UNITED
STATES SECURITIES AND EXCHANGE COMMISSION


Washington,
D.C. 20549




FORM
10-K/A


Amendment
No. 1




x
            Annual Report Pursuant to Section
      13 or 15(d) of the Securities Exchange Act of 1934
              For
      the fiscal year ended December 31,
2008




or




 ̈
            Transition Report Pursuant to
      Section 13 or 15(d) of the Securities Exchange Act of
      1934
              For
      the transition period from ________ to
________




Commission
File Number: 001-33055




BreitBurn
Energy Partners L.P.


(Exact
name of registrant as specified in its charter)




Delaware
              74-3169953(State or other jurisdiction of
      incorporation or organization)
              (I.R.S. Employer Identification
      No.)515
      South Flower Street, Suite 4800
                Los
      Angeles, California 90071
              90071(Address of principal executive
      office)
              (Zip
    Code)




Registrant’s
telephone number, including area code: (213) 225-5900




Securities
registered pursuant to Section 12(b) of the Act:




Title
      of Each Class
            Name
      of Each Exchange on Which RegisteredCommon
      Units Representing Limited Partner Interests
            Nasdaq
      Global Select Market




Securities
registered pursuant to Section 12(g) of the Act:  None




Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.


Yes  ̈  No
x




Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or 15(d) of the Securities Exchange Act.  Yes  ̈  No x




Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.


Yes  x  No  ̈




Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding
12 months (or for such shorter period that the registrant was required to submit
and post such files).


Yes  x  No  ̈




Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.  x




Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting
company.  See the definitions of “large accelerated filer,”
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act (check one).




Large
      accelerated filer  x
            Accelerated
      filer   ̈
            Non-accelerated
      filer   ̈
            Smaller
      reporting company   ̈(Do
      not check if a smaller reporting
company)




Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Act).


Yes  ̈  No  x




As of
April 17, 2009, there were 52,770,011 Common Units outstanding.  The
aggregate market value of the Common Units held by non-affiliates of the
registrant (98.69 percent) was approximately $1,124,000,000 for the Common Units
on June 30, 2008 based on $21.63 per unit, the last reported sales price of
Common Units on the Nasdaq Global Select Market on such date.  The
calculation of the aggregate market value of the Common Units held by
non-affiliates of the registrant is based on an assumption that Quicksilver
Resources Inc., which owns 21,347,972 Common Units, representing 40.56 percent
of the outstanding Common Units, is a non-affiliate of the
registrant.




Documents
Incorporated By Reference:


None














EXPLANATORY
NOTE




BreitBurn
Energy Partners L.P. (the “Partnership,” “we,” “us” or “our”) is filing this
Amendment No. 1 on Form 10-K/A (this “Amendment”) to amend its Annual Report on
Form 10-K for the year ended December 31, 2008, filed with the Securities and
Exchange Commission (the “SEC”) on March 2, 2009 (the “Original
10-K”).




This Amendment is being filed to amend
the Original 10-K to include the information required by Items 10 through 14 of
Part III of Form 10-K.  In addition, on the cover page, (i) the
reference in the Original 10-K to the incorporation by reference of the
definitive Proxy Statement for the Partnership’s 2009 Annual Meeting of
Unitholders has been deleted and (ii) the information with respect to the number
of outstanding Common Units has been updated. The Company is also updating its
list of exhibits in Item 15 of this report to include the certifications
specified in Rule 13a-14(a) under the Securities Exchange Act of 1934 required
to be filed with this Amendment.  Except for the addition of the
Part III information, the updates to the cover page and the filing of
related certifications, no other changes have been made to the Original
10-K.  This Amendment does not reflect events occurring after the
filing of the Original 10-K or modify or update those disclosures affected by
subsequent events.









BREITBURN
ENERGY PARTNERS L.P. AND SUBSIDIARIES


TABLE
OF CONTENTS




Page No.PART
      IIIItem
      10. Directors and Executive Officers of Our General
    Partner.
                      
                      
                      1Item
      11. Executive Compensation.
                      
                      
                      7Item
      12. Security Ownership of Certain Beneficial Owners and Management and
      Related Unitholder Matters
                      
                      
                      31Item
      13. Certain Relationships and Related Transactions and Director
      Independence
                      
                      
                      33Item
      14. Principal Accountant Fees and Services.
                      
