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Index to the Consolidated FinancialStatements

| x   | Annual      Report Pursuant to Section 13 or 15(D) of the Securities Exchange Act of      1934 for the Fiscal Year Ended December 31,  2007 |
|---------------|--------------------------------------------------------------------------------------------------------------------------------------------------|

| o   | Transition      Report Pursuant to Section 13 or 15(D) of the Securities Exchange Act of      1934 |
|---------------|----------------------------------------------------------------------------------------------------|

| Delaware                                      | 76-0550481               |
|-----------------------------------------------|--------------------------|
| (State      or other jurisdiction of          | (I.R.S.      Employer    |
| incorporation      or organization)           | Identification      No.) |
|                                          |                     |
| 1221      McKinney Street,                    | 77010                    |
| Suite      700, Houston, Texas                | (Zip      Code)          |
| (Address      of principal executive offices) |                     |

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TABLE OF CONTENTS

|  PART I                                                         |  1  |
|----------------------------------------------------------------------|----------|
|  Item1.   Business                               |  1  |
|  EQUISTAR                                                       |  1  |
|  Overview of the Business                                       |  1  |
| Additional Information    Available                                  | 1        |
|  CHEMICALS SEGMENT                                              |  2  |
|  Overview                                                       |  2  |
| Marketing and Sales                                                  | 3        |
| Raw Materials                                                        | 5        |
| Competition and Industry      Conditions                             | 6        |
|  POLYMERS SEGMENT                                               |  6  |
|  Overview                                                       |  6  |
| Marketing and Sales                                                  | 7        |
| Raw Materials                                                        | 8        |
| Competition and Industry      Conditions                             | 8        |
|  ENVIRONMENTAL CAPITAL EXPENDITURES                             |  9  |
|  RESEARCH AND      TECHNOLOGY;  INTELLECTUAL PROPERTY |  9  |
|  EMPLOYEE RELATIONS                                             |  9  |
|  Item 1A.  Risk Factors                               |  10 |
|  Risks Relating to the      Businesses                          |  10 |
| Risks Relating to Debt and Other Financial      Obligations          | 16       |
|  FORWARD-LOOKING STATEMENTS                                     |  20 |
|  INDUSTRY AND OTHER      INFORMATION                            |  21 |
|  NON-GAAP FINANCIAL MEASURES                                    |  21 |
|  Item 2.  Properties                                  |  22 |
|  Principal Manufacturing      Facilities                        |  22 |
| Other Locations and Properties                                       | 23       |
|  Item 3.  Legal Proceedings                           |  23 |
|  Litigation Matters                                             |  23 |
| Environmental Matters                                                | 23       |
| Indemnification                                                      | 24       |

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|  Item 4.  Submission of Matters to a Vote of      Security Holders                                                                     |  24 |
|-------------------------------------------------------------------------------------------------------------------------------------------------------|----------|
|  PART II                                                                                                                                         |  25 |
|  Item 5.  Market for Registrant’s Common Equity,      Related Stockholder Matters and Issuer Purchases of Equity      Securities |  25 |
|  Item 6.  Selected Financial    Data                                                                                                   |  26 |
|  Item 7.  Management’s Discussion and Analysis of      Financial Condition and Results of Operations                             |  27 |
| Acquisition                                                                                                                                           | 27       |
| Overview                                                                                                                                              | 28       |
| Results of Operations                                                                                                                                 | 30       |
| Financial Condition                                                                                                                                   | 35       |
| Current BusinessOutlook                                                                                                                               | 41       |
| Related Party Transactions                                                                                                                            | 42       |
| Critical Accounting    Policies                                                                                                                       | 42       |
| Accounting And Reporting      Changes                                                                                                                 | 44       |
| Environmental And Other    Matters                                                                                                                    | 45       |
|  Item 7A.  Quantitative and Qualitative      Disclosures About Market Risk                                                             |  45 |
|  Commodity Price Risk                                                                                                                            |  45 |
| Interest Rate Risk                                                                                                                                    | 46       |
|  Item 8.  Financial Statements and Supplementary      Data                                                                             |  47 |
|  Item 9.  Changes in and Disagreements with      Accountants on Accounting and Financial Disclosures                                   |  82 |
|  Item 9A.  Controls and    Procedures                                                                                                  |  82 |
|  Item 9B.  Other Information                                                                                                           |  82 |
|  PART III                                                                                                                                        |  83 |
|  Item 10.  Directors, Executive Officers and      Corporate Governance                                                                 |  83 |
|  Item 11.  Executive    Compensation                                                                                                   |  83 |
|  Item 12.  Security Ownership of Certain      Beneficial Owners and Management and Related Stockholder      Matters                    |  83 |
|  Item 13.  Certain Relationships and Related      Transactions, and Director Independence                                              |  83 |
|  Item 14.  Principal Accountant Fees and      Services                                                                                 |  83 |
|  Audit and Non-Audit Fees                                                                                                                        |  83 |
| Pre-Approval Policy                                                                                                                                   | 84       |
|  PART IV                                                                                                                                         |  85 |
|  Item 15.  Exhibits and Financial Statement      Schedules                                                                             |  85 |

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Index to the Consolidated FinancialStatements

PART I

Item 1.  Business

EQUISTAR

Overview of the Business

| ·   | Equistar’s      chemicals business segment produces and markets ethylene, its co-products      and derivatives.  Ethylene co-products include propylene,      butadiene and aromatics, which include benzene and      toluene.  Derivatives of ethylene in this segment include      ethylene oxide (“EO”), ethylene glycol (“EG”) and other EO derivatives, as      well as ethanol.  Equistar’s chemicals business segment also      produces gasoline blending components such as methyl tertiary butyl ether      (“MTBE”) and alkylate. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Equistar’s      polymers business segment produces and markets polyethylene (high density      polyethylene (“HDPE”), low density polyethylene (“LDPE”) and linear low      density polyethylene (“LLDPE”)) and  polypropylene. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Additional Information Available

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CHEMICALS SEGMENT

Overview

| ·   | the      primary products of Equistar’s chemicals  segment; |
|--------------------|-------------------------------------------------------------------|

| ·   | annual      processing capacity as of December 31, 2007;and |
|--------------------|-------------------------------------------------------------|

| ·   | the      primary uses for those products. |
|--------------------|-------------------------------------------|

| Product                    |   | Annual      Capacity                 |   | Primary      Uses                                                                                                                                                                                                                                                                                                                             |
|----------------------------|--------|--------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Ethylene              |   | 10.8      billion pounds (a)    |   | Ethylene      is used as a raw material to manufacture polyethylene, EO, ethanol,      ethylene dichloride, styrene and vinyl acetate monomer.                                                                                                                                                                                           |
| Ethylene      Co-Products: |   |                                 |   |                                                                                                                                                                                                                                                                                                                                          |
| Propylene             |   | 4.8      billion pounds (a)(b)  |   | Propylene      is used to produce polypropylene, acrylonitrile and propylene      oxide.                                                                                                                                                                                                                                                 |
| Butadiene                  |   | 1.2      billion pounds         |   | Butadiene      is used to manufacture styrene-butadiene rubber and polybutadiene rubber,      which are used in the manufacture of tires, hoses, gaskets and other      rubber products.  Butadiene is also used in the production of      paints, adhesives, nylon clothing, carpets, paper coatings and engineered      plastics. |
| Aromatics:                 |   |                                 |   |                                                                                                                                                                                                                                                                                                                                          |
| Benzene               |   | 310      million gallons   |   | Benzene      is used to produce styrene, phenol and cyclohexane. These products are      used in the production of nylon, plastics, synthetic rubber and      polystyrene.  Polystyrene is used in insulation, packaging and      drink cups.                                                                                  |

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| Product                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | Annual      Capacity                                                                 |   | Primary      Uses                                                                                                                                                                                                             |
|-----------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Toluene                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 66      million gallons                                                              |   | Toluene      is used as an octane enhancer in gasoline, as a chemical raw material for      benzene and/or paraxylene production, and a core ingredient in toluene      diisocyanate, a compound used in urethane production. |
| Ethylene      Derivatives:               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                 |   |                                                                                                                                                                                                                          |
| Ethylene      Oxide (EO)                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 1.5      billion pounds EO equivalents; 400 million pounds as pure EO      (c)  |   | EO      is used to produce surfactants, industrial cleaners, cosmetics,      emulsifiers, paint, heat transfer fluids and ethylene glycol.                                                                               |
| Ethylene      Glycol (EG)                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 1.4      billion pounds (c)                                                |   | EG      is used to produce polyester fibers and film, polyethylene terephthalate      (“PET”) resin, heat transfer fluids and automobileantifreeze.                                                          |
| Other      Ethylene OxideDerivatives     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 225      million pounds                                                    |   | EO      derivatives include ethylene glycol ethers and ethanolamines, and are used      to produce paint and coatings, polishes, solvents and chemical      intermediates.                                               |
| Ethanol                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 50      million gallons                                                         |   | Ethanol      is used in the production of solvents as well as household, medicinal and      personal care products.                                                                                                      |
| Gasoline      Blending Components:       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                 |   |                                                                                                                                                                                                                          |
| Methyl      Tertiary Butyl Ether (MTBE)  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 284      million gallons(18,500      barrels/day) (d)                      |   | MTBE      is a high octane gasoline blending component.                                                                                                                                                                  |
| Alkylate                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 337      million gallons (e)                                                    |   | Alkylate      is a high octane gasoline blending component.                                                                                                                                                              |
|                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                 |   |
| (a)                                           | Excludes      850 million pounds/year of ethylene capacity and 200 million      pounds/year of propylene capacity at Equistar’s Lake Charles, Louisiana      ethylene and co-products facility, which has been idled since the first      quarter 2001.  Although Equistar retains the physical ability to      restart or sell that facility, in the third quarter of 2006 Equistar      determined that it had no expectation of resuming production at that      facility.  |                                                                                 |
| (b)                                           | Does      not include refinery-grade material from Lyondell’s refinery or production      from the product flexibility unit at the Channelview facility, which can      convert ethylene and other light petrochemicals into      propylene.  These facilities have an annual processing capacity      of an additional one billion pounds/year of propylene.                                                                                                                       |                                                                                 |
| (c)                                           | Includes      700 million pounds/year of EO equivalents capacity and      800 million pounds/year of EG capacity at the Beaumont, Texas      facility, which represents 100% of the EO equivalents capacity and EG      capacity, respectively, at the facility.  The Beaumont, Texas      facility is owned by PD Glycol, a partnership owned 50% by Equistar and      50% by E. I. du Pont de Nemours and Company (“DuPont”).                                          |                                                                                 |
| (d)                                           | Includes      up to 44 million gallons/year of capacity produced for and returned      to Lyondell.                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                 |
| (e)                                           | Includes      up to 172 million gallons/year of capacity produced for and returned      to Lyondell.                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                 |

Marketing and Sales

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Raw Materials

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Competition and Industry Conditions

POLYMERS SEGMENT

Overview

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Index to the Consolidated FinancialStatements

| ·   | the      primary products of Equistar’s polymerssegment; |
|--------------------|----------------------------------------------------------------|

| ·   | annual      processing capacity as of December 31, 2007;and |
|--------------------|-------------------------------------------------------------|

| ·   | the      primary uses for those products. |
|--------------------|-------------------------------------------|

| Product                                          |   | Annual      Capacity          |   | Primary      Uses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|--------------------------------------------------|--------|-------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Polyethylene:                                    |   |                          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| High      densitypolyethylene      (HDPE)   |   | 3.1      billion pounds  |   | HDPE      is used to manufacture grocery, merchandise and trash bags; food      containers for items from frozen desserts to margarine; plastic caps and      closures; liners for boxes of cereal and crackers; plastic drink cups and      toys; dairy crates; bread trays; pails for items from paint to fresh      fruits and vegetables; safety equipment such as hard hats; house wrap for      insulation; bottles for household and industrial chemicals and motor oil;      milk, water, and juice bottles; large (rotomolded) tanks for storing      liquids such as agricultural and lawn care chemicals; and      pipe.  |
| Low      densitypolyethylene      (LDPE)         |   | 1.5      billion pounds  |   | LDPE      is used to manufacture food packaging films; plastic bottles for packaging      food and personal care items; dry cleaning bags; ice bags; pallet shrink      wrap; heavy-duty bags for mulch and potting soil; boil-in-bag bags;      coatings on flexible packaging products; and coatings on paper board such      as milk cartons. Ethylene vinyl acetate is a specialized form of LDPE used      in foamed sheets, bag-in-box bags, vacuum cleaner hoses, medical tubing,      clear sheet protectors and flexible binders.                                                                                           |
| Linear      low densitypolyethylene      (LLDPE) |   | 1.2      billion pounds  |   | LLDPE      is used to manufacture garbage and lawn-leaf bags; industrial can liners;      housewares; lids for coffee cans and margarine tubs, dishpans, home      plastic storage containers, kitchen trash containers; large (rotomolded)      toys like outdoor gym sets; drip irrigation tubing; wire and cable      insulating resins and compounds used to insulate copper and fiber optic      wiring, and film; shrink wrap for multi-packaging canned food, bag-in-box      bags, produce bags, and pallet stretch wrap.                                                                                                    |
| Polypropylene                               |   | 280      million pounds  |   | Polypropylene      is used to manufacture fibers for carpets, rugs and upholstery;      housewares; automotive battery cases; automotive fascia, running boards      and bumpers; grid-type flooring for sports facilities; fishing tackle      boxes; and bottle caps and closures.                                                                                                                                                                                                                                                                                                                                                 |

Marketing and Sales

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Raw Materials

Competition and Industry Conditions

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Index to the Consolidated FinancialStatements

ENVIRONMENTAL CAPITAL EXPENDITURES

RESEARCH AND TECHNOLOGY; INTELLECTUALPROPERTY

EMPLOYEE RELATIONS

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Index to the Consolidated FinancialStatements

Item 1A.  Risk Factors

Risks Relating to the Businesses

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| ·   | supply      of and demand for raw materials; |
|--------------------|----------------------------------------------|

| ·   | changes      in customer buying patterns and demand for Equistar’s      products; |
|--------------------|-----------------------------------------------------------------------------------------|

| ·   | general      economic conditions; |
|--------------------|-----------------------------------|

| ·   | domestic      and international events andcircumstances; |
|--------------------|----------------------------------------------------------|

| ·   | competitor      actions; |
|--------------------|--------------------------|

| ·   | governmental      regulation in the U.S. and abroad;and |
|--------------------|---------------------------------------------------------|

| ·   | severe      weather and natural disasters. |
|--------------------|--------------------------------------------|

