Heavy Crude Refinery located in Houston 230 M B/D contract with PDVSA

Deemed Margin Crude Price Based on Product Price Less Cost Formula

Balance of Crude Processed at Market Conditions

Net Cash Distribution to Lyondell

2003: $223 MM

2002: $ 80 MM

2001: $120 MM

17

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 4Q03

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 69 55 32

18

Equistar is a Leading Ethylene Producer

#2 in North America

Competitive position based on feedstock flexibility

1991 2003

Top 5 North America

Shell9%

Dow9%

Equistar15%Nova

8%

Union Carbide7%

Exxon7%

Dow/Carbide18%

ExxonMobil13%

ChevronPhillips10%

Nova 8%

40%

64%

Source: CMAI

19

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

20

12000

14000

16000

18000

20000

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Mill

ion

s C

apac

ity L

bs

70

75

80

85

90

95

100

Op

erat

ing

Rat

e, %

Effective Capacity Downtime Operating Rate

Effective Ethylene Operating Rates Are Forecast To Be In The Low To Mid 90% Range

U.S. Ethylene Supply/Demand

CMAI-2/04

2002 20032002 2003 2004

21

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

22

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

96%104%

99%

23

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

75%

Liquid

25%

Liquid Cracking Provides an Advantage vs. Ethane Raw Materials

Source: CMAI and Lyondell

20

03

24

In Summary, The Business Areas Are Positioned For Significant Improvement

Global Economy Turning Positive

Crude Oil and Natural Gas High But Vulnerable To A Fall

Significant Volumetric Leverage

Tightening Supply/Demand Outlook In Key Products

Differential Positions In Key Products

– POSM Technology

– Liquid Crackers

25

Enterprise Earnings Capability Far Exceeds Recent Trough Results

0

500

1000

1500

2000

2500

3000

2003 1999/2000Margins

1995 Margins 1988 Margins

$MM

LCR IC&D Equistar

1 Chem Data/CMAI industry margins conditions for IC&D and Equistar products (ex. MTBE) applied to current capacities and ownership, LCR 2003 EBITDA

1

1 1

Recession/ Trough

Pre-Recession

PeakCycle EBITDA Potential

2003Proportional

Interest,Dividends &

Capital

26

Our Financial Strategy is Focused and Unchanged

Maintain Sufficient Liquidity

Repay Debt

27

We Have Maintained Significant Liquidity

$632MM$738MM $461MM$631MM Total Liquidity

$433MM$300MM $434MM$301MMFacility Avails

$199MM$438MM $27MM $330MMCash & ST Investments

EquistarLyondell Equistar Lyondell

12/31/200312/31/2002

28

We Have Actively Managed Our Maturity Profile

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

(1) Lyondell: Does not include $350MM Revolving Credit Facility, which expires in 2005, or $100MM Receivables Purchase Program

(2) Equistar: Does not include $250MM Inventory Revolving Credit Facility or $450MM Receivables Purchase Program

(3) Prepayable debt is shown for the first year in which it is callable. Debt with make-whole provisions is shown at maturity, including the $900MM Senior Secured Notes Series A due 2007 (Lyondell) and the $700MM Senior Notes due 2008 (Equistar)

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2003 2004 2005 2006 2007 2008

($MM)

Lyondell Equistar

29

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

30

Lyondell net loss (302)$ Add: Benefit from income tax (179)

Interest expense, net 392 Depreciation and amortization 250 Loss from equity investment in Equistar 228 Income from equity investment in LCR (144)

Lyondell EBITDA 245$

Equistar net loss (339)$ Add: Depreciation and amortization 307

Interest expense, net 207

Equistar EBITDA 175$

Proportionate Share - 70.5% 123$

LCR net income 228$ Add: Depreciation and amortization 113

Interest expense, net 36

LCR EBITDA 377$

Proportionate Share - 58.75% 222$

Lyondell and Proportionate Share of Equity Investments - EBITDA Lyondell EBITDA 245$ 70.5% of Equistar EBITDA 123 58.75% of LCR EBITDA 222

Lyondell and Proportionate Share of Equity Investments 590$

LYONDELL CHEMICAL COMPANYRECONCILIATION OF NET INCOME (LOSS) TO EBITDA

(Millions of dollars)For the Twelve Months Ended December 31, 2003

31

Lyondell IC&DInterest expense, net 392$ Capital expenditures (a) 50 Dividends 116