                      
                      36PART
      IVItem
      15. Exhibits, Financial Statement Schedules.
                      
                      
                      37SIGNATURES
                      
                      
                      42




i




PART
III




Item
10. Directors and Executive Officers of Our General Partner.




Partnership
Management and Governance




BreitBurn
GP, LLC, our general partner (“our general partner”), manages our operations and
activities on our behalf.  Prior to June 17, 2008, the membership
interests in our general partner were held by BreitBurn Management Company, LLC
(“BreitBurn Management”).  In addition, prior to that date, 95.55% of
the membership interests in BreitBurn Management were held by Provident Energy
Trust (“Provident”) and the remaining 4.45% of the membership interests in
BreitBurn Management were held by BreitBurn Energy Corporation, a California
corporation wholly owned by the Co-Chief Executive Officers of our general
partner (“BreitBurn Corp”).  On June 17, 2008, we, BreitBurn Corp,
BreitBurn Management, Provident and certain of its subsidiaries completed a
series of transactions (the “Purchase, Contribution and Partnership
Transactions”), pursuant to which, among other things, our general partner and
BreitBurn Management became our wholly-owned subsidiaries.  In
connection with such transactions, our partnership agreement (the “Partnership
Agreement”) was amended to provide that our limited partners holding common
units representing limited partner interests in us (“Common Units”) shall have
the right to nominate and vote in the election of directors to the board of
directors of our general partner.  See  “—Item 1. Business
—Ownership and Structure” in the Original 10-K for a further discussion of the
Purchase, Contribution and Partnership Transactions.




The
Partnership Agreement provides that an annual meeting of the limited partners
for the election of directors to the board of directors will be held in July of
each year or at such other date and time as may be fixed from time to time by
our general partner.  On April 7, 2009, the board of directors of our
general partner fixed November 30, 2009 as the date for the 2009 annual meeting.
The limited partners will vote together as a single class for the election of
two directors to the board of directors. The limited partners entitled to vote
will elect by a plurality of the votes cast at such meeting persons to serve on
the board of directors who are nominated in accordance with the provisions of
the Partnership Agreement.




With
respect to the election of directors to the board of directors, (A) we and our
general partner will not be entitled to vote Common Units that are otherwise
entitled to vote at any meeting of the limited partners, and (B) if at any time
any person or group beneficially owns 20% or more of the Outstanding Partnership
Securities (as defined in the Partnership Agreement) of any class then
outstanding, then all Partnership Securities (as defined in the Partnership
Agreement) owned by such person or group in excess of 20% of the Outstanding
Partnership Securities of the applicable class may not be voted, and in each
case, the foregoing Common Units will not be counted when calculating the
required votes for such matter and will not be deemed to be Outstanding (as
defined in the Partnership Agreement) for purposes of determining a quorum for
such meeting.  Such Common Units will not be treated as a separate
class of Partnership Securities for purposes of the Partnership
Agreement.  The number of directors constituting the whole board of
directors of our general partner may not be less than five or more than nine as
established from time to time by a resolution adopted by a majority of the
directors. The board has been divided into three classes, Class I, Class II, and
Class III. Each director will serve for a term ending as provided in the
Partnership Agreement.  However, the directors designated in the
limited liability company agreement of our general partner to Class I will serve
for an initial term that expires at the annual meeting held in 2009, the
directors designated to Class II will serve for an initial term that expires at
the annual meeting held in 2010, and the directors designated to Class III will
serve for an initial term that expires at the annual meeting held in 2011. At
each succeeding annual meeting beginning with the annual meeting held in 2009,
successors to the class of directors whose term expires at that annual meeting
will be elected for a three-year term.




1




The board
of directors of our general partner currently has a total of six
members.  The directors and the Class in which each such director is a
member are designated as follows:




John R.
Butler, Jr., Class I


Gregory
J. Moroney, Class I


Randall
H. Breitenbach, Class II


Charles
S. Weiss, Class II


David B.
Kilpatrick, Class III


Halbert
S. Washburn, Class III




The board
of directors has two standing committees: the audit committee and the
compensation and governance committee.  The members of the
compensation and governance committee are David B. Kilpatrick, John R. Butler,
Jr., Gregory J. Moroney and Charles S. Weiss.  The compensation and
governance committee's primary functions are to: (i) review the compensation of
our executive officers and directors; (ii) review the executive compensation
disclosure to be included in our annual report on Form 10-K or proxy statement;
(iii) determine and make grants under the Partnership’s 2006 Long Term Incentive
Plan; (iv) review management’s recommendations for employee compensation and
benefits; (iv) assist the board of directors in corporate governance matters;
and (v) recommend new candidates for election to the board and assist the board
in evaluating the performance of its members.