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|   | Ÿ | difficulties      arising from LyondellBasell Industries operating a significantly larger      and more complex organization and adding Lyondell’s operations (including      those of Equistar) to Basell’s legacy  operations; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Ÿ | difficulties      in the assimilation of the assets and operations of the Lyondell      businesses (including those of Equistar) with the assets and operations of      Basell, especially when the assets are in business segments not shared      historically by both companies or involve joint venture      partners; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Ÿ   | the      loss of, or difficulty in attracting, customers, business partners or key      employees as a result of uncertainties associated with the acquisition or      otherwise; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Ÿ   | customers      and business partners being unwilling to continue doing business with      Equistar on the same or similar terms as a result of the      acquisition; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Ÿ | challenges      associated with the implementation of changes in management in connection      with the acquisition and the integration of the combined company      management team; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Ÿ | difficulties      in consolidating the workforces; |
|--------|--------|----------------------------------------------------|

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|   | Ÿ | the      diversion of attention from other business  concerns; |
|--------|--------|----------------------------------------------------------------|

|   | Ÿ | difficulties      arising from coordinating geographically disparate organizations, systems      and facilities; |
|--------|--------|------------------------------------------------------------------------------------------------------------------|

|   | Ÿ | difficulties      arising from coordinating and consolidating corporate and administrative      functions, including integration of internal controls and      procedures; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Ÿ | unforeseen      legal, regulatory, contractual, labor or other issues;  and |
|--------|--------|-----------------------------------------------------------------------------|

|   | Ÿ | the      failure to realize expected profitability or  growth. |
|--------|--------|----------------------------------------------------------------|

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| ·   | pipeline      leaks and ruptures; |
|--------------------|-----------------------------------|

| ·   | explosions; |
|--------------------|-------------|

| ·   | fires; |
|--------------------|--------|

| ·   | severe      weather and natural disasters; |
|--------------------|--------------------------------------------|

| ·   | mechanical      failure; |
|--------------------|--------------------------|

| ·   | unscheduled      downtimes; |
|--------------------|-----------------------------|

| ·   | supplier      disruptions; |
|--------------------|----------------------------|

| ·   | labor      shortages or other labordifficulties; |
|--------------------|--------------------------------------------------|

| ·   | transportation      interruptions; |
|--------------------|------------------------------------|

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| ·   | remediation      complications; |
|--------------------|---------------------------------|

| ·   | chemical      spills; |
|--------------------|-----------------------|

| ·   | discharges      or releases of toxic or hazardous substances or  gases; |
|--------------------|-------------------------------------------------------------------------|

| ·   | storage      tank leaks; |
|--------------------|--------------------------|

| ·   | other      environmental risks; and |
|--------------------|-------------------------------------|

| ·   | terrorist      acts. |
|--------------------|----------------------|

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Risks Relating to Debt and Other FinancialObligations

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|   | Ÿ | make      Equistar more vulnerable to a downturn in its businesses, its industry or      the economy in general as a significant percentage of its cash flow from      operations is required to make payments on its indebtedness, making it      more difficult to react to changes in its business and in market or      industry conditions; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Ÿ | require      Equistar to dedicate a substantial portion of its future cash flow from      operations to the payment of principal and interest on indebtedness and to      satisfy other financial obligations, thereby reducing the availability of      its cash flow to grow its business and to fund working capital, capital      expenditures, research and development efforts and other general corporate      purposes; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Ÿ | constrain      its ability to obtain additional financing in the future for working      capital, capital expenditures, acquisitions, debt service requirements or      other purposes, on satisfactory terms or at all, especially given the      current weak environment in the capitalmarkets; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Ÿ | make      it more difficult for it to satisfy its financial    obligations; |
|--------|--------|-----------------------------------------------------------------------------|

|   | Ÿ | place      it at a competitive disadvantage as compared to competitors that have less      debt and other financial obligations and lower debt service requirements;      and |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Ÿ | make      it more vulnerable to increases in interest rates since part of its      indebtedness is, and any future debt may be, subject to variable interest      rates. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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FORWARD-LOOKING STATEMENTS

| ·   | the      availability, cost and price volatility of raw materials and      utilities, |
|--------------------|---------------------------------------------------------------------------------------|

| ·   | the      supply/demand balances for Equistar’s products, and the related effects of      industry production capacities and operating  rates, |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | uncertainties      associated with the U.S. and worldwide economies, including those due to      political tensions in the Middle East and  elsewhere, |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the      cyclical nature of the chemicalindustry, |
|--------------------|---------------------------------------------------|

| ·   | operating      interruptions (including leaks, explosions, fires, weather-related      incidents, mechanical failures, unscheduled downtimes, supplier      disruptions, labor shortages or other labor difficulties, transportation      interruptions, spills and releases and other environmental      risks), |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | legal      and environmental proceedings, |
|--------------------|-------------------------------------------|

| ·   | current      and potential governmental regulatory actions in the U.S. and in other      countries, |
|--------------------|-----------------------------------------------------------------------------------------------------|

| ·   | terrorist      acts and international politicalunrest, |
|--------------------|--------------------------------------------------------|

| ·   | competitive      products and pricing pressures, |
|--------------------|--------------------------------------------------|

| ·   | Equistar’s      ability to service itsindebtedness, |
|--------------------|-----------------------------------------------------------|

| ·   | available      cash and access to capital markets, |
|--------------------|----------------------------------------------------|

| ·   | technological      developments, and |
|--------------------|--------------------------------------|

| ·   | Equistar’s      ability to implement its business strategies, including integration within      LyondellBasell Industries. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------|

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INDUSTRY AND OTHER INFORMATION

NON-GAAP FINANCIAL MEASURES

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Item 2.  Properties

Principal Manufacturing Facilities

| Location                                                                                                                                                                                                                                                                              |   | Segment   |   | Principal      Products                                                                  |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------|--------|------------------------------------------------------------------------------------------|
| Bayport      (Pasadena), Texas †*                                                                                                                                                                                                                                               |   | Chemicals |   | EO,      EG and other EO Derivatives                                                     |
|                                                                                                                                                                                                                                                                                  |   |      |   |                                                                                     |
| Bayport      (Pasadena), Texas (a)†                                                                                                                                                                                                                                             |   | Polymers  |   | LDPE                                                                                     |
|                                                                                                                                                                                                                                                                                  |   |      |   |                                                                                     |
| Beaumont,      Texas      (b)†                                          |   | Chemicals |   | EG                                                                                       |
|                                                                                                                                                                                                                                                                                  |   |      |   |                                                                                     |
| Channelview,      Texas (c)†*                                                                                                                                                                                                                                                   |   | Chemicals |   | Ethylene,      Propylene, Butadiene, Benzene,  Toluene, Alkylate and      MTBE |
|                                                                                                                                                                                                                                                                                  |   |      |   |                                                                                     |
| Chocolate      Bayou, Texas (d)(e)†                                                                                                                                                                                                                                             |   | Chemicals |   | Ethylene,      Propylene, Butadiene, Benzene, Toluene and MTBE                           |
|                                                                                                                                                                                                                                                                                  |   |      |   |                                                                                     |
| Chocolate      Bayou, Texas (d) †*                                                                                                                                                                                                                                              |   | Polymers  |   | HDPE                                                                                     |
|                                                                                                                                                                                                                                                                                  |   |      |   |                                                                                     |
| Clinton,      Iowa      †*                                              |   | Chemicals |   | Ethylene      and Propylene                                                              |
|                                                                                                                                                                                                                                                                                  |   | Polymers  |   | LDPE      and HDPE                                                                       |
|                                                                                                                                                                                                                                                                                  |   |      |   |                                                                                     |
| Corpus      Christi, Texas †*                                                                                                                                                                                                                                                   |   | Chemicals |   | Ethylene,      Propylene, Butadiene and Benzene                                          |
|                                                                                                                                                                                                                                                                                  |   |      |   |                                                                                     |
| Fairport      Harbor, Ohio *                                                                                                                                                                                                                                                          |   | Polymers  |   | Performance      Polymers                                                                |
|                                                                                                                                                                                                                                                                                  |   |      |   |                                                                                     |
| La      Porte, Texas      †*                                            |   | Chemicals |   | Ethylene      and Propylene                                                              |
|                                                                                                                                                                                                                                                                                  |   | Polymers  |   | LDPE      and LLDPE                                                                      |
|                                                                                                                                                                                                                                                                                  |   |      |   |                                                                                     |
| Lake      Charles, Louisiana (f)                                                                                                                                                                                                                                                      |   | Chemicals |   | Ethylene      and Propylene                                                              |
|                                                                                                                                                                                                                                                                                  |   |      |   |                                                                                     |
| Matagorda,      Texas      †*                                           |   | Polymers  |   | HDPE                                                                                     |
|                                                                                                                                                                                                                                                                                  |   |      |   |                                                                                     |
| Morris,      Illinois      †*                                           |   | Chemicals |   | Ethylene      and Propylene                                                              |
|                                                                                                                                                                                                                                                                                  |   | Polymers  |   | LDPE,      LLDPE and Polypropylene                                                       |
|                                                                                                                                                                                                                                                                                  |   |      |   |                                                                                     |
| Newark,      New      Jersey                                                  |   | Chemicals |   | Denatured      Alcohol                                                                   |
|                                                                                                                                                                                                                                                                                  |   |      |   |                                                                                     |
| Tuscola,      Illinois      †                                           |   | Chemicals |   | Ethanol                                                                                  |
|                                                                                                                                                                                                                                                                                  |   |      |   |                                                                                     |
| Victoria,      Texas      (e)†*                                         |   | Polymers  |   | HDPE                                                                                     |

|    |                                                                                                                                                                                                                                                                                                                                                                                                              |   |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| † | Facilities      which received the OSHA Star Certification, which is the highest safety      designation issued by the U.S. Department of Labor.                                                                                                                                                                                                                                                                  |
| *       | The      facility, or portions of the facility, as applicable, owned by Equistar      are mortgaged as collateral for Lyondell’s credit  facility.                                                                                                                                                                                                                                                          |
| (a)     | The      facility is located on leased land.  The facility is operated by      an unrelated party.                                                                                                                                                                                                                                                                                                      |
| (b)     | The      Beaumont facility is owned by PD Glycol, a partnership owned 50% by an      unrelated party.                                                                                                                                                                                                                                                                                                             |
| (c)     | The      Channelview facility has two ethylene processing units.  An      unrelated party owns an idled facility at the site on land leased from      Equistar.  Equistar also operates a styrene maleic anhydride      unit and a polybutadiene unit, which are owned by an unrelated party and      are located on property leased from Equistar within the Channelview      facility.      |
| (d)     | Millennium      and Occidental each contributed a facility located at the Chocolate Bayou      site.  These facilities are not on contiguous      property.                                                                                                                                                                                                                                             |
| (e)     | The      facility is located on leased land.                                                                                                                                                                                                                                                                                                                                                                      |
| (f)     | The      Lake Charles facility has been idled since the first quarter of 2001.      Although Equistar retains the physical ability to restart or sell that      facility, in the third quarter of 2006 Equistar determined that it had no      expectation of resuming production at that facility.  The      facility and land are leased from Occidental under a lease that expires in      May 2009. |

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Other Locations and Properties

Item 3.  LegalProceedings

Litigation Matters

Environmental Matters

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Index to the Consolidated FinancialStatements

Indemnification

Item 4.  Submission of Matters to a Vote ofSecurity Holders

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PART II

Item 5.  Market for Registrant’s CommonEquity, Related Stockholder Matters and Issuer Purchases of EquitySecurities

| Period              |   | Distribution      Amount                                           |
|---------------------|--------|--------------------------------------------------------------------|
| 2006:               |   |                                                               |
| First      Quarter  |   | $  200    million                                             |
| Second      Quarter |   | $  100      million                                      |
| Third      Quarter  |   | $         75 million                           |
| Fourth      Quarter |   | $  200      million                                      |
|                |   |                                                               |
| 2007:               |   |                                                               |
| First      Quarter  |   | $  100      million                                      |
| Second      Quarter |   |                ¾ |
| Third      Quarter  |   |                ¾ |
| Fourth      Quarter |   |                ¾ |

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Item 6.  Selected FinancialData

|                                                     |   | Successor                                                            |   |   | Predecessor                                                        |   |
|----------------------------------------------------------|--------|----------------------------------------------------------------------|--------|--------|--------------------------------------------------------------------|--------|
|                                                     |   | For      theperiod      fromDecember 21throughDecember 31, |   |   | For      theperiod      fromJanuary 1throughDecember 20, |   |   | For      the Year Ended December 31, |   |
| Millions of      dollars                                 |   | 2007 (a)                                                             |   |   | 2007 (a)                                                           |   |   | 2006 |   |   | 2005 |   |   | 2004 |   |   | 2003 |   |
| Results      of Operations Data:                         |   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Sales      and other operatingrevenues                   |   | $                                                                    | 457    |   |                                                               | $      | 13,037 |   |   | $ | 12,765 |   |   | $ | 11,686 |   |   | $ | 9,316 |   |   | $ | 6,545 |   |
| Income      (loss) before interest on push-down debt (b) |   |                                                                 | (65    | )      |                                                               |   | (216 | ) |   |   | 614 |   |   |   | 748 |   |   |   | 276 |   |   |   | (339 | ) |
| Net      income (loss) (b)                               |   |                                                                 | (122   | )      |                                                               |   | (216 | ) |   |   | 614 |   |   |   | 748 |   |   |   | 276 |   |   |   | (339 | ) |
| Balance      Sheet Data:                                 |   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      assets                                        |   |                                                                 | 10,072 |   |                                                               |   |   |   |   |   | 5,359 |   |   |   | 5,320 |   |   |   | 5,074 |   |   |   | 5,028 |   |
| Long-term      debt:                                     |   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Push-down      debt (c)                                  |   |                                                                 | 16,829 |   |                                                               |   |   |   |   |   | -      - |   |   |   | -      - |   |   |   | -      - |   |   |   | -      - |   |
| Debt      of Equistar                                    |   |                                                                 | 129    |   |                                                               |   |   |   |   |   | 2,160 |   |   |   | 2,161 |   |   |   | 2,312 |   |   |   | 2,314 |   |
| Cash      Flow Data:                                     |   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      provided (used) by -                           |   |                                                                 |   |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating      activities                                |   |                                                                 | (59    | )      |                                                               |   | 661 |   |   |   | 807 |   |   |   | 1,047 |   |   |   | 215 |   |   |   | 164 |   |
| Investing      activities                                |   |                                                                 | (12    | )      |                                                               |   | (264 | ) |   |   | (166 | ) |   |   | (150 | ) |   |   | (60 | ) |   |   | (37 | ) |
| Financing      activities                                |   |                                                                 | (15    | )      |                                                               |   | (384 | ) |   |   | (723 | ) |   |   | (721 | ) |   |   | (315 | ) |   |   | 45 |   |

| (a)   | As      a result of the acquisition of Lyondell by LyondellBasell Industries on      December 20, 2007, Equistar’s assets and liabilities were revalued to      reflect the values assigned in LyondellBasell Industries’ accounting for      the purchase of Lyondell, resulting in a new basis of      accounting.  To indicate the application of a different basis of      accounting for the period subsequent to the acquisition, the 2007      financial statements present separately the period prior to the      acquisition (“Predecessor”) and the 11-day period after the acquisition      (“Successor”).  In addition, acquisition-related debt totaling      $16,829 million for which Equistar is not the primary obligor, but      which it has guaranteed and which was used by LyondellBasell Industries in      the acquisition of Lyondell (“push-down debt”), is included in Equistar’s      long-term debt. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | The      2007 Successor period includes $57 million of interest expense on      push-down debt for which Equistar is not the primary obligor and a charge      of $22 million for in-process research and      development.  Net income for 2006 includes a $135 million      charge for impairment of the net book value of the idled Lake Charles,      Louisiana ethylene facility. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c)   | Push-down      debt presented above excludes current portion of $146 million and other      push-down debt of $717 million also classified as current, for total      push-down debt of$17,692 million. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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Item 7.  Management's Discussion and Analysisof Financial Condition and Results of Operations