Total 558$

Equistar Interest expense, net 207 Capital expenditures 106

Total 313$

Proportionate Share - 70.5% 221$

LCRInterest expense, net 36 Capital expenditures 46

Total 82$

Proportionate Share - 58.75% 48$

Lyondell and Proportionate Share of Equity Investments - Interest, Capital Expenditures and DividendsLyondell IC&D 558$ 75% of Equistar 221 58.75% of LCR 48 Lyondell and Proportionate Share of Equity Investments

Interest, Capital Expenditures and Dividends 827$

________(a) Excludes contributions to PO-11 and U.S. PO joint ventures and the purchase of the BDO-2 facility.

Lyondell Chemical Company

(Millions of dollars)For the Twelve Months Ended December 31, 2003

Reconciliation of Lyondell and Proportionate Share of Ventures' Interest, Capital Expenditures and Dividends

32

Dec. 31, 1998 * Dec. 31, 2003

Lyondell Equistar Lyondell Equistar

Working Capital: (a)

Accounts receivable (b) 479$ 522$ 449$ 608$

Inventories 550 549 347 408

Accounts payable (310) (337) (431) (513)

Total 719 734 365 503

Add: Accounts receivable sold (c) 160 130 75 102

Adjusted working capital 879$ 864$ 440$ 605$

Days of Working Capital:

Fourth Quarter Sales Revenue 872$ 1,141$ 945$ 1,665$

Days in Quarter 92 92 92 92

Sales per day 9.5$ 12.4$ 10.3$ 18.1$

Days of working capital (b) (d) 93 70 43 33

(a) Defined as the major controllable components of working capital - receivables, inventories and payables. (b) In consideration of discounts offered to certain customers for early payment for product delivered in December 2003, some

receivable amounts were collected in December 2003 that otherwise would have been expected to be collected in January 2004, including $41 million from Occidental. Had such amounts been collected in January 2004, days of working capitalwould have been 36 days.

(c) Receivables sold are added back for consistency as such amounts are included in sales and in the sales per day calculation. Management believes that this provides useful information to investors because it reflects Lyondell's and Equistar's responsibility for administration and collection of said amounts.

(d) Days of working capital are calculated as adjusted working capital divided by sales per day.

Days of Working CapitalReconciliation

Dollars in Millions

33

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 Q4 2003

Net income (loss) 22$ (22)$ 66$ 62$ 42$ 66$ 78$ 17$ 41$ 63$ 50$ 59$ 28$ 58$ 69$ 73$

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

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

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

________(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.

1Q 2000 2Q 2000 3Q 2000 4Q 2000 1Q 2001 2Q 2001 3Q 2001 4Q 2001 Q1 2002 Q2 2002 Q3 2002 Q4 2002 Q1 2003 Q2 2003 Q3 2003 Q4 2003

Investment in LCR at beginning of quarter 52$ 35$ 32$ 58$ 20$ 27$ 44$ 33$ 29$ 54$ 71$ 54$ 68$ 20$ 1$ (14)$

Add: Equity in income (loss) of LCR 16 (10) 42 38 27 41 48 13 27 39 32 37 19 37 43 45

Other comprehensive loss due to minimum pension liability - - - - - - - - - - - (16) - - - 4

Accrued interest converted to capital - - - - - - - - - - - - - 10 - -

Contribution payable to LCR - - - - - - - - - - - - - 3 (3) -

Less: Investment in LCR at end of quarter (35) (32) (58) (20) (27) (44) (33) (29) (54) (71) (54) (68) (20) (1) 14 (3)

Net cash distributions from (contributions to) LCR 33$ (7)$ 16$ 76$ 20$ 24$ 59$ 17$ 2$ 22$ 49$ 7$ 67$ 69$ 55$ 32$

Distributions from LCR 33$ -$ 24$ 86$ 22$ 30$ 79$ 34$ 24$ 27$ 63$ 12$ 88$ 69$ 58$ 38$ Contributions to LCR - (7) (8) (10) (2) (6) (20) (17) (22) (5) (14) (5) (21) - (3) (6)

Net cash distributions from (contributions to) LCR 33$ (7)$ 16$ 76$ 20$ 24$ 59$ 17$ 2$ 22$ 49$ 7$ 67$ 69$ 55$ 32$

RECONCILIATION OF LCR NET CASH DISTRIBUTIONS

LYONDELL CHEMICAL COMPANYRECONCILIATION OF LCR NET INCOME (LOSS) TO EBITDA

(Millions of dollars)