The
Co-Chief Executive Officers of our general partner also participate in the
compensation process by: (i) providing evaluations of other executive officers;
(ii) presenting overall results of the Partnership’s performance based upon the
achievements of each functional department; (iii) in some years, reviewing peer
group information and compensation recommendations and providing feedback
regarding the potential impact to the Partnership; and (iv) participating in
compensation and governance committee meetings at the invitation of the
committee, subject to exclusion from certain meetings or portions thereof
intended to be exclusive of management.  The Chief Financial Officer
of our general partner evaluates the financial implications and affordability of
compensation programs.  Other executive officers may periodically
participate in the compensation process and compensation and governance
committee meetings at the invitation of the committee to advise on performance
and/or activity in areas with respect to which these executive officers have
particular knowledge or expertise.




The
members of the audit committee are Charles S. Weiss, John R. Butler, Jr., David
B. Kilpatrick  and Gregory J. Moroney.  The board of
directors of our general partner has determined that one member of the audit
committee, Charles S. Weiss, qualifies as an “audit committee financial expert”
as defined by SEC rules.  NASDAQ Stock Market and SEC rules establish
independence standards for directors and require that the audit committee be
comprised of at least three directors determined to be
independent.  NASDAQ Stock Market rules establish procedures for
determining independence.  Messrs. Butler, Kilpatrick, Moroney and
Weiss meet the independence standards established by the NASDAQ Stock Market and
SEC rules.  The audit committee's primary functions are to assist the
board of directors with respect to (i) the review of the financial statements
and the financial reporting of the Partnership; (ii) the assessment of the
Partnership's internal controls; (iii) the appointment, compensation and
evaluation of the external auditor and the oversight of the external audit
process; (iv) the performance of the Partnership's internal audit function; (v)
the review and approval on an ongoing basis of all material related party
transactions required to be approved by the board; (vi) the resolution of any
conflicts of interest with our general partner and its affiliates and (vii) the
preparation of the audit committee report included in this report.




As
required by our Partnership Agreement, the board relies on the audit committee
to determine if the resolution of a conflict of interest with our affiliates is
fair and reasonable to us.  Any matters approved by the audit
committee in good faith will be conclusively deemed to be fair and reasonable to
us, approved by all of our partners and not a breach by our general partner of
any duties it may owe us or our unitholders.  Even though most
companies listed on the Nasdaq Global Select Market are required to have a
majority of independent directors serving on the board, the Nasdaq Global Select
Market does not require a listed limited partnership like us to have a majority
of independent directors on the board of directors of its general partner,
although at present we do meet that requirement.




For the
period from March 1, 2008 through March 1, 2009, there was one conflict of
interest presented to the audit committee for consideration.  In May
2008, in connection with the Purchase, Contribution and Partnership
Transactions, the board referred the evaluation and negotiation of the
acquisition of Provident’s interests in the Partnership by us and the related
exchange by BreitBurn Corp, a corporation wholly owned by the Co-Chief Executive
Officers of our general partner, of its 4.45% limited liability company interest
in BreitBurn Management to the Partnership in exchange for 19,955 Common Units
to the audit committee, acting as the conflicts committee.  The audit
committee negotiated the terms of the Purchase, Contribution and Partnership
Transactions and recommended to the board that it approve these transactions as
being fair and reasonable to the Partnership.




2




In
addition, in February, 2008, the board approved additional compensation for the
independent directors serving on the audit committee for acting as the conflicts
committee.  Each independent director serving at that time on the
committee received a supplemental retainer of $40,000 for having reviewed and
evaluated conflicts as a member of the audit committee in 2007.  For
their 2008 service, Messrs. Butler and Kilpatrick each received a supplemental
retainer of $50,000 and Mr. Weiss, as Chairman of the committee, received a
supplemental retainer of $75,000.