ACQUISITION

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|                                                     |   | Successor           |     |   | Predecessor       |   |     |                                 |   |   |        |   |
|----------------------------------------------------------|--------|---------------------|----------|--------|-------------------|--------|----------|--------------------------------------|--------|--------|-------------|--------|
|                                                     |   | For      the period |     |   | For      the      |   |     |                                 |   |   |        |   |
|                                                     |   | from                |     |   | period      from  |   |     |                                 |   |   |        |   |
|                                                     |   | December 21    |     |   | January 1    |   |     |                                 |   |   |        |   |
|                                                     |   | through             |     |   | through           |   |     | Combined                             |   |   | Predecessor |   |
|                                                     |   | December      31,   |     |   | December      20, |   |     | For      the year ended December 31, |   |
| Millions of      dollars                                 |   | 2007                |     |   | 2007              |   |     | 2007                                 |   |   | 2006        |   |   | 2005 |   |
| Sales      and other operating revenues                  |   | $                   | 457      |   |              | $      | 13,037   |                                 |   | $      | 13,494      |   |   | $ | 12,765 |   |   | $ | 11,686 |   |
| Cost      of sales                                       |   |                | 495      |   |              |   | 12,656   |                                 |   |   | 13,151      |   |   |   | 11,562 |   |   |   | 10,487 |   |
| Asset      impairment                                    |   |                | -      - |   |              |   | -      - |                                 |   |   | -      -    |   |   |   | 135 |   |   |   | -      - |   |
| Selling,      general and administrative expenses        |   |                | 6        |   |              |   | 263      |                                 |   |   | 269         |   |   |   | 210 |   |   |   | 198 |   |
| Research      and development expenses                   |   |                | -      - |   |              |   | 37       |                                 |   |   | 37          |   |   |   | 34 |   |   |   | 33 |   |
| Purchased      in-process research and development       |   |                | 22       |   |              |   | -      - |                                 |   |   | 22          |   |   |   | -      - |   |   |   | -      - |   |
| Operating      income (loss)                             |   |                | (66      | )      |              |   | 81       |                                 |   |   | 15          |   |   |   | 824 |   |   |   | 968 |   |
| Interest      expense                                    |   |                | (1       | )      |              |   | (196     | )                                    |   |   | (197        | )      |   |   | (217 | ) |   |   | (227 | ) |
| Interest      income                                     |   |                | 2        |   |              |   | 6        |                                 |   |   | 8           |   |   |   | 7 |   |   |   | 9 |   |
| Other      expense, net                                  |   |                | -      - |   |              |   | (107     | )                                    |   |   | (107        | )      |   |   | -      - |   |   |   | (2 | ) |
| Income      (loss) before intereston      push-down debt |   |                | (65      | )      |              |   | (216     | )                                    |   |   | (281        | )      |   |   | 614 |   |   |   | 748 |   |
| Interest      expense on push-down debt                  |   |                | (57      | )      |              |   |     |                                 |   |   | (57         | )      |   |   |   |   |   |   |   |   |
| Net      income (loss)                                   |   | $                   | (122     | )      |              | $      | (216     | )                                    |   | $      | (338        | )      |   | $ | 614 |   |   | $ | 748 |   |

OVERVIEW

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Index to the Consolidated FinancialStatements

| ·   | crude      oil-based liquids (“liquids” or “heavy liquids”), including naphthas,      condensates, and gas oils, the prices of which are generally related to      crude oil prices; and |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | natural      gas liquids (“NGLs”), principally ethane and propane, the prices of which      are generally affected by natural gasprices. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                          |   | Average      Benchmark Price for the Year andPercent      Change Versus Prior Year Average |   |
|-------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------|--------|
|                                                                          |   | 2007                                                                                       |   |   | PercentIncrease |   |   | 2006 |   |   | PercentIncrease(Decrease) |   |   | 2005 |   |
|                                                                          |   |                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Crude      oil – dollars per barrel                                     |   |                                                                                       | 72.23  |   |   |   | 9 | % |   |   | 66.03 |   |   |   | 17 | % |   |   | 56.44 |   |
| Natural      gas – dollars per million BTUs                             |   |                                                                                       | 6.81   |   |   |   | 4 | % |   |   | 6.53 |   |   |   | (14 | )% |   |   | 7.58 |   |
| NWE      Naphtha – dollars per barrel                                   |   |                                                                                       | 75.91  |   |   |   | 21 | % |   |   | 62.72 |   |   |   | 19 | % |   |   | 52.79 |   |
| Weighted      average cost of ethyleneproduction      – cents per pound |   |                                                                                       | 37.98  |   |   |   | 22 | % |   |   | 31.05 |   |   |   | 5 | % |   |   | 29.58 |   |
| Ethylene      – cents per pound                                         |   |                                                                                       | 48.75  |   |   |   | 1 | % |   |   | 48.08 |   |   |   | 9 | % |   |   | 44.21 |   |
| Propylene      – cents per pound                                        |   |                                                                                       | 50.41  |   |   |   | 10 | % |   |   | 45.83 |   |   |   | 12 | % |   |   | 40.75 |   |
| Benzene      – cents per gallon                                         |   |                                                                                       | 361.67 |   |   |   | 11 | % |   |   | 326.33 |   |   |   | 13 | % |   |   | 289.88 |   |
| HDPE      – cents per pound                                             |   |                                                                                       | 73.25  |   |   |   | 3 | % |   |   | 71.42 |   |   |   | 6 | % |   |   | 67.29 |   |

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RESULTS OF OPERATIONS

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|                                     |   | For      the year ended December 31, |   |
|------------------------------------------|--------|-------------------------------------------|--------|
| Millions of      dollars                 |   | 2007                                      |   |   | 2006 |   |   | 2005 |   |
| Sales      and other operating revenues: |   |                                      |   |   |   |   |   |   |   |
| Chemicals      segment                   |   | $                                         | 12,431 |   |   | $ | 11,568 |   |   | $ | 10,701 |   |
| Polymers      segment                    |   |                                      | 3,495  |   |   |   | 3,424 |   |   |   | 3,110 |   |
| Intersegment      eliminations           |   |                                      | (2,432 | ) |   |   | (2,227 | ) |   |   | (2,125 | ) |
| Total                                    |   | $                                         | 13,494 |   |   | $ | 12,765 |   |   | $ | 11,686 |   |
| Operating      income (loss):            |   |                                      |   |   |   |   |   |   |   |   |   |   |
| Chemicals      segment                   |   | $                                         | 379    |   |   | $ | 689 |   |   | $ | 1,017 |   |
| Polymers      segment                    |   |                                      | 156    |   |   |   | 137 |   |   |   | 104 |   |
| Other:                                   |   |                                      |   |   |   |   |   |   |   |   |   |   |
| LIFO      adjustment                     |   |                                      | (498   | ) |   |   | (2 | ) |   |   | (153 | ) |
| Other                                    |   |                                      | (22    | ) |   |   | -      - |   |   |   | -      - |   |
| Total                                    |   | $                                         | 15     |   |   | $ | 824 |   |   | $ | 968 |   |

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|                                                        |   | For      the year ended December 31, |   |
|-------------------------------------------------------------|--------|--------------------------------------|--------|
|                                                        |   | 2007                                 |   |   | 2006 |   |   | 2005 |   |
| Millions of      dollars                                    |   |                                 |   |   |   |   |   |   |   |
| Sales      and other operating revenues                     |   | $                                    | 12,431 |   |   | $ | 11,568 |   |   | $ | 10,701 |   |
| Operating      income                                       |   |                                 | 379    |   |   |   | 689 |   |   |   | 1,017 |   |
|                                                        |   |                                 |   |   |   |   |   |   |   |   |   |   |
| Sales volumes, in      millions                             |   |                                 |   |   |   |   |   |   |   |   |   |   |
| Ethylene      and derivatives (pounds)                      |   |                                 | 11,559 |   |   |   | 11,599 |   |   |   | 11,629 |   |
| Intersegment      sales to polymers included above (pounds) |   |                                 | 5,309  |   |   |   | 5,113 |   |   |   | 5,211 |   |
| Other      ethylene derivatives included above (pounds)     |   |                                 | 2,256  |   |   |   | 2,022 |   |   |   | 1,952 |   |
| Ethylene      co-products:                                  |   |                                 |   |   |   |   |   |   |   |   |   |   |
| Non-aromatics      (pounds)                                 |   |                                 | 7,819  |   |   |   | 8,247 |   |   |   | 7,749 |   |
| Aromatics      (gallons)                                    |   |                                 | 354    |   |   |   | 358 |   |   |   | 412 |   |

|                                   |   | Average      Benchmark Price for the Year andPercent      Change Versus Prior Year Average |   |
|----------------------------------------|--------|--------------------------------------------------------------------------------------------|--------|
|                                   |   | 2007                                                                                       |   |   | PercentIncrease |   |   | 2006 |   |   | PercentIncrease |   |   | 2005 |   |
| Ethylene      – cents per pound  |   |                                                                                       | 48.75  |   |   |   | 1 | % |   |   | 48.08 |   |   |   | 9 | % |   |   | 44.21 |   |
| Propylene      – cents per pound |   |                                                                                       | 50.41  |   |   |   | 10 | % |   |   | 45.83 |   |   |   | 12 | % |   |   | 40.75 |   |
| Benzene      – cents per gallon  |   |                                                                                       | 361.67 |   |   |   | 11 | % |   |   | 326.33 |   |   |   | 13 | % |   |   | 289.88 |   |

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|                                    |   | For      the year ended December 31, |   |
|-----------------------------------------|--------|--------------------------------------|--------|
|                                    |   | 2007                                 |   |   | 2006 |   |   | 2005 |   |
| Millions of      dollars                |   |                                 |   |   |   |   |   |   |   |
| Sales      and other operating revenues |   | $                                    | 3,495  |   |   | $ | 3,424 |   |   | $ | 3,110 |   |
| Operating      income                   |   |                                 | 156    |   |   |   | 137 |   |   |   | 104 |   |
|                                    |   |                                 |   |   |   |   |   |   |   |   |   |   |
| Sales volumes, in      millions         |   |                                 |   |   |   |   |   |   |   |   |   |   |
| Polyethylene      (pounds)              |   |                                 | 5,357  |   |   |   | 5,171 |   |   |   | 4,971 |   |
| Polypropylene      (pounds)             |   |                                 | 245    |   |   |   | 260 |   |   |   | 273 |   |

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FINANCIAL CONDITION

|                       |   | Successor         |   |   | Predecessor       |   |   |                                 |   |   |        |   |
|----------------------------|--------|-------------------|--------|--------|-------------------|--------|--------|--------------------------------------|--------|--------|-------------|--------|
|                       |   | For      the      |   |   | For      the      |   |   |                                 |   |   |        |   |
|                       |   | period      from  |   |   | period      from  |   |   |                                 |   |   |        |   |
|                       |   | December 21  |   |   | January      1    |   |   |                                 |   |   |        |   |
|                       |   | through           |   |   | through           |   |   | Combined                             |   |   | Predecessor |   |
|                       |   | December      31, |   |   | December      20, |   |   | For      the year ended December 31, |   |
| Millions of      dollars   |   | 2007              |   |   | 2007              |   |   | 2007                                 |   |   | 2006        |   |   | 2005 |   |
| Source      (use) of cash: |   |              |   |   |              |   |   |                                 |   |   |        |   |   |   |   |
| Operating      activities  |   | $                 | (59    | )      |              | $      | 661    |                                 |   | $      | 602         |   |   | $ | 807 |   |   | $ | 1,047 |   |
| Investing      activities  |   |              | (12    | )      |              |   | (264   | )                                    |   |   | (276        | )      |   |   | (166 | ) |   |   | (150 | ) |
| Financing      activities  |   |              | (15    | )      |              |   | (384   | )                                    |   |   | (399        | )      |   |   | (723 | ) |   |   | (721 | ) |