Meetings
and Other Information




From
January 1, 2008 through March 16, 2009, our board of directors had 16 regularly
scheduled and special meetings, our audit committee had 26 meetings (including
15 as the conflicts committee), and our compensation and governance committee
had 4 meetings.  None of our directors attended fewer than 75 percent
of the aggregate number of meetings of the board of directors and committees of
the board on which the director served.




All of
our committees have charters.  Our committee charters and governance
guidelines, as well as our Code of Business Conduct and our Code of Ethics for
Senior Financial Officers, which apply to our principal executive officer,
principal financial officer and principal accounting officer, are available on
our Internet website at http://www.breitburn.com, and printed copies of such
codes may be obtained, without charge, by written request addressed to c/o
Investor Relations, BreitBurn Energy Partners L.P., 515 South Flower Street,
Suite 4800, Los Angeles, California 90071.  We intend to disclose any
amendment to or waiver of the Code of Ethics for Senior Financial Officers and
any waiver of our Code of Business Conduct on behalf of an executive officer or
director either on our Internet website or in an 8-K filing.




Report
of the Audit Committee




The audit
committee of our general partner oversees the Partnership’s financial reporting
process on behalf of the board of directors.  Management has the
primary responsibility for the financial statements and the reporting
process.  In fulfilling its oversight responsibilities, the audit
committee reviewed and discussed with management the audited financial
statements contained in this report.




The
Partnership’s independent registered public accounting firm,
PricewaterhouseCoopers LLP, is responsible for expressing an opinion on the
conformity of the audited financial statements with accounting principles
generally accepted in the United States of America.  The audit
committee reviewed with PricewaterhouseCoopers LLP their judgment as to the
quality, not just the acceptability, of the Partnership’s accounting principles
and such other matters as are required to be discussed with the audit committee
under generally accepted auditing standards.




The audit
committee discussed with PricewaterhouseCoopers LLP the matters required to be
discussed by Auditing Standards No. 61, as amended (AICPA, Professional Standards, Vol.
1. AU Section 380), as adopted by the Public Company Accounting Oversight Board
in Rule 3200T.  The committee received written disclosures and the
letter from PricewaterhouseCoopers LLP required by applicable requirements of
the Public Company Accounting Oversight Board regarding the independent
accountant’s communications with the audit committee concerning independence,
and has discussed with PricewaterhouseCoopers LLP its independence from
management and the Partnership.




Based on
the reviews and discussions referred to above, the audit committee recommended
to the board of directors that the audited financial statements be included in
the Original 10-K for filing with the SEC.




Charles
S. Weiss, Chairman


John R.
Butler, Jr.


David B.
Kilpatrick




3




Directors
and Executive Officers of BreitBurn GP, LLC




The
following table sets forth certain information with respect to the members of
the board of directors and the executive officers of our general
partner.  Executive officers and directors will serve until their
successors are duly appointed or elected.




Name
              
              Age
              
              Position with BreitBurn GP,
    LLCRandall
      H. Breitenbach
              
              48
              
              Co-Chief
      Executive Officer, DirectorHalbert
      S. Washburn
              
              49
              
              Co-Chief
      Executive Officer, Chairman of the BoardMark
      L. Pease
              
              52
              
              Executive
      Vice President and Chief Operating OfficerJames
      G. Jackson
              
              44
              
              Executive
      Vice President and Chief Financial OfficerGregory
      C. Brown
              
              57
              
              Executive
      Vice President and General CounselChris
      E. Williamson
              
              51
              
              Senior
      Vice President –Western RegionW.
      Jackson Washburn
              
              46
              
              Vice
      President – Business DevelopmentDavid
      D. Baker
              
              36
              
              Vice
      President – Eastern DivisionBruce
      D. McFarland
              
              52
              
              TreasurerLawrence
      C. Smith
              
              55
              
              ControllerJohn
      R. Butler, Jr.*
              
              70
              
              DirectorDavid
      B. Kilpatrick*
              
              59
              
              DirectorGregory
      J. Moroney*
              
              57
              
              DirectorCharles
      S. Weiss*
              
              56
              
              Director





*
Independent Directors




Randall H. Breitenbachhas
been the Co-Chief Executive Officer and a Director of our general partner since
March 2006.  Mr. Breitenbach also is the Co-Chief Executive Officer of
and the Chairman of the board of directors of BreitBurn Energy Holdings LLC
(“BEH”), the indirect owner of BreitBurn Energy Company L.P. (“BEC”) and is the
co-founder and has been the Co-Chief Executive Officer of  BEC’s
predecessors since 1988.  Mr. Breitenbach currently serves as a
Trustee for Hotchkis and Wiley Funds, which is a mutual funds
company.  Mr. Breitenbach holds both a B.S and M.S. degree in
Petroleum Engineering from Stanford University and an M.B.A. from Harvard
Business School.





Halbert S. Washburnhas been
the Co-Chief Executive Officer and a Director of our general partner since March
2006.  He has been the Chairman of our general partner’s board of
directors since July 2008.  Mr. Washburn is the Co-Chief Executive
Officer of and a director of BEH and is the co-founder and has been the Co-Chief
Executive Officer of BEC’s predecessors since 1988. Mr. Washburn is the brother
of Willis Jackson Washburn, our general partner’s Vice President – Business
Development.  Mr. Washburn currently serves as a member of the Board
of Directors and Audit and Compensation Committees of Rentech, Inc., which is an
alternative fuels company.  Mr. Washburn obtained a B.S. degree
in Petroleum Engineering from Stanford University.





Mark L. Pease has been the
Chief Operating Officer of our general partner since December
2007.  Mr. Pease also serves as the Chief Operating Officer of
BEH.  Prior to joining our general partner, Mr. Pease served as Senior
Vice President, E&P Technology & Services for Anadarko Petroleum
Corporation (“Anardarko”). Mr. Pease joined Anardarko in 1979 as an
engineer, and most recently served as Senior Vice President, North America from
2004 to 2006 and as Vice President, U.S. Onshore and Offshore from 2002 to
2004.  Mr. Pease obtained a B.S. in Petroleum Engineering from the
Colorado School of Mines.





James G. Jacksonhas been the
Chief Financial Officer of our general partner since July 2006.  Mr.
Jackson also currently serves as the Chief Financial Officer of
BEH.  Before joining our general partner, Mr. Jackson served as
Managing Director of Merrill Lynch & Co.’s Global Markets and Investment
Banking Group.  Mr. Jackson joined Merrill Lynch in 1992 and was
elected Managing Director in 2001. Previously, Mr. Jackson was a Financial
Analyst with Morgan Stanley & Co. from 1986 to 1989 and was an Associate in
the Mergers and Acquisitions Group of the Long-Term Credit Bank of Japan from
1989 to 1990.  Mr. Jackson obtained a B.S. in Business
Administration from Georgetown University and an M.B.A. from the Stanford
Graduate School of Business.




4




Gregory C. Brownhas been the
General Counsel and Executive Vice President of Land, Legal and Government
Affairs of our general partner since December 2006.  Mr. Brown also
currently serves as General Counsel and Executive Vice President of Land, Legal
and Government Affairs of BEH.  Before joining our general partner,
Mr. Brown was a partner at Bright and Brown, a law firm specializing in energy
and environmental law which he co-founded in 1981.  Mr. Brown
earned a B.A. degree from George Washington University, with Honors, Phi Beta
Kappa and a Juris Doctor from the University of California, Los
Angeles.





Chris E. Williamsonhas been
Senior Vice President –Western Division of our general partner since January
2008 and previously served as Vice President of Operations since March
2006.  Since joining BreitBurn Corp, a predecessor of BEC, in 1994,
Mr. Williamson has served in a variety of capacities.  Mr. Williamson
has served as Vice President—Operations from April 2005 to 2008 and as Business
Unit Manager from 1999 to April 2005.  Before joining BEC, Mr.
Williamson worked for five years as a petroleum engineer for Macpherson Oil
Company.  Prior to his position with Macpherson, Mr. Williamson worked
at Shell Oil Company for 8 years holding various positions in Engineering and
Operations.  Mr. Williamson holds a B.S. in Chemical Engineering
from Purdue University.