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| ·   | $150 million      under Lyondell’s $1,150 million Accounts Receivable Securitization      Facility, which matures in December 2012.  The agreement      currently permits the sale of up to $1,150 million of total interest in      domestic accounts receivable of Lyondell, including Equistar and Houston      Refining.  The outstanding amount of accounts receivable sold      under the Accounts Receivable Securitization Facility was      $1,000 million at December 31,2007. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | $584 million      in total under a five-year $1,000 million senior secured      inventory-based credit facility of Lyondell and a subsidiary of the Basell      Group, after giving effect to the borrowing base net      of  $316 million of outstanding letters of credit under the      inventory-based credit facility as of December 31, 2007.  The      borrowing base is determined using a formula applied to inventory      balances.  At December 31, 2007, the outstanding borrowing under      the inventory-based credit facility was $100 million, all on the part      of Lyondell. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                               |   |   |   |   | Payments      Due By Period |   |
|------------------------------------|--------|--------|--------|--------|-----------------------------|--------|
| Millions of      dollars           |   | Total  |   |   | 2008                        |   |   | 2009 |   |   | 2010 |   |   | 2011 |   |   | 2012 |   |   | Thereafter |   |
|                               |   |   |   |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Long-term      debt:               |   |   |   |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Push-down      debt                |   | $      | 16,975 |   |                        | $      | 146 |   |   | $ | 147 |   |   | $ | 225 |   |   | $ | 301 |   |   | $ | 413 |   |   | $ | 15,743 |   |
| Debt      of Equistar              |   |   | 156    |   |                        |   | 27 |   |   |   | -      - |   |   |   | -      - |   |   |   | -      - |   |   |   | -      - |   |   |   | 129 |   |
| Related      party notes payable:  |   |   |   |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Push-down      debt                |   |   | 717    |   |                        |   | 717 |   |   |   | -      - |   |   |   | -      - |   |   |   | -      - |   |   |   | -      - |   |   |   | -      - |   |
| Notes      payable to Millennium   |   |   | 80     |   |                        |   | 80 |   |   |   | -      - |   |   |   | -      - |   |   |   | -      - |   |   |   | -      - |   |   |   | -      - |   |
| Interest      on long-term debt:   |   |   |   |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Push-down      debt                |   |   | 15,582 |   |                        |   | 1,555 |   |   |   | 1,681 |   |   |   | 1,826 |   |   |   | 1,965 |   |   |   | 2,099 |   |   |   | 6,456 |   |
|  Interest      of Equistar    |   |   | 206    |   |                        |   | 12 |   |   |   | 11 |   |   |   | 12 |   |   |   | 11 |   |   |   | 12 |   |   |   | 148 |   |
| Pension      benefits:             |   |   |   |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| PBO                                |   |   | 285    |   |                        |   | 18 |   |   |   | 19 |   |   |   | 19 |   |   |   | 20 |   |   |   | 21 |   |   |   | 188 |   |
| Assets                             |   |   | (274   | )      |                        |   | -      - |   |   |   | -      - |   |   |   | -      - |   |   |   | -      - |   |   |   | -      - |   |   |   | (274 | ) |
| Funded      status                 |   |   | 11     |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                               |   |   |   |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other      postretirement benefits |   |   | 103    |   |                        |   | 7 |   |   |   | 7 |   |   |   | 8 |   |   |   | 8 |   |   |   | 8 |   |   |   | 65 |   |
| Advances      from customers       |   |   | 142    |   |                        |   | 26 |   |   |   | 21 |   |   |   | 19 |   |   |   | 18 |   |   |   | 9 |   |   |   | 49 |   |
| Other                              |   |   | 65     |   |                        |   | 6 |   |   |   | 4 |   |   |   | 2 |   |   |   | 2 |   |   |   | 1 |   |   |   | 50 |   |
| Other      obligations:            |   |   |   |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Purchase      obligations          |   |   | 3,702  |   |                        |   | 304 |   |   |   | 291 |   |   |   | 280 |   |   |   | 278 |   |   |   | 277 |   |   |   | 2,272 |   |
| Operating      leases              |   |   | 667    |   |                        |   | 89 |   |   |   | 79 |   |   |   | 70 |   |   |   | 56 |   |   |   | 51 |   |   |   | 322 |   |
| Total                              |   | $      | 38,406 |   |                        | $      | 2,987 |   |   | $ | 2,260 |   |   | $ | 2,461 |   |   | $ | 2,659 |   |   | $ | 2,891 |   |   | $ | 25,148 |   |

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CURRENT BUSINESS OUTLOOK

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RELATED PARTY TRANSACTIONS

CRITICAL ACCOUNTING POLICIES

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ACCOUNTING AND REPORTING CHANGES

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ENVIRONMENTAL AND OTHER MATTERS

Item 7A.  Quantitative and QualitativeDisclosures About Market Risk

COMMODITY PRICE RISK

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INTEREST RATE RISK

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Index to the Consolidated FinancialStatements

Item 8.  Financial Statements andSupplementary Data

Index to the Consolidated Financial Statements

|                                                                                    |  Page |
|-----------------------------------------------------------------------------------------|------------|
| EQUISTAR      CHEMICALS, LP                                                             |       |
|  Management’s Report on Internal Control Over Financial      Reporting  | 48         |

| Reports of Independent Registered Public Accounting      Firm | 49     |
|---------------------------------------------------------------|--------|
|  Consolidated      Financial Statements:                 |   |

| Consolidated      Statements of Income                  | 51 |
|---------------------------------------------------------|----|
| Consolidated Balance Sheets                             | 52 |
| Consolidated      Statements of Cash Flows              | 53 |
| Consolidated      Statements of Partners’ Capital | 54 |
| Notes to      the Consolidated Financial Statements     | 55 |

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Index to the Consolidated FinancialStatements

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIALREPORTING

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Index to the Consolidated FinancialStatements

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTINGFIRM

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Index to the Consolidated FinancialStatements

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Index to the Consolidated FinancialStatements

CONSOLIDATED STATEMENTS OF INCOME

|                                                     |   | Successor                                                            |     |   | Predecessor                                                        |   |
|----------------------------------------------------------|--------|----------------------------------------------------------------------|----------|--------|--------------------------------------------------------------------|--------|
|                                                     |   | For      theperiod      fromDecember 21throughDecember 31, |     |   | For      theperiod      fromJanuary 1throughDecember 20, |   |   | For      the year ended December 31, |   |
| Millions of      dollars                                 |   | 2007                                                                 |     |   | 2007                                                               |   |   | 2006 |   |   | 2005 |   |
| Sales      and other operating revenues:                 |   |                                                                 |     |   |                                                               |   |   |   |   |   |   |   |
| Trade                                                    |   | $                                                                    | 342      |   |                                                               | $      | 9,451 |   |   | $ | 9,636 |   |   | $ | 8,732 |   |
| Related      parties                                     |   |                                                                 | 115      |   |                                                               |   | 3,586 |   |   |   | 3,129 |   |   |   | 2,954 |   |
|                                                     |   |                                                                 | 457      |   |                                                               |   | 13,037 |   |   |   | 12,765 |   |   |   | 11,686 |   |
| Operating      costs and expenses:                       |   |                                                                 |     |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Cost      of sales                                       |   |                                                                 | 495      |   |                                                               |   | 12,656 |   |   |   | 11,562 |   |   |   | 10,487 |   |
| Asset      impairment                                    |   |                                                                 | -      - |   |                                                               |   | -      - |   |   |   | 135 |   |   |   | -      - |   |
| Selling,      general and administrative expenses        |   |                                                                 | 6        |   |                                                               |   | 263 |   |   |   | 210 |   |   |   | 198 |   |
| Research      and development expenses                   |   |                                                                 | -      - |   |                                                               |   | 37 |   |   |   | 34 |   |   |   | 33 |   |
| Purchased      in-process research anddevelopment        |   |                                                                 | 22       |   |                                                               |   | -      - |   |   |   | -      - |   |   |   | -      - |   |
|                                                     |   |                                                                 | 523      |   |                                                               |   | 12,956 |   |   |   | 11,941 |   |   |   | 10,718 |   |
| Operating      income (loss)                             |   |                                                                 | (66      | )      |                                                               |   | 81 |   |   |   | 824 |   |   |   | 968 |   |
| Interest      expense:                                   |   |                                                                 |     |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Other                                                    |   |                                                                 | (1       | )      |                                                               |   | (180 | ) |   |   | (217 | ) |   |   | (227 | ) |
| Related      party                                       |   |                                                                 | -      - |   |                                                               |   | (16 | ) |   |   | -      - |   |   |   | -      - |   |
| Interest      income                                     |   |                                                                 | 2        |   |                                                               |   | 6 |   |   |   | 7 |   |   |   | 9 |   |
| Other      expense, net                                  |   |                                                                 | -      - |   |                                                               |   | (107 | ) |   |   | -      - |   |   |   | (2 | ) |
| Income      (loss) before interest onpush-down      debt |   |                                                                 | (65      | )      |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Interest      expense on push-down debt                  |   |                                                                 | (57      | )      |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Net      income (loss)                                   |   | $                                                                    | (122     | )      |                                                               | $      | (216 | ) |   | $ | 614 |   |   | $ | 748 |   |

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Index to the Consolidated FinancialStatements

CONSOLIDATED BALANCE SHEETS

|                                                     |   | Successor             |     |   | Predecessor           |   |
|----------------------------------------------------------|--------|-----------------------|----------|--------|-----------------------|--------|
| Millions of      dollars                                 |   | December      31,2007 |     |   | December      31,2006 |   |
|  ASSETS                                             |   |                  |     |   |                  |   |
| Current      assets:                                     |   |                  |     |   |                  |   |
| Cash      and cash equivalents                           |   | $                     | 60       |   |                  | $      | 133 |   |
| Accounts      receivable:                                |   |                  |     |   |                  |   |   |   |
| Trade,      net                                          |   |                  | 95       |   |                  |   | 890 |   |
| Related      parties                                     |   |                  | 43       |   |                  |   | 277 |   |
| Inventories                                              |   |                  | 1,754    |   |                  |   | 809 |   |
| Prepaid      expenses and other current assets           |   |                  | 60       |   |                  |   | 49 |   |
| Total      current assets                                |   |                  | 2,012    |   |                  |   | 2,158 |   |
|  Property,      plant and equipment, net            |   |                  | 5,116    |   |                  |   | 2,846 |   |
| Notes      receivable from related party                 |   |                  | 785      |   |                  |   | -      - |   |
| Investments                                              |   |                  | 65       |   |                  |   | 59 |   |
| Intangible      assets, net:                             |   |                  |     |   |                  |   |   |   |
| Debt      issuance costs on push-down debt               |   |                  | 334      |   |                  |   | -      - |   |
| Intangible      assets of Equistar                       |   |                  | 998      |   |                  |   | 285 |   |
| Goodwill                                                 |   |                  | 750      |   |                  |   | -      - |   |
| Other      assets, net                                   |   |                  | 12       |   |                  |   | 11 |   |
|  Total      assets                                  |   | $                     | 10,072   |   |                  | $      | 5,359 |   |
|  LIABILITIES      AND PARTNERS’ CAPITAL       |   |                  |     |   |                  |   |   |   |
| Current      liabilities:                                |   |                  |     |   |                  |   |   |   |
| Current      maturities of long-term debt:               |   |                  |     |   |                  |   |   |   |
| Push-down      debt                                      |   | $                     | 146      |   |                  | $      | - - |   |
| Debt      of Equistar                                    |   |                  | 27       |   |                  |   | -      - |   |
| Related      party borrowings – push-down          |   |                  | 717      |   |                  |   | -      - |   |
| Accounts      payable:                                   |   |                  |     |   |                  |   |   |   |
| Trade                                                    |   |                  | 975      |   |                  |   | 731 |   |
| Related      parties                                     |   |                  | 191      |   |                  |   | 174 |   |
| Accrued      liabilities                                 |   |                  | 295      |   |                  |   | 312 |   |
| Notes      payable to related party                      |   |                  | 80       |   |                  |   | -      - |   |
| Total      current liabilities                           |   |                  | 2,431    |   |                  |   | 1,217 |   |
|  Long-term      debt:                               |   |                  |     |   |                  |   |   |   |
| Push-down      debt                                      |   |                  | 16,829   |   |                  |   | -      - |   |
| Debt      of Equistar                                    |   |                  | 129      |   |                  |   | 2,160 |   |
| Other      liabilities and deferred revenues             |   |                  | 295      |   |                  |   | 378 |   |
| Commitments      and contingencies                       |   |                  |     |   |                  |   |   |   |
| Partners’      capital:                            |   |                  |     |   |                  |   |   |   |
| Partners’      accounts                            |   |                  | 7,746    |   |                  |   | 1,642 |   |
| Push-down      debt                                      |   |                  | (17,358  | )      |                  |   | -      - |   |
| Accumulated      other comprehensive loss                |   |                  | -      - |   |                  |   | (38 | ) |
| Total      partners’ capital (deficit)             |   |                  | (9,612   | )      |                  |   | 1,604 |   |
|  Total      liabilities and partners’ capital |   | $                     | 10,072   |   |                  | $      | 5,359 |   |

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Index to the Consolidated FinancialStatements

CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                                                                                            |   | Successor                                                            |     |   | Predecessor                                                         |   |
|-----------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------|----------|--------|---------------------------------------------------------------------|--------|
|                                                                                                            |   | For      theperiod      fromDecember      21throughDecember      31, |     |   | For      theperiod      fromJanuary      1,throughDecember      20, |   |   | For      the year endedDecember      31, |   |
| Millions of      dollars                                                                                        |   | 2007                                                                 |     |   | 2007                                                                |   |   | 2006 |   |   | 2005 |   |
| Cash      flows from operating activities:                                                                      |   |                                                                 |     |   |                                                                |   |   |   |   |   |   |   |
| Net      income (loss)                                                                                          |   | $                                                                    | (122     | )      |                                                                | $      | (216 | ) |   | $ | 614 |   |   | $ | 748 |   |
| Adjustments      to reconcile net income (loss) tonet      cash provided by (used in)operating      activities: |   |                                                                 |     |   |                                                                |   |   |   |   |   |   |   |   |   |   |   |
| Push-down      debt interest                                                                                    |   |                                                                 | 57       |   |                                                                |   | -      - |   |   |   | -      - |   |   |   | -      - |   |
| Depreciation      and amortization                                                                              |   |                                                                 | 17       |   |                                                                |   | 315 |   |   |   | 324 |   |   |   | 322 |   |
| Asset      impairment                                                                                           |   |                                                                 | -      - |   |                                                                |   | -      - |   |   |   | 135 |   |   |   | -      - |   |
| Deferred      maintenance turnaroundexpenditures                                                                |   |                                                                 | -      - |   |                                                                |   | (66 | ) |   |   | (12 | ) |   |   | (51 | ) |
| Purchased      in-process researchand      development                                                          |   |                                                                 | 22       |   |                                                                |   | -      - |   |   |   | -      - |   |   |   | -      - |   |
| Debt      prepayment premiums and charges                                                                       |   |                                                                 | -      - |   |                                                                |   | 109 |   |   |   | -      - |   |   |   | -      - |   |
| Changes      in assets and liabilities that provided (used) cash:                                               |   |                                                                 |     |   |                                                                |   |   |   |   |   |   |   |   |   |   |   |
| Accounts      receivable                                                                                        |   |                                                                 | -      - |   |                                                                |   | 288 |   |   |   | (243 | ) |   |   | (96 | ) |
| Inventories                                                                                                     |   |                                                                 | 34       |   |                                                                |   | (4 | ) |   |   | (156 | ) |   |   | (69 | ) |
| Accounts      payable                                                                                           |   |                                                                 | (23      | )      |                                                                |   | 284 |   |   |   | 168 |   |   |   | 197 |   |
| Other,      net                                                                                                 |   |                                                                 | (44      | )      |                                                                |   | (49 | ) |   |   | (23 | ) |   |   | (4 | ) |
| Net      cash provided by(used      in) operating activities                                                    |   |                                                                 | (59      | )      |                                                                |   | 661 |   |   |   | 807 |   |   |   | 1,047 |   |
|                                                                                                            |   |                                                                 |     |   |                                                                |   |   |   |   |   |   |   |   |   |   |   |
| Cash      flows from investing activities:                                                                      |   |                                                                 |     |   |                                                                |   |   |   |   |   |   |   |   |   |   |   |
| Expenditures      for property, plant and equipment                                                             |   |                                                                 | (12      | )      |                                                                |   | (228 | ) |   |   | (168 | ) |   |   | (153 | ) |
| Notes      receivable from related parties                                                                      |   |                                                                 | -      - |   |                                                                |   | (44 | ) |   |   | -      - |   |   |   | -      - |   |
| Other                                                                                                           |   |                                                                 | -      - |   |                                                                |   | 8 |   |   |   | 2 |   |   |   | 3 |   |
| Net      cash used in investing activities                                                                      |   |                                                                 | (12      | )      |                                                                |   | (264 | ) |   |   | (166 | ) |   |   | (150 | ) |
| Cash      flows from financing activities:                                                                      |   |                                                                 |     |   |                                                                |   |   |   |   |   |   |   |   |   |   |   |
| Repayment      of long-term debt                                                                                |   |                                                                 | (4       | )      |                                                                |   | (2,071 | ) |   |   | (150 | ) |   |   | (1 | ) |
| Payment      of debt issuance costs                                                                             |   |                                                                 | -      - |   |                                                                |   | (7 | ) |   |   | -      - |   |   |   | -      - |   |
| Contributions      from owners                                                                                  |   |                                                                 | -      - |   |                                                                |   | 1,703 |   |   |   | -      - |   |   |   | -      - |   |
| Distribution      to owners                                                                                     |   |                                                                 | -      - |   |                                                                |   | (100 | ) |   |   | (575 | ) |   |   | (725 | ) |
| Net      proceeds from notes payable to relatedparty                                                            |   |                                                                 | -      - |   |                                                                |   | 80 |   |   |   | -      - |   |   |   | -      - |   |
| Other                                                                                                           |   |                                                                 | (11      | )      |                                                                |   | 11 |   |   |   | 2 |   |   |   | 5 |   |
| Net      cash used in financing activities                                                                      |   |                                                                 | (15      | )      |                                                                |   | (384 | ) |   |   | (723 | ) |   |   | (721 | ) |
|                                                                                                            |   |                                                                 |     |   |                                                                |   |   |   |   |   |   |   |   |   |   |   |
| Increase      (decrease) in cash and cash equivalents                                                           |   |                                                                 | (86      | )      |                                                                |   | 13 |   |   |   | (82 | ) |   |   | 176 |   |
| Cash      and cash equivalents at beginning of period                                                           |   |                                                                 | 146      |   |                                                                |   | 133 |   |   |   | 215 |   |   |   | 39 |   |
| Cash      and cash equivalents at end of period                                                                 |   | $                                                                    | 60       |   |                                                                | $      | 146 |   |   | $ | 133 |   |   | $ | 215 |   |