W. Jackson Washburn has been
Vice President – Business Development of our general partner since August
2007.   Mr. Washburn also currently serves as Vice President,
Real Estate of BEH.  Mr. Washburn is the brother of Halbert S.
Washburn, our general partner’s Co-Chief Executive Officer and Chairman of the
Board.  Since joining BreitBurn Corp, a predecessor of BEC, in 1992,
Mr. Washburn has served in a variety of capacities, and has served as President
of BreitBurn Land Company, LLC, a subsidiary of BEC, since 2000.  Mr.
Washburn obtained a B.A. in Psychology from Wake Forest University.





David D. Baker has been Vice
President – Eastern Division of our general partner since February
2009.  Mr. Baker joined BreitBurn Corp, a predecessor of BEC, in 1999
as a reservoir engineer.  Most recently, Mr. Baker was the Vice
President – Reservoir Engineering and Central Division of our general
partner.  He was the Manager, Reserves & Evaluations from 2007 to
2008 for BreitBurn Management and was the Manager of Acquisitions from 2004 to
2007, first for BEC and then, for BreitBurn Management.  Mr. Baker
obtained a B.S. degree in Chemical Engineering from Brigham Young
University.





Bruce D. McFarlandhas been
the Treasurer of our general partner since March 2006.  Mr. McFarland
served as the Chief Financial Officer of our general partner from March 2006
through June 2006.  Mr. McFarland also currently serves as Treasurer
of BEH.  Since joining BreitBurn Corp, a predecessor of BEC, in 1994,
Mr. McFarland served as Controller and served as Treasurer for more than five
years. Before joining BEC, Mr. McFarland served as Division Controller of IT
Corporation and worked at Price Waterhouse as a Certified Public
Accountant.  Mr. McFarland obtained a B.S. in Civil Engineering
from the University of Florida and an M.B.A. from University of California, Los
Angeles.





Lawrence C. Smithhas been the
Controller of our general partner since June 2006.  Mr. Smith also
currently serves as the Controller of  BEH.  Before joining
our general partner , Mr. Smith served as the Corporate Accounting Compliance
and Implementation Manager of Unocal Corporation from 2000 through May
2006.  Mr. Smith worked at Unocal from 1981 through May 2006 and held
various managerial positions in Unocal’s accounting and finance
organizations.  Mr. Smith obtained a B.B.A. in Accounting from the
University of Houston, an M.B.A. from the University of California,
Los Angeles, and is a Certified Public Accountant.





John R. Butler, Jr.has been a
member of the Board of Directors of our general partner since October
2006.  Mr. Butler has been Chairman of J.R. Butler and Company since
1976.  Mr. Butler is currently a director of Anadarko Petroleum
Corporation, a position he has held since 1996.  In addition, he
currently serves on the boards of directors of the Houston chapter of the
National Association of Corporate Directors and the Houston Advanced Research
Center, a non-profit corporation.  Mr. Butler was Chairman and Chief
Executive Officer of GeoQuest International Holdings, Inc., Senior Chairman of
Petroleum Information Corp. and Vice Chairman of Petroleum Information/Dwights,
L.L.C. until 1997.  He has a B.S. in Chemical Engineering from
Stanford University.




5




David B. Kilpatrick has been a
member of the Board of Directors of our general partner since March
2008.  Mr. Kilpatrick is the President of Kilpatrick Energy Group, a
position he has held since 1998.   Mr. Kilpatrick currently
serves on the board of directors of Cheniere Energy and is Chairman of the audit
committee of that board.  He also served on the boards of directors of
PYR Energy from 2001 to 2007 and of Whittier Energy Corporation from 2004 to
2007.   Mr. Kilpatrick was the President and Chief Operating
Officer of Monterey Resources, Inc. from 1996 to 1998 and held various positions
at Santa Fe Energy Resources from 1983 to 1996.  He has a B.S. in
Petroleum Engineering from the University of Southern California and a B.A. in
Geology and Physics from Whittier College.





Gregory J. Moroneyhas been a
member of the Board of Directors of our general partner since October
2006.  Currently, Mr. Moroney is the Managing Member and Owner of
Energy Capital Advisors, LLC, a position he has held since January
2003.  Mr. Moroney is also a Senior Financial Consultant for Ammonite
Resources LLC, a position he has held since June 2005.  Mr. Moroney
currently serves on the board of directors of Xcite Energy Limited,
UK.  Mr. Moroney served as Managing Director for Deutsche Bank
Securities Inc. from 1993 to December 2002.  Prior to this, Mr.
Moroney was with Citicorp/Citibank from 1977 to 1993 in Calgary, Toronto and New
York.  Mr. Moroney has a B.A. from Yale University.





Charles S. Weisshas been a
member of the Board of Directors of our general partner since October
2006.  Mr. Weiss is a Founder and Managing Partner of JOG Capital
Inc., a position that he has held since July 2002.  Mr. Weiss
currently serves on the boards of directors of JOG Capital Inc., Exshaw Oil
Corp., Masters Energy Inc. and Livingston Energy Ltd.  In addition,
Mr. Weiss served as Managing Director and Head of Royal Bank of Canada’s Capital
Markets Energy Group, a position he held from October 2002 through May
2006.  From June 2001 to July 2002, Mr. Weiss pursued various
investment opportunities, which included the establishment of JOG Capital
Inc.  Previously, Mr. Weiss was the Managing Director and Head of the
Energy and Power Group with Bank of America Securities from 1998 to June
2001.  Mr. Weiss obtained a B.A. in Physics from Vanderbilt University
and an M.B.A. from the University of Chicago Graduate School of
Business.




6




Item
11. Executive
Compensation.




Compensation
Discussion and Analysis




Executive
Summary




This
Compensation Discussion and Analysis section discusses the compensation policies
and programs for our named executive officers, who are the Co-Chief Executive
Officers, Chief Financial Officer and the three next most highly paid executive
officers of our general partner.  In late 2007, in order to more
closely align BreitBurn Management’s executive compensation program with our
peers, the board of directors of BreitBurn Management, after engaging a
compensation consultant, Hay Group Inc., approved increases to the base salaries
and targeted and maximum annual cash bonuses for our executive officers, as well
as implemented two new types of equity awards for our executive
officers.  These changes are designed to align the incentives for
management with the interests of our common unitholders by emphasizing the goal
of growing distributions and to improve our ability to recruit and retain
executive talent.  In general, the executive compensation program the
board of directors of BreitBurn Management approved in late 2007 applied to our
named executive officers, except that our board of directors elected to (1) not
increase the base salaries for 2009 and (2) reduce the cash bonuses by
approximately 60 percent paid to our named executive officers for 2008, after
taking into account the steep decline in commodity prices, the deteriorating
financial and credit situation and the impact on the Partnership’s revenues and
unit price along with the goal of the Partnership to reduce costs and maintain
financial flexibility in 2009.




Administrative
Services from BreitBurn Management




BreitBurn
Management operates our assets and performs other administrative services for us
such as accounting, corporate development, finance, land administration, legal
and engineering.  All of our employees, including our executives, are
employees of BreitBurn Management.  Prior to June 17, 2008, BreitBurn
Management provided services to us and to BEC. For 2008, it allocated its
expenses between the two entities using a percentage split for all indirect
charges of 68 percent to us and 32 percent to BEC based on a detailed review of
how individual employees would likely split their time between us and
BEC.  On June 17, 2008, in connection with the Purchase, Contribution
and Partnership Transactions, BreitBurn Management entered into an Amended and
Restated Administrative Services Agreement with BEC, pursuant to which BreitBurn
Management agreed to continue to provide administrative services to BEC, in
exchange for a monthly fee of $775,000 for indirect expenses.  The
monthly fee was based upon the same percentage split of 68 percent to us and 32
percent to BEC that had been applied during the first half of
2008.  In addition to the monthly fee, BreitBurn Management agreed to
continue to charge BEC for direct expenses including long-term incentive plan
costs, direct payroll and administrative costs. Beginning on June 17, 2008, all
of the costs not charged to BEC are consolidated with our results.




On August
26, 2008, members of our senior management, in their individual capacities,
together with Metalmark Capital Partners (“Metalmark”), Greenhill Capital
Partners (“Greenhill”) and a third-party institutional investor, completed the
acquisition of BEC.  This transaction included the acquisition of a
96.02 percent indirect interest in BEC previously owned by Provident and the
remaining indirect interests in BEC previously owned by Randall H. Breitenbach,
Halbert S. Washburn and other members of our senior management. BEC was an
indirectly owned subsidiary of Provident. The indirect interests in BEC
previously owned by Randall H. Breitenbach, Halbert S. Washburn and other
members of our senior management were exchanged in a non-cash transaction for
interests in a newly formed limited liability company (BEH) that now controls
BEC.