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Index to the Consolidated FinancialStatements

CONSOLIDATED STATEMENTS OF PARTNERS’ CAPITAL

| Millions of      dollars                                                        |   | Lyondell |     |   | Millennium |   |     | Total  |   |   | AccumulatedOtherComprehensiveIncome      (Loss) |   |   | Push      downof      ParentDebt |     |   | NetPartners’Capital |   |     | ComprehensiveIncome      (Loss) |   |
|---------------------------------------------------------------------------------|--------|----------|----------|--------|------------|--------|----------|--------|--------|--------|-------------------------------------------------|--------|--------|----------------------------------|----------|--------|---------------------------|--------|----------|---------------------------------|--------|
| Predecessor                                                                     |   |     |     |   |       |   |     |   |   |   |                                            |   |   |                             |     |   |                      |   |     |                            |   |
| Balance      at January 1,2005                                                  |   | $        | 642      |   |       | $      | 938      |   |   | $      | 1,580                                           |   |   | $                                | (19      | )      |                      | $      | - -      |                            |   | $ | 1,561 |   |   |   |   |
| Net      income                                                                 |   |     | 527      |   |       |   | 221      |   |   |   | 748                                             |   |   |                             | -      - |   |                      |   | -      - |                            |   |   | 748 |   |   | $ | 748 |   |
| Other      comprehensiveincome:                                                 |   |     |     |   |       |   |     |   |   |   |                                            |   |   |                             |     |   |                      |   |     |                            |   |   |   |   |   |   |   |   |
| Minimum      pension liability                                                  |   |     | -      - |   |       |   | -      - |   |   |   | -      -                                        |   |   |                             | 1        |   |                      |   | -      - |                            |   |   | 1 |   |   |   | 1 |   |
| Derivative      instruments                                                     |   |     | -      - |   |       |   | -      - |   |   |   | -      -                                        |   |   |                             | (2       | )      |                      |   | -      - |                            |   |   | (2 | ) |   |   | (2 | ) |
| Distributions      to partners                                                  |   |     | (511     | )      |       |   | (214     | )      |   |   | (725                                            | )      |   |                             | -      - |   |                      |   | -      - |                            |   |   | (725 | ) |   |   |   |   |
| Comprehensive      income                                                       |   |     |     |   |       |   |     |   |   |   |                                            |   |   |                             |     |   |                      |   |     |                            |   |   |   |   |   | $ | 747 |   |
| Balance      at December 31,2005                                           |   | $        | 658      |   |       | $      | 945      |   |   | $      | 1,603                                           |   |   | $                                | (20      | )      |                      | $      | - -      |                            |   | $ | 1,583 |   |   |   |   |   |
| Net      income                                                                 |   |     | 433      |   |       |   | 181      |   |   |   | 614                                             |   |   |                             | -      - |   |                      |   | -      - |                            |   |   | 614 |   |   | $ | 614 |   |
| Other      comprehensive income:                                                |   |     |     |   |       |   |     |   |   |   |                                            |   |   |                             |     |   |                      |   |     |                            |   |   |   |   |   |   |   |   |
| Minimum      pension liability                                                  |   |     | -      - |   |       |   | -      - |   |   |   | -      -                                        |   |   |                             | 5        |   |                      |   | -      - |                            |   |   | 5 |   |   |   | 5 |   |
| Change      in accounting forpension      and otherpostretirement      benefits |   |     | -      - |   |       |   | -      - |   |   |   | -      -                                        |   |   |                             | (23      | )      |                      |   | -      - |                            |   |   | (23 | ) |   |   | -      - |   |
| Distributions      to partners                                                  |   |     | (405     | )      |       |   | (170     | )      |   |   | (575                                            | )      |   |                             | -      - |   |                      |   | -      - |                            |   |   | (575 | ) |   |   |   |   |
| Comprehensive      income                                                       |   |     |     |   |       |   |     |   |   |   |                                            |   |   |                             |     |   |                      |   |     |                            |   |   |   |   |   | $ | 619 |   |
| Balance      at December 31, 2006                                          |   | $        | 686      |   |       | $      | 956      |   |   | $      | 1,642                                           |   |   | $                                | (38      | )      |                      | $      | - -      |                            |   | $ | 1,604 |   |   |   |   |   |
| Net      loss                                                                   |   |     | (152     | )      |       |   | (64      | )      |   |   | (216                                            | )      |   |                             | -      - |   |                      |   | -      - |                            |   |   | (216 | ) |   | $ | (216 | ) |
| Other      comprehensive income:                                                |   |     |     |   |       |   |     |   |   |   |                                            |   |   |                             |     |   |                      |   |     |                            |   |   |   |   |   |   |   |   |
| Pension      and other postretirement benefits                                  |   |     | -      - |   |       |   | -      - |   |   |   | -      -                                        |   |   |                             | 2        |   |                      |   | -      - |                            |   |   | 2 |   |   |   | -      - |   |
| Contributions      from partners                                                |   |     | 1,703    |   |       |   | -      - |   |   |   | 1,703                                           |   |   |                             | -      - |   |                      |   | -      - |                            |   |   | 1,703 |   |   |   | -      - |   |
| Distributions      to partners                                                  |   |     | (70      | )      |       |   | (30      | )      |   |   | (100                                            | )      |   |                             | -      - |   |                      |   | -      - |                            |   |   | (100 | ) |   |   |   |   |
| Comprehensive      income                                                       |   |     |     |   |       |   |     |   |   |   |                                            |   |   |                             |     |   |                      |   |     |                            |   |   |   |   |   | $ | (216 | ) |
| Balance      at December 20, 2007                                          |   | $        | 2,167    |   |       | $      | 862      |   |   | $      | 3,029                                           |   |   | $                                | (36      | )      |                      | $      | - -      |                            |   | $ | 2,993 |   |   |   |   |   |
| Successor                                                                       |   |     |     |   |       |   |     |   |   |   |                                            |   |   |                             |     |   |                      |   |     |                            |   |   |   |   |   |   |   |   |
| Beginning      balance                                                          |   | $        | 6,144    |   |       | $      | 1,667    |   |   | $      | 7,811                                           |   |   | $                                | - -      |   |                      | $      | - -      |                            |   | $ | 7,811 |   |   |   |   |   |
| Effects      of push-down debt                                                  |   |     | -      - |   |       |   | -      - |   |   |   | -      -                                        |   |   |                             | -      - |   |                      |   | (17,301  | )                               |   |   | (17,301 | ) |   | $ | - - |   |
| Net      loss                                                                   |   |     | (51      | )      |       |   | (14      | )      |   |   | (65                                             | )      |   |                             | -      - |   |                      |   | (57      | )                               |   |   | (122 | ) |   |   | (122 | ) |
| Comprehensive      income                                                       |   |     |     |   |       |   |     |   |   |   |                                            |   |   |                             |     |   |                      |   |     |                            |   |   |   |   |   | $ | (122 | ) |
| Balance      at December 31, 2007                                          |   | $        | 6,093    |   |       | $      | 1,653    |   |   | $      | 7,746                                           |   |   | $                                | - -      |   |                      | $      | (17,358  | )                               |   | $ | (9,612 | ) |   |   |   |   |

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Index to the Consolidated FinancialStatements

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

|      |  Page                                                          |
|-----------|---------------------------------------------------------------------|
|  1.  |  Basis of Presentation                                         |  56 |
|  2.  |  Summary of Significant Accounting      Policies               |  57 |
|  3.  |  Acquisition of Lyondell by LyondellBasell      Industries     |  59 |
|  4.  |  Asset Impairment                                              |  61 |
|  5.  |  Hurricane Effects                                             |  61 |
|  6.  |  Related Party Transactions                                    |  61 |
|  7.  |  Accounts Receivable                                           |  65 |
|  8.  |  Inventories                                                   |  65 |
|  9.  |  Property, Plant and Equipment, Goodwill and Other      Assets |  66 |
|  10. |  Accounts Payable                                              |  68 |
|  11. |  Accrued Liabilities                                           |  68 |
|  12. |  Deferred Revenues                                             |  68 |
|  13. |  Long-Term Debt                                                |  69 |
|  14. |  Lease Commitments                                             |  71 |
|  15. |  Financial Instruments andDerivatives                          |  71 |
|  16. |  Pension and Other Postretirement      Benefits                |  72 |
|  17. |  Commitments and Contingencies                                 |  77 |
|  18. |  Partners’    Capital (Deficit)                     |  78 |
|  19. |  Supplemental Cash Flow      Information                       |  78 |
|  20. |  Segment and Related Information                               |  79 |

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Basis of Presentation

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Index to the Consolidated Financial Statements

Summary of Significant AccountingPolicies

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Index to the Consolidated Financial Statements

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Acquisition of Lyondell by LyondellBasellIndustries

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Index to the Consolidated Financial Statements

| Millions of      dollars                                            |   |   |   |
|---------------------------------------------------------------------|--------|--------|--------|
| Allocated      purchase price                                       |   | $      | 7,811  |   |
| Book      value of Equistar net assets acquired                     |   |   | 2,993  |   |
| Excess      purchase price to allocate                              |   |   | 4,818  |   |
|                                                                |   |   |   |   |
| Allocation      of excess purchase price to assets and liabilities: |   |   |   |   |
| Inventories                                                         |   |   | 975    |   |
| Plant,      property and equipment                                  |   |   | 2,288  |   |
| Investments      and joint ventures                                 |   |   | 13     |   |
| Other      identifiable intangibles                                 |   |   | 703    |   |
| Purchased      in-process research and development                  |   |   | 22     |   |
| Other,      net                                                     |   |   | 67     |   |
| Goodwill                                                            |   | $      | 750    |   |

| Millions of      dollars                |   | For      theperiod      fromJanuary 1throughDecember 20,2007 |   |   | For      the yearendedDecember 31,2006 |   |
|-----------------------------------------|--------|------------------------------------------------------------------------|--------|--------|---------------------------------------------|--------|
| Sales      and other operating revenues |   | $                                                                      | 13,037 |   |                                        | $      | 12,765 |   |
| Operating      income (loss)            |   |                                                                   | (67    | )      |                                        |   | 583 |   |
| Net      loss                           |   |                                                                   | (1,880 | )      |                                        |   | (1,262 | ) |

----

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Index to the Consolidated Financial Statements

Asset Impairment

Hurricane Effects

Related Party Transactions

----

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Index to the Consolidated Financial Statements

----

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Index to the Consolidated Financial Statements

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Index to the Consolidated Financial Statements

|                                                   |   | Successor                                                            |     |   | Predecessor                                                        |   |
|--------------------------------------------------------|--------|----------------------------------------------------------------------|----------|--------|--------------------------------------------------------------------|--------|
| Millions of      dollars                               |   | For      theperiod      fromDecember      21throughDecember      31, |     |   | For      theperiod      fromJanuary      1throughDecember      20, |   |   | For      the year ended December 31, |   |
|                                                   | 2007   |                                                                 |     | 2007   |                                                               |   | 2006 |   |   | 2005 |   |
|                                                   |   |                                                                 |     |   |                                                               |   |   |   |   |   |   |   |
| Equistar billed      related parties for:              |   |                                                                 |     |   |                                                               |   |   |   |   |   |   |   |
| Sales      of products and processing services:        |   |                                                                 |     |   |                                                               |   |   |   |   |   |   |   |
| Lyondell                                               |   | $                                                                    | 54       |   |                                                               | $      | 1,741 |   |   | $ | 1,467 |   |   | $ | 1,202 |   |
| Houston      Refining                                  |   |                                                                 | 30       |   |                                                               |   | 968 |   |   |   | 842 |   |   |   | 944 |   |
| Occidental                                             |   |                                                                 | 25       |   |                                                               |   | 753 |   |   |   | 780 |   |   |   | 755 |   |
| Millennium                                             |   |                                                                 | 4        |   |                                                               |   | 93 |   |   |   | 40 |   |   |   | 53 |   |
| Basell      Group                                      |   |                                                                 | 2        |   |                                                               |   | 31 |   |   |   | -      - |   |   |   | -      - |   |
|                                                   |   |                                                                 |     |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Shared      services and shared site agreements:       |   |                                                                 |     |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Millennium                                             |   |                                                                 | 1        |   |                                                               |   | 25 |   |   |   | 16 |   |   |   | 27 |   |
| Lyondell                                               |   |                                                                 | -      - |   |                                                               |   | 16 |   |   |   | 24 |   |   |   | 20 |   |
| Houston      Refining                                  |   |                                                                 | -      - |   |                                                               |   | -      - |   |   |   | 5 |   |   |   | 4 |   |
|                                                   |   |                                                                 |     |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Interest      – Lyondell                         |   |                                                                 | 2        |   |                                                               |   | -      - |   |   |   | -      - |   |   |   | -      - |   |
|                                                   |   |                                                                 |     |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Related parties billed      Equistar for:              |   |                                                                 |     |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Purchases      of products:                            |   |                                                                 |     |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Houston      Refining                                  |   | $                                                                    | 39       |   |                                                               | $      | 970 |   |   | $ | 928 |   |   | $ | 394 |   |
| Lyondell                                               |   |                                                                 | 15       |   |                                                               |   | 411 |   |   |   | 352 |   |   |   | 307 |   |
| Millennium                                             |   |                                                                 | -      - |   |                                                               |   | 10 |   |   |   | 9 |   |   |   | 8 |   |
| Occidental                                             |   |                                                                 | 1        |   |                                                               |   | 28 |   |   |   | 33 |   |   |   | 20 |   |
| Basell      Group                                      |   |                                                                 | -      - |   |                                                               |   | 3 |   |   |   | -      - |   |   |   | -      - |   |
|                                                   |   |                                                                 |     |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Shared      services, transition and lease agreements: |   |                                                                 |     |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Lyondell                                               |   |                                                                 | 11       |   |                                                               |   | 271 |   |   |   | 209 |   |   |   | 183 |   |
| Millennium                                             |   |                                                                 | -      - |   |                                                               |   | 1 |   |   |   | 1 |   |   |   | 1 |   |
| Occidental                                             |   |                                                                 | -      - |   |                                                               |   | 7 |   |   |   | 7 |   |   |   | 7 |   |
| Houston      Refining                                  |   |                                                                 | -      - |   |                                                               |   | -      - |   |   |   | 1 |   |   |   | 1 |   |
|                                                   |   |                                                                 |     |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Interest      - Millennium                             |   |                                                                 | -      - |   |                                                               |   | 16 |   |   |   | -      - |   |   |   | -      - |   |

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Index to the Consolidated Financial Statements

Accounts Receivable

Inventories

|                        |   | Successor |   |   | Predecessor |   |
|-----------------------------|--------|-----------|--------|--------|-------------|--------|
| Millions of      dollars    |   | 2007      |   |   | 2006        |   |
| Finished      goods         |   | $         | 902    |   |        | $      | 452 |   |
| Work-in-process             |   |      | 40     |   |        |   | 14 |   |
| Raw      materials          |   |      | 650    |   |        |   | 225 |   |
| Materials      and supplies |   |      | 162    |   |        |   | 118 |   |
| Total      inventories      |   | $         | 1,754  |   |        | $      | 809 |   |

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Index to the Consolidated Financial Statements

Property, Plant and Equipment, Goodwill and OtherAssets

|                                        |   | Successor |   |   | Predecessor |   |
|---------------------------------------------|--------|-----------|--------|--------|-------------|--------|
| Millions of      dollars                    |   | 2007      |   |   | 2006        |   |
| Land                                        |   | $         | 46     |   |        | $      | 85 |   |
| Manufacturing      facilities and equipment |   |      | 4,890  |   |        |   | 6,093 |   |
| Construction      in progress               |   |      | 193    |   |        |   | 141 |   |
| Total      property, plant and equipment    |   |      | 5,129  |   |        |   | 6,319 |   |
| Less      accumulated depreciation          |   |      | (13    | )      |        |   | (3,473 | ) |
| Property,      plant and equipment, net     |   | $         | 5,116  |   |        | $      | 2,846 |   |

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Index to the Consolidated Financial Statements

|                                           |   | Successor |   |   | Predecessor             |   |
|------------------------------------------------|--------|-----------|--------|--------|-------------------------|--------|
|                                           |   | 2007      |   |   | 2006                    |   |
| Millions of      dollars                       |   | Cost      |   |   | AccumulatedAmortization |   |   | Net |   |   | Cost |   |   | AccumulatedAmortization |   |   | Net |   |
| Identifiable      intangible assets:           |   |      |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Emission      credits                          |   | $         | 486    |   |                    | $      | - - |   |   | $ | 486 |   |   | $ | 35 |   |   | $ | - - |   |   | $ | 35 |   |
| Various      contracts                         |   |      | 211    |   |                    |   | (1 | ) |   |   | 210 |   |   |   | -      - |   |   |   | -      - |   |   |   | -      - |   |
| Turnaround      costs                          |   |      | 190    |   |                    |   | (2 | ) |   |   | 188 |   |   |   | 324 |   |   |   | (157 | ) |   |   | 167 |   |
| Technology,      patents and licenses          |   |      | 30     |   |                    |   | -      - |   |   |   | 30 |   |   |   | -      - |   |   |   | -      - |   |   |   | -      - |   |
| Software      costs                            |   |      | 32     |   |                    |   | -      - |   |   |   | 32 |   |   |   | 100 |   |   |   | (68 | ) |   |   | 32 |   |
| Debt      issuance costs                       |   |      | 4      |   |                    |   | -      - |   |   |   | 4 |   |   |   | 46 |   |   |   | (28 | ) |   |   | 18 |   |
| Debt      issuance costs onPush-down      debt |   |      | 340    |   |                    |   | (6 | ) |   |   | 334 |   |   |   | -      - |   |   |   | -      - |   |   |   | -      - |   |
| Catalyst      costs                            |   |      | 11     |   |                    |   | -      - |   |   |   | 11 |   |   |   | 44 |   |   |   | (31 | ) |   |   | 13 |   |
| Other                                          |   |      | 37     |   |                    |   | -      - |   |   |   | 37 |   |   |   | 44 |   |   |   | (24 | ) |   |   | 20 |   |
| Total      intangible assets                   |   | $         | 1,341  |   |                    | $      | (9 | ) |   |   | 1,332 |   |   | $ | 593 |   |   | $ | (308 | ) |   |   | 285 |   |
| Pension      asset                             |   |      |   |   |                    |   |   |   |   |   | 8 |   |   |   |   |   |   |   |   |   |   |   | 6 |   |
| Other                                          |   |      |   |   |                    |   |   |   |   |   | 4 |   |   |   |   |   |   |   |   |   |   |   | 5 |   |
| Total      other assets, net                   |   |      |   |   |                    |   |   |   |   | $ | 1,344 |   |   |   |   |   |   |   |   |   |   | $ | 296 |   |

|                                     |   | Successor                                                            |     |   | Predecessor                                                        |   |
|------------------------------------------|--------|----------------------------------------------------------------------|----------|--------|--------------------------------------------------------------------|--------|
| Millions of      dollars                 |   | For      theperiod      fromDecember      21throughDecember      31, |     |   | For      theperiod      fromJanuary      1throughDecember      20, |   |   | For      the year ended December      31, |   |
|                                     | 2007   |                                                                 |     | 2007   |                                                               |   | 2006 |   |   | 2005 |   |
| Property,      plant and equipment       |   | $                                                                    | 14       |   |                                                               | $      | 249 |   |   | $ | 254 |   |   | $ | 254 |   |
| Turnaround      costs                    |   |                                                                 | 2        |   |                                                               |   | 43 |   |   |   | 40 |   |   |   | 38 |   |
| Software      costs                      |   |                                                                 | -      - |   |                                                               |   | 11 |   |   |   | 17 |   |   |   | 18 |   |
| Other                                    |   |                                                                 | 1        |   |                                                               |   | 12 |   |   |   | 13 |   |   |   | 12 |   |
| Total      depreciation and amortization |   | $                                                                    | 17       |   |                                                               | $      | 315 |   |   | $ | 324 |   |   | $ | 322 |   |

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Index to the Consolidated Financial Statements

Accounts Payable

Accrued Liabilities

|                                           |   | Successor |   |   | Predecessor |   |
|------------------------------------------------|--------|-----------|--------|--------|-------------|--------|
| Millions of      dollars                       |   | 2007      |   |   | 2006        |   |
| Payroll      and benefits                      |   | $         | 131    |   |        | $      | 92 |   |
| Pension      and other postretirement benefits |   |      | 7      |   |        |   | 7 |   |
| Taxes      other than income taxes             |   |      | 70     |   |        |   | 68 |   |
| Interest                                       |   |      | 5      |   |        |   | 60 |   |
| Product      sales rebates                     |   |      | 36     |   |        |   | 28 |   |
| Deferred      revenues                         |   |      | 26     |   |        |   | 36 |   |
| Other                                          |   |      | 20     |   |        |   | 21 |   |
| Total      accrued liabilities                 |   | $         | 295    |   |        | $      | 312 |   |

Deferred Revenues

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Index to the Consolidated Financial Statements

Long-Term Debt

| Millions of      dollars                                 |   |   |   |
|----------------------------------------------------------|--------|--------|--------|
| Term      loan A due 2013                                |   | $      | 1,500  |   |
| Term      loan B due 2014 ($75 million of discount) |   |   | 7,475  |   |
| Interim      Loan                                        |   |   | 8,000  |   |
| Total      long-term debt                                |   |   | 16,975 |   |
| Less      current maturities                             |   |   | (146   | ) |
| Total      long-term debt, net                           |   | $      | 16,829 |   |

|                                                      |   | Successor |     |   | Predecessor |   |
|-----------------------------------------------------------|--------|-----------|----------|--------|-------------|--------|
| Millions of      dollars                                  |   | 2007      |     |   | 2006        |   |
| Senior      Notes due 2008, 10.125%                       |   | $         | 8        |   |        | $      | 700 |   |
| Senior      Notes due 2011, 10.625%                       |   |      | 4        |   |        |   | 707 |   |
| Debentures      due 2026, 7.55% ($21 million of discount) |   |      | 129      |   |        |   | 150 |   |
| Notes      due 2009, 8.75%                                |   |      | 15       |   |        |   | 600 |   |
| Other                                                     |   |      | -      - |   |        |   | 3 |   |
| Total      long-term debt                                 |   |      | 156      |   |        |   | 2,160 |   |
| Less      current maturities                              |   |      | (27      | )      |        |   | -      - |   |
| Total      long-term debt, net                            |   | $         | 129      |   |        | $      | 2,160 |   |

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Index to the Consolidated Financial Statements

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Index to the Consolidated Financial Statements

Lease Commitments

| Millions of      dollars          |   |   |   |
|-----------------------------------|--------|--------|--------|
| 2008                              |   | $      | 89     |   |
| 2009                              |   |   | 79     |   |
| 2010                              |   |   | 70     |   |
| 2011                              |   |   | 56     |   |
| 2012                              |   |   | 51     |   |
| Thereafter                        |   |   | 322    |   |
| Total      minimum lease payments |   | $      | 667    |   |

Financial Instruments and Derivatives

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Index to the Consolidated Financial Statements

Pension and Other Postretirement Benefits

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Index to the Consolidated Financial Statements

|                                                                                                                     |   | Pension      Benefits |     |   | OtherPostretirement      Benefits |   |
|--------------------------------------------------------------------------------------------------------------------------|--------|-----------------------|----------|--------|-----------------------------------|--------|
| Millions of      dollars                                                                                                 |   | 2007                  |     |   | 2006                              |   |   | 2007 |   |   | 2006 |   |
| Change      in benefit obligation:                                                                                       |   |                  |     |   |                              |   |   |   |   |   |   |   |
| Benefit      obligation, January 1                                                                                       |   | $                     | 275      |   |                              | $      | 256 |   |   | $ | 106 |   |   | $ | 110 |   |
| Service      cost                                                                                                        |   |                  | 22       |   |                              |   | 23 |   |   |   | 2 |   |   |   | 3 |   |
| Interest      cost                                                                                                       |   |                  | 15       |   |                              |   | 14 |   |   |   | 6 |   |   |   | 5 |   |
| Actuarial      gain                                                                                                      |   |                  | (13      | )      |                              |   | (8 | ) |   |   | (6 | ) |   |   | (7 | ) |
| Benefits      paid                                                                                                       |   |                  | (14      | )      |                              |   | (10 | ) |   |   | (5 | ) |   |   | (5 | ) |
| Benefit      obligation, December 31                                                                                |   |                  | 285      |   |                              |   | 275 |   |   |   | 103 |   |   |   | 106 |   |
| Change      in plan assets:                                                                                              |   |                  |     |   |                              |   |   |   |   |   |   |   |   |   |   |   |
| Fair      value of plan assets, January 1                                                                                |   |                  | 229      |   |                              |   | 169 |   |   |   |   |   |   |   |   |   |
| Actual      return on plan assets                                                                                        |   |                  | 18       |   |                              |   | 20 |   |   |   |   |   |   |   |   |   |
| Partnership      contributions                                                                                           |   |                  | 41       |   |                              |   | 50 |   |   |   |   |   |   |   |   |   |
| Benefits      paid                                                                                                       |   |                  | (14      | )      |                              |   | (10 | ) |   |   |   |   |   |   |   |   |
| Fair      value of plan assets, December 31                                                                         |   |                  | 274      |   |                              |   | 229 |   |   |   |   |   |   |   |   |   |
| Funded      status, December 31                                                                                          |   |                  | (11      | )      |                              |   | (46 | ) |   |   | (103 | ) |   |   | (106 | ) |
|                                                                                                                     |   |                  |     |   |                              |   |   |   |   |   |   |   |   |   |   |   |
| Amounts      not recognized in benefit costs:                                                                            |   |                  |     |   |                              |   |   |   |   |   |   |   |   |   |   |   |
| Actuarial      and investment gain (loss)                                                                                |   |                  | -      - |   |                              |   | 46 |   |   |   | -      - |   |   |   | (5 | ) |
| Prior      service benefit                                                                                               |   |                  | -      - |   |                              |   | (1 | ) |   |   | -      - |   |   |   | (2 | ) |
| Net      amount recognized in benefit costs                                                                              |   | $                     | (11      | )      |                              | $      | (1 | ) |   | $ | (103 | ) |   | $ | (113 | ) |
|                                                                                                                     |   |                  |     |   |                              |   |   |   |   |   |   |   |   |   |   |   |
| Amounts      recognized in theConsolidated      Balance Sheets consist of:                                               |   |                  |     |   |                              |   |   |   |   |   |   |   |   |   |   |   |
| Prepaid      benefit cost                                                                                                |   | $                     | 8        |   |                              | $      | 5 |   |   | $ | - - |   |   | $ | - - |   |
| Accrued      benefit liability, current                                                                                  |   |                  | -      - |   |                              |   | -      - |   |   |   | (6 | ) |   |   | (6 | ) |
| Accrued      benefit liability, long-term                                                                                |   |                  | (19      | )      |                              |   | (51 | ) |   |   | (97 | ) |   |   | (100 | ) |
| Funded      status, December 31,                                                                                         |   | $                     | (11      | )      |                              | $      | (46 | ) |   | $ | (103 | ) |   | $ | (106 | ) |
| Accumulated      other comprehensive(income)      loss                                                                   |   |                  | -      - |   |                              |   | 45 |   |   |   | -      - |   |   |   | (7 | ) |
| Net      amount recognized in benefit costs                                                                              |   | $                     | (11      | )      |                              | $      | (1 | ) |   | $ | (103 | ) |   | $ | (113 | ) |
|                                                                                                                     |   |                  |     |   |                              |   |   |   |   |   |   |   |   |   |   |   |
| Additional      Information:                                                                                             |   |                  |     |   |                              |   |   |   |   |   |   |   |   |   |   |   |
| Accumulated      benefit obligationfor      defined benefit plans, December 31                                      |   | $                     | 234      |   |                              | $      | 224 |   |   |   |   |   |   |   |   |   |
| Decrease      in minimum liability, prior toapplication      of SFAS No. 158, included inother      comprehensive income |   |                  | -      - |   |                              |   | (5 | ) |   |   |   |   |   |   |   |   |

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Index to the Consolidated Financial Statements

| Millions of      dollars          |   | 2007   |   |   | 2006   |   |
|-----------------------------------|--------|--------|--------|--------|--------|--------|
| Projected      benefit obligation |   | $      | 214    |   |   | $      | 257 |   |
| Fair      value of assets         |   |   | 195    |   |   |   | 205 |   |

| Millions of      dollars            |   | 2007   |     |   | 2006   |   |
|-------------------------------------|--------|--------|----------|--------|--------|--------|
| Accumulated      benefit obligation |   | $      | 6        |   |   | $      | 61 |   |
| Fair      value of assets           |   |   | -      - |   |   |   | 48 |   |

|                                                                   |   | Successor                                                            |     |   | Predecessor                                                        |   |
|------------------------------------------------------------------------|--------|----------------------------------------------------------------------|----------|--------|--------------------------------------------------------------------|--------|
| Millions of      dollars                                               |   | For      theperiod      fromDecember      21throughDecember      31, |     |   | For      theperiod      fromJanuary      1throughDecember      20, |   |   | For      the year endedDecember      31, |   |
|                                                                   | 2007   |                                                                 |     | 2007   |                                                               |   | 2006 |   |   | 2005 |   |
| Net      periodic pension cost:                                        |   |                                                                 |     |   |                                                               |   |   |   |   |   |   |   |
| Service      cost                                                      |   | $                                                                    | 1        |   |                                                               | $      | 22 |   |   | $ | 23 |   |   | $ | 21 |   |
| Interest      cost                                                     |   |                                                                 | 1        |   |                                                               |   | 14 |   |   |   | 14 |   |   |   | 13 |   |
|                                                                   |   |                                                                 |     |   |                                                               |   |   |   |   |   |   |   |   |   |   |   |
| Actual      return on plan assets                                      |   |                                                                 | (1       | )      |                                                               |   | (17 | ) |   |   | (20 | ) |   |   | (10 | ) |
| Less-return      in excess of (less than) expected return              |   |                                                                 | -      - |   |                                                               |   | -      - |   |   |   | 6 |   |   |   | (2 | ) |
| Expected      return on plan assets                                    |   |                                                                 | (1       | )      |                                                               |   | (17 | ) |   |   | (14 | ) |   |   | (12 | ) |
| Actuarial      and         investment loss amortization |   |                                                                 | -      - |   |                                                               |   | 3 |   |   |   | 5 |   |   |   | 6 |   |
| Net      periodic pension cost                                         |   | $                                                                    | 1        |   |                                                               | $      | 22 |   |   | $ | 28 |   |   | $ | 28 |   |

----

Table of Contents

Index to the Consolidated Financial Statements

|                                                 |   | Successor                                                            |     |   | Predecessor                                                        |   |
|------------------------------------------------------|--------|----------------------------------------------------------------------|----------|--------|--------------------------------------------------------------------|--------|
| Millions of      dollars                             |   | For      theperiod      fromDecember      21throughDecember      31, |     |   | For      theperiod      fromJanuary      1throughDecember      20, |   |   | For      the year endedDecember      31, |   |
|                                                 | 2007   |                                                                 |     | 2007   |                                                               |   | 2006 |   |   | 2005 |   |
| Net      periodic other postretirement benefit cost: |   |                                                                 |     |   |                                                               |   |   |   |   |   |   |   |
| Service      cost                                    |   | $                                                                    | - -      |   |                                                               | $      | 2 |   |   | $ | 3 |   |   | $ | 3 |   |
| Interest      cost                                   |   |                                                                 | -      - |   |                                                               |   | 6 |   |   |   | 5 |   |   |   | 6 |   |
| Prior      service cost amortization                 |   |                                                                 | -      - |   |                                                               |   | -      - |   |   |   | -      - |   |   |   | 2 |   |
| Net      periodic other postretirement benefit cost  |   | $                                                                    | - -      |   |                                                               | $      | 8 |   |   | $ | 8 |   |   | $ | 11 |   |

|                                                     |   | Pension      Benefits |   |   | Other      Postretirement Benefits |   |
|----------------------------------------------------------|--------|-----------------------|--------|--------|------------------------------------|--------|
|                                                     |   | 2007                  |   |   | 2006                               |   |   | 2007 |   |   | 2006 |   |
| Weighted-average      assumptions as ofDecember      31: |   |                  |   |   |                               |   |   |   |   |   |   |   |
| Discount      rate                                       |   |                  | 6.25   | %      |                               |   | 5.75 | % |   |   | 6.25 | % |   |   | 5.75 | % |
| Rate      of compensation increase                       |   |                  | 4.50   | %      |                               |   | 4.50 | % |   |   | 4.50 | % |   |   |   |   |

|                                                |   | Pension      Benefits |   |   | Other      Postretirement Benefits |   |
|-----------------------------------------------------|--------|-----------------------|--------|--------|------------------------------------|--------|
|                                                |   | 2007                  |   |   | 2006                               |   |   | 2005 |   |   | 2007 |   |   | 2006 |   |   | 2005 |   |
| Weighted-average      assumptionsfor      the year: |   |                  |   |   |                               |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Discount      rate                                  |   |                  | 5.75   | %      |                               |   | 5.50 | % |   |   | 5.75 | % |   |   | 5.75 | % |   |   | 5.50 | % |   |   | 5.75 | % |
| Expected      return on plan assets                 |   |                  | 8.00   | %      |                               |   | 8.00 | % |   |   | 8.00 | % |   |   |   |   |   |   |   |   |   |   |   |   |
| Rate      of compensation increase                  |   |                  | 4.50   | %      |                               |   | 4.50 | % |   |   | 4.50 | % |   |   |   |   |   |   |   |   |   |   |   |   |

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Index to the Consolidated Financial Statements

| Asset      Category             |   | 2007      Policy |   |   | 2007   |   |   | 2006 |   |
|---------------------------------|--------|------------------|--------|--------|--------|--------|--------|------|--------|
| U.S.      equity securities     |   |             | 55     | %      |   |   | 56     | %    |   |   | 56 | % |
| Non-U.S.      equity securities |   |             | 15     | %      |   |   | 16     | %    |   |   | 17 | % |
| Fixed      income securities    |   |             | 25     | %      |   |   | 24     | %    |   |   | 27 | % |
| Real      estate investments    |   |             | 5      | %      |   |   | 4      | %    |   |   | -      - |   |
| Total                           |   |             | 100    | %      |   |   | 100    | %    |   |   | 100 | % |

| Millions of      dollars |   | Pension      Benefits |   |   | OtherBenefits |   |
|--------------------------|--------|-----------------------|--------|--------|---------------|--------|
| 2008                     |   | $                     | 18     |   |          | $      | 7 |   |
| 2009                     |   |                  | 19     |   |          |   | 7 |   |
| 2010                     |   |                  | 19     |   |          |   | 8 |   |
| 2011                     |   |                  | 20     |   |          |   | 8 |   |
| 2012                     |   |                  | 21     |   |          |   | 8 |   |
| 2013      through 2017   |   |                  | 122    |   |          |   | 41 |   |

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Index to the Consolidated Financial Statements

Commitments and Contingencies

| Millions of      dollars             |   |   |   |
|--------------------------------------|--------|--------|--------|
| 2008                                 |   | $      | 304    |   |
| 2009                                 |   |   | 291    |   |
| 2010                                 |   |   | 280    |   |
| 2011                                 |   |   | 278    |   |
| 2012                                 |   |   | 277    |   |
| Thereafter      through 2023         |   |   | 2,272  |   |
| Total      minimum contract payments |   | $      | 3,702  |   |

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Index to the Consolidated Financial Statements

Partners’ Capital (Deficit)

Supplemental Cash Flow Information

|                                              |   | Predecessor                                                    |   |
|---------------------------------------------------|--------|----------------------------------------------------------------|--------|
| Millions of      dollars                          |   | For      the periodfrom      January 1throughDecember      20, |   |   | For      the year endedDecember      31, |   |
|                                              | 2007   |                                                           |   | 2006 |   |   | 2005 |   |
| Cash      paid for interest                       |   | $                                                              | 233    |   |   | $ | 216 |   |   | $ | 221 |   |
| Cash      paid for interest – related party |   |                                                           | 15     |   |   |   | -      - |   |   |   | -      - |   |
| Total                                             |   | $                                                              | 248    |   |   | $ | 216 |   |   | $ | 221 |   |

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Segment and Related Information

| ·   | Chemicals,      primarily manufacturing and marketing of ethylene; its co-products,      including propylene, butadiene and aromatics, which include benzene and      toluene; ethylene derivatives, including ethylene glycol, ethylene oxide      (“EO”), and other EO derivatives, as well as ethanol; gasoline blending      components such as MTBE and alkylate;and |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Polymers,      including manufacturing and marketing of polyethylene, including high      density polyethylene, low density polyethylene and linear low density      polyethylene, and polypropylene. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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Index to the Consolidated Financial Statements

| Millions of      dollars                   |   | Chemicals |   |   | Polymers |   |     | Other  |   |   | Consolidated |   |
|--------------------------------------------|--------|-----------|--------|--------|----------|--------|----------|--------|--------|--------|--------------|--------|
| 2007                                       |   |      |   |   |     |   |     |   |   |   |         |   |
| Sales      and other operating revenues    |   |      |   |   |     |   |     |   |   |   |         |   |
| Customers                                  |   | $         | 9,999  |   |     | $      | 3,495    |   |   | $      | - -          |   |   | $ | 13,494 |   |
| Intersegment                               |   |      | 2,432  |   |     |   | -      - |   |   |   | (2,432       | )      |   |   | -      - |   |
|                                       |   |      | 12,431 |   |     |   | 3,495    |   |   |   | (2,432       | )      |   |   | 13,494 |   |
|                                       |   |      |   |   |     |   |     |   |   |   |         |   |   |   |   |   |
| Segment      operating income (loss)       |   |      | 379    |   |     |   | 156      |   |   |   | (22          | )      |   |   | 513 |   |
| Adjustment      to LIFO basis              |   |      |   |   |     |   |     |   |   |   |         |   |   |   | (498 | ) |
| Operating      income                      |   |      |   |   |     |   |     |   |   |   |         |   |   |   | 15 |   |
| Capital      expenditures                  |   |      | 219    |   |     |   | 19       |   |   |   | 2            |   |   |   | 240 |   |
| Depreciation      and amortization expense |   |      | 268    |   |     |   | 62       |   |   |   | 2            |   |   |   | 332 |   |
|                                       |   |      |   |   |     |   |     |   |   |   |         |   |   |   |   |   |
| 2006                                       |   |      |   |   |     |   |     |   |   |   |         |   |   |   |   |   |
| Sales      and other operating revenues    |   |      |   |   |     |   |     |   |   |   |         |   |   |   |   |   |
| Customers                                  |   | $         | 9,341  |   |     | $      | 3,424    |   |   | $      | - -          |   |   | $ | 12,765 |   |
| Intersegment                               |   |      | 2,227  |   |     |   | -      - |   |   |   | (2,227       | )      |   |   | -      - |   |
|                                       |   |      | 11,568 |   |     |   | 3,424    |   |   |   | (2,227       | )      |   |   | 12,765 |   |
|                                       |   |      |   |   |     |   |     |   |   |   |         |   |   |   |   |   |
| Segment      operating income              |   |      | 689    |   |     |   | 137      |   |   |   | -      -     |   |   |   | 826 |   |
| Adjustment      to LIFO basis              |   |      |   |   |     |   |     |   |   |   |         |   |   |   | (2 | ) |
| Operating      income                      |   |      |   |   |     |   |     |   |   |   |         |   |   |   | 824 |   |
| Capital      expenditures                  |   |      | 149    |   |     |   | 19       |   |   |   | -      -     |   |   |   | 168 |   |
| Depreciation      and amortization expense |   |      | 258    |   |     |   | 63       |   |   |   | 3            |   |   |   | 324 |   |
|                                       |   |      |   |   |     |   |     |   |   |   |         |   |   |   |   |   |
| 2005                                       |   |      |   |   |     |   |     |   |   |   |         |   |   |   |   |   |
| Sales      and other operating revenues    |   |      |   |   |     |   |     |   |   |   |         |   |   |   |   |   |
| Customers                                  |   | $         | 8,576  |   |     | $      | 3,110    |   |   | $      | - -          |   |   | $ | 11,686 |   |
| Intersegment                               |   |      | 2,125  |   |     |   | -      - |   |   |   | (2,125       | )      |   |   | -      - |   |
|                                       |   |      | 10,701 |   |     |   | 3,110    |   |   |   | (2,125       | )      |   |   | 11,686 |   |
|                                       |   |      |   |   |     |   |     |   |   |   |         |   |   |   |   |   |
| Segment      operating income              |   |      | 1,017  |   |     |   | 104      |   |   |   | -      -     |   |   |   | 1,121 |   |
| Adjustment      to LIFO basis              |   |      |   |   |     |   |     |   |   |   |         |   |   |   | (153 | ) |
| Operating      income                      |   |      |   |   |     |   |     |   |   |   |         |   |   |   | 968 |   |
| Capital      expenditures                  |   |      | 141    |   |     |   | 12       |   |   |   | -      -     |   |   |   | 153 |   |
| Depreciation      and amortization expense |   |      | 255    |   |     |   | 62       |   |   |   | 5            |   |   |   | 322 |   |

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Index to the Consolidated Financial Statements

|                                       |   | Successor                                                                |   |   | Predecessor                                                           |   |   | Total                                          |   |
|--------------------------------------------|--------|--------------------------------------------------------------------------|--------|--------|-----------------------------------------------------------------------|--------|--------|------------------------------------------------|--------|
| Millions of      dollars                   |   | For      theperiod      fromDecember 21throughDecember 31,2007 |   |   | For      theperiod      fromJanuary      1throughDecember      202007 |   |   | For      the year ended December 31, 2007 |   |
| Sales      and other operating revenues    |   | $                                                                        | 457    |   |                                                                  | $      | 13,037 |                                           |   | $ | 13,494 |   |
| Operating      income (loss)               |   |                                                                     | (66    | )      |                                                                  |   | 81     |                                           |   |   | 15 |   |
| Capital      expenditures                  |   |                                                                     | 12     |   |                                                                  |   | 228    |                                           |   |   | 240 |   |
| Depreciation      and amortization expense |   |                                                                     | 17     |   |                                                                  |   | 315    |                                           |   |   | 332 |   |

| Millions of      dollars                |   | Chemicals |     |   | Polymers |   |     | Total  |   |
|-----------------------------------------|--------|-----------|----------|--------|----------|--------|----------|--------|--------|
| 2007                                    |   |      |     |   |     |   |     |   |   |
| Property,      plant and equipment, net |   | $         | 4,520    |   |     | $      | 596      |   |   | $ | 5,116 |   |
| Goodwill                                |   |      | 500      |   |     |   | 250      |   |   |   | 750 |   |
|                                    |   |      |     |   |     |   |     |   |   |   |   |   |
| 2006                                    |   |      |     |   |     |   |     |   |   |   |   |   |
| Property,      plant and equipment, net |   | $         | 2,202    |   |     | $      | 644      |   |   | $ | 2,846 |   |
| Goodwill                                |   |      | -      - |   |     |   | -      - |   |   |   | -      - |   |
|                                    |   |      |     |   |     |   |     |   |   |   |   |   |
| 2005                                    |   |      |     |   |     |   |     |   |   |   |   |   |
| Property,      plant and equipment, net |   | $         | 2,413    |   |     | $      | 650      |   |   | $ | 3,063 |   |
| Goodwill                                |   |      | -      - |   |     |   | -      - |   |   |   | -- |   |

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Item 9.

Item 9A.  Controls andProcedures

Item 9B.  OtherInformation

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Index to the Consolidated FinancialStatements

PART III

Item 10.  Directors, Executive Officersand CorporateGovernance

Item 11.  ExecutiveCompensation

Item 12.  Security Ownership of CertainBeneficial Owners and Management and Related StockholderMatters

Item 13.  Certain Relationships and RelatedTransactions, andDirector Independence

Item 14.  Principal Accountant Fees andServices

Audit and Non-Audit Fees

| Thousands of      dollars     | 2007                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | 2006     |
|-------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------|
| Audit      fees (a)           | $  1,295                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | $1,362   |
| Audit-related      fees (b)   | 324                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | 270      |
| Tax      fees                 | -      -                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | -      - |
| All      other fees           | -      -                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | -      - |
|     Total | $  1,619                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | $1,632   |
|  (a)                     |  Audit      fees consist of the aggregate fees and expenses billed or expected to be      billed for professional services rendered by PricewaterhouseCoopers for      the audit of Equistar’s annual financial statements, the review of      financial statements included in Equistar’s Form 10-Qs or for services      that are normally provided by the independent auditors in connection with      statutory and regulatory filings or engagements for those fiscal      years.    The 2006 audit fees shown in the table above      reflect a reduction of $150,000 related to fees that were originally      estimated, but were not incurred with respect to 2006.  Of the      2006 audit fees shown in the table, $150,000 represents fees and expenses      billed in 2007 related to 2006 audit services.  Of the 2007      audit fees shown in the table, $315,000 represents fees and expenses      expected to be billed in 2008 related to 2007 audit    services.                                                                                                      |
|                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| (b)                           | Audit-related      fees consist of the aggregate fees billed for assurance and related      services by PricewaterhouseCoopers that are reasonably related to the      performance of the audit or review of Equistar’s financial      statements.  This category includes fees related to: the      performance of audits of Equistar’s benefit plans; agreed-upon or expanded      audit procedures relating to accounting and/or billing records required to      respond to or comply with financial, accounting or regulatory reporting      matters; and consultations as to the accounting or disclosure treatment of      transactions or events and/or the actual or potential impact of final or      proposed rules, standards or interpretations by regulatory or standard      setting bodies.  Of the 2006 audit-related fees shown in the      table, $188,000 represents fees billed in 2007 for 2006 audit-related      services.  Of the 2007 audit-related fees shown in the table,      $324,000 represents fees expected to be billed in 2008 for 2007      audit-related services. |

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Pre-Approval Policy

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Index to the Consolidated FinancialStatements

PART IV

Item 15.  Exhibits and Financial StatementSchedules

| Exhibit      Number |  Description of      Document                                                                                                                                                                                                                                                                                              |
|---------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.1                 | Certificate      of Limited Partnership of the Registrant dated as of October 17, 1997      (6)                                                                                                                                                                                                                                 |
| 3.1(a)              | Certificate      of Amendment to the Certificate of Limited Partnership of the Registrant      dated as of May 15, 1998 (6)                                                                                                                                                                                                |
| 3.1(b)              | Certificate      of Amendment to the Certificate of Limited Partnership of the Registrant      dated as of October 31, 2002 (6)                                                                                                                                                                                                 |
| 3.1(c)              | Certificate      of Amendment to the Certificate of Limited Partnership of the Registrant      dated as of November 30, 2004 (6)                                                                                                                                                                                                |
| 3.1(d)              | Amendment      to Certificate of Limited Partnership of the Registrant dated as of      December 18, 2007  (7)                                                                                                                                                                                                        |
| 3.2                 | Amended      and Restated Limited Partnership Agreement of the Registrant dated as of      December 19, 2007 (7)                                                                                                                                                                                                                |
| 4.1                 | Indenture      between Lyondell Petrochemical Company and Texas Commerce Bank National      Association, as Trustee, dated as of January 29, 1996  (1)                                                                                                                                                                          |
| 4.1(a)              | First      Supplemental Indenture dated as of February 15, 1996, between Lyondell      Petrochemical Company and Texas Commerce Bank National Association, as      Trustee, to the Indenture dated as of January 29, 1996  (1)                                                                                                  |
| 4.1(b)              | Second      Supplemental Indenture dated as of December 1, 1997, among Lyondell      Petrochemical Company, the Registrant and Texas Commerce Bank National      Association, as Trustee, to the Indenture dated as of January 29, 1996      (1)                                                                                |
| 4.1(c)              | Third      Supplemental Indenture dated as of November 3, 2000 among Lyondell      Chemical Company, the Registrant and The Chase Manhattan Bank, as Trustee,      to the Indenture dated as of January 29, 1996 (2)                                                                                                       |
| 4.1(d)              | Fourth      Supplemental Indenture dated as of November 17, 2000 among Lyondell      Chemical Company, the Registrant and The Chase Manhattan Bank, as Trustee,      to the Indenture dated as of January 29, 1996 (2)                                                                                                     |
| 4.2                 | Senior      Secured Credit Agreement dated as of December 20, 2007  (8)                                                                                                                                                                                                                                                         |
| 4.3                 | Interim      Loan Credit Agreement dated as of December 20, 2007 (8)                                                                                                                                                                                                                                                            |
| 4.4                 | Indenture      dated as of August 10, 2005 among Nell AF S.A.R., the guarantors named      therein, The Bank of New York, as Trustee, Registrar, Paying Agent,      Transfer Agent and Listing Agent, ABN AMRO Bank N.V., as Security Agent,      and AIB/BNY Fund Management (Ireland) Limited, as Irish Paying Agent      (8) |
| 4.4(a)              | Supplemental      Indenture dated as of February 2, 2006 to the Indenture dated as of August      10, 2005 (8)                                                                                                                                                                                                                  |
| 4.4(b)              | Second      Supplemental Indenture dated as of May 11, 2007 to the Indenture dated as      of August 10, 2005 (8)                                                                                                                                                                                                               |
| 4.4(c)              | Third      Supplemental Indenture dated as of July 26, 2007 to the Indenture dated as      of August 10, 2005 (8)                                                                                                                                                                                                               |
| 4.4(d)              | Fourth      Supplemental Indenture dated as of December 20, 2007 to the Indenture      dated as of August 10, 2005 (8)                                                                                                                                                                                                     |
| 4.5                 | Senior      Secured Inventory-Based Credit Agreement dated as of December 20, 2007      (8)                                                                                                                                                                                                                                     |
| 4.6                 | Security      Agreement dated as of December 20, 2007 (8)                                                                                                                                                                                                                                                                       |
| 4.7                 | Subsidiary      Guaranty dated as of December 20, 2007 (8)                                                                                                                                                                                                                                                                      |
| 4.8                 | Receivables      Purchase Agreement  dated as of December 20, 2007      (8)                                                                                                                                                                                                                                           |
| 4.9                 | Undertaking      Agreement dated as of December 20, 2007 (8)                                                                                                                                                                                                                                                                    |
| 4.10                | Intercreditor      Agreement dated as of December 20, 2007 (8)                                                                                                                                                                                                                                                                  |
| 4.11                | Intercreditor      Agreement dated as of December 20, 2007 (8)                                                                                                                                                                                                                                                                  |
| 4.12                | Receivables      Sales Agreement dated as of December 20,2007                                                                                                                                                                                                                                                                   |

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| 10.1    | Asset      Contribution Agreement among Lyondell Chemical Company, Lyondell      Petrochemical LP and the Registrant dated as of December 1, 1997      (1)                                                                                                                        |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.1(a) | First      Amendment, dated as of May 15, 1998, to the Asset Contribution Agreement      among Lyondell Chemical Company, Lyondell Petrochemicals LP and the      Registrant dated as of December 1, 1997 (1)                                                                |
| 10.1(b) | Second      Amendment to Lyondell Asset Contribution Agreement, dated as of September      30, 2001, among Lyondell Chemical Company, Lyondell Petrochemical LP Inc.      and the Registrant (3)                                                                                  |
| 10.2    | Asset      Contribution Agreement among Millennium Petrochemicals Inc., Millennium LP      and the Registrant dated as of December 1, 1997 (1)                                                                                                                                    |
| 10.2(a) | First      Amendment, dated as of May 15, 1998, to the Asset Contribution Agreement      among Millennium Petrochemicals Inc., Millennium LP and the Registrant      dated as of December 1, 1997 (1)                                                                        |
| 10.2(b) | Second      Amendment to Millennium Asset Contribution Agreement, dated as of      September 30, 2001, among Millennium Petrochemicals Inc., Millennium      Petrochemicals LP LLC and the Registrant (3)                                                                         |
| 10.3    | Agreement      and Plan of Merger and Asset Contribution among Occidental Petrochem      Partner 1, Inc., Occidental Petrochem Partner 2, Inc., Oxy Petrochemicals      Inc., PDG Chemical Inc. and the Registrant dated as of May 15, 1998      (1)                              |
| 10.3(a) | First      Amendment to Occidental Asset Contribution Agreement, dated as of      September 30, 2001, among Occidental Petrochem Partner 1, Inc., Occidental      Petrochem Partner 2, Inc., PDG Chemical Inc., Occidental Petrochem Partner      GP, Inc. and the Registrant (3) |
| 10.4    | Amended      and Restated Parent Agreement dated as of November 6, 2002    (4)                                                                                                                                                                                                    |
| 10.5    | Amended      and Restated Ethylene Sales Agreement between the Registrant and      Occidental Chemical Corporation dated as of August 20, 2004      (5)                                                                                                                           |
| 12      | Statement      Setting Forth Detail for  Computation of Ratio of Earnings to      Fixed Charges                                                                                                                                                                         |
| 31.1    | Rule      13a – 14(a)/15d – 14(a) Certification of Principal Executive      Officer                                                                                                                                                                                   |
| 31.2    | Rule      13a – 14(a)/15d – 14(a) Certification of Principal Financial      Officer                                                                                                                                                                                   |
| 32.1    | Section      1350 Certification of Principal Executive Officer                                                                                                                                                                                                                    |
| 32.2    | Section      1350 Certification of Principal Financial Officer                                                                                                                                                                                                                    |
|    |                                                                                                                                                                                                                                                                              |

| (1)  | Filed      as an exhibit to the Registrant’s Registration Statement on Form S-4 (No.      333-76473) and incorporated herein by reference.                               |
|-----------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2)  | Filed      as an exhibit to the Registrant’s Annual Report on Form 10-K for the year      ended December 31, 2000 and incorporated herein by      reference.        |
| (3)  | Filed      as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the      quarter ended September 30, 2001 and incorporated herein by      reference.      |
| (4)  | Filed      as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the      quarter ended September 30, 2002 and incorporated herein by      reference.      |
| (5)  | Filed      as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the      quarter ended September 30, 2004 and incorporated herein by      reference.      |
| (6)  | Filed      as an exhibit to the Registrant’s Annual Report on Form 10-K for the year      ended December 31, 2004 and incorporated herein by      reference.        |
| (7)  | Filed      as an exhibit to the Registrant’s Current Report on Form 8-K dated as of      December 19, 2007 and incorporated herein by reference.                         |
| (8)  | Filed      as an exhibit to Lyondell Chemical Company’s Annual Report on Form 10-K      for the year ended December 31, 2007 and incorporated herein by      reference.  |

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| Name                                                           |   | Title (Millennium      Petrochemicals Inc.) |
|----------------------------------------------------------------|--------|---------------------------------------------|
|                                                           |   |                                        |
|                                                           |   |                                        |
| /s/      MORRIS      GELB        |   | President      and Director                 |
| Morris      Gelb,                                              |   |                                        |
| (Principal      Executive Officer)                             |   |                                        |
|                                                           |   |                                        |
|                                                           |   |                                        |
| /s/      KAREN A.      TWITCHELL |   | Vice      President and Treasurer           |
| Karen      A. Twitchell,                                       |   |                                        |
| (Principal      Financial and Accounting Officer)              |   |                                        |
|                                                           |   |                                        |
|                                                           |   |                                        |
| /s/      ALAN      BIGMAN        |   | Director                                    |
| Alan      Bigman                                               |   |                                        |
|                                                           |   |                                        |
|                                                           |   |                                        |
| /s/      EDWARD J.      DINEEN   |   | Director                                    |
| Edward      J. Dineen                                          |   |                                        |

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| Name                                                                   |   | Title                                                             |
|------------------------------------------------------------------------|--------|-------------------------------------------------------------------|
|                                                                   |   |                                                              |
|                                                                   |   |                                                              |
| /s/      MORRIS      GELB                |   | President      and Chief Executive Officer                        |
| Morris      Gelb                                                       |   | Member,      Partnership Governance Committee                     |
| (Principal      Executive Officer)                                     |   |                                                              |
|                                                                   |   |                                                              |
|                                                                   |   |                                                              |
| /s/      ALAN      BIGMAN                |   | Chief      Financial Officer                                      |
| Alan      Bigman                                                       |   | Member,      Partnership Governance Committee                     |
| (Principal      Financial Officer)                                     |   |                                                              |
|                                                                   |   |                                                              |
|                                                                   |   |                                                              |
| /s/      EBERHARD      FALLER            |   | Vice      President, Controller and Chief Accounting Officer |
| Eberhard      Faller                                                   |   |                                                              |
| (Principal      Accounting Officer)                                    |   |                                                              |
|                                                                   |   |                                                              |
|                                                                   |   |                                                              |
| /s/      C.  BART DE      JONG |   | Member,      Partnership Governance Committee                     |
| C.      Bart de Jong                                                   |   |                                                              |

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