In
connection with the acquisition of Provident’s ownership in BEC by members of
senior management, Metalmark, Greenhill and a third party institutional
investor, BreitBurn Management entered into a five year Administrative Services
Agreement to manage BEC's properties. The monthly fee charged to BEC remained
$775,000 for indirect expenses through December 31, 2008. This fee is
renegotiated annually during the term of the agreement based upon budgeted costs
and a time allocation study and is expected to decrease for 2009.




7




Determination
of Compensation




Until
July 2008, BreitBurn Management had ultimate decision-making authority with
respect to the compensation program for our named executive
officers.  The board of directors of BreitBurn Management was
comprised of the Chief Executive Officer of Provident (Thomas Buchanan), two
members of Provident’s Board of Directors (Randall Findlay and Grant Billing), a
member of our general partner’s board of directors (Gregory Moroney) and the
Co-Chief Executive Officers and the Chief Financial Officer of our general
partner.  Also until July 2008, the compensation committee of
BreitBurn Management was composed of Randall Findlay, Thomas Buchanan and Grant
Billing.  After completion of the Purchase, Partnership and
Contribution Transactions, the compensation and governance committee of our
general partner assumed the responsibilities that had previously been performed
by the BreitBurn Management compensation committee.  With the
resignation of the three directors associated with Provident, the board of
directors of our general partner appointed the following four directors to serve
on the compensation and governance committee, John R. Butler, Jr., Gregory J.
Moroney, Charles S. Weiss and David B. Kilpatrick.




Prior to
July 2008, in making compensation determinations, the board of directors of
BreitBurn Management considered the recommendations of its compensation
committee (with respect to compensation determinations generally) and the board
of directors of our general partner (with respect to compensation determinations
for awards of equity in us).  The compensation and governance
committee is now responsible for reviewing BreitBurn Management’s compensation
program from time to time and making recommendations to the full board regarding
any changes to the program.  Grants of equity awards are approved by
the board of directors of our general partner or by the compensation and
governance committee.




In June
2007, the board of directors of BreitBurn Management engaged Hay Group Inc. to
conduct a competitive analysis of BreitBurn Management’s compensation program
and to provide recommendations for a future compensation framework and incentive
program design.  The compensation committee of the board was
ultimately responsible for selecting the consultant, determining the scope of
any work done and negotiating and approving fees for such work.




In
addition to utilizing other compensation studies, Hay Group Inc. compared the
amounts and forms of BreitBurn Management’s executive compensation with that of
the following peer group of twenty U.S. master limited partnerships and other
exploration and production companies (the “E&P Peer Group”):




Range
      Resources Corporation
                      
                      Forest
      Oil Corporation
                      
                      Cabot
      Oil & Gas CorporationLinn
      Energy, LLC
                      
                      EXCO
      Resources, Inc.
                      
                      Berry
      Petroleum CompanyEncore
      Acquisition Company
                      
                      Whiting
      Petroleum Corporation
                      
                      ATP
      Oil & Gas CorporationAtlas
      Energy Resources, LLC
                      
                      Comstock
      Resources, Inc.
                      
                      Delta
      Petroleum CorporationLegacy
      Reserves LP
                      
                      Rosetta
      Resources, Inc.
                      
                      PetroQuest
      Energy, Inc.St.
      Mary Land and Exploration Company
                      
                      EV
      Energy Partners, L.P.
                      
                      Cimarex
      Energy Co.Plains
      Exploration & Production Company
                      
                      Venoco,
      Inc.





The
criteria for inclusion in the peer group was based on utilizing upstream,
independent oil and gas exploration and production companies, ranging from
approximately one-half to two times our size based on market capitalization, and
with a priority on master limited partnerships.




After
making this comparison, Hay Group Inc. found that BreitBurn Management’s
executive compensation levels generally were low as compared to the E&P Peer
Group.  Hay Group Inc. advised the board that the market for key
executive talent in our industry in the U.S. was highly competitive, and that
the board should consider changes to its executive compensation program,
especially considering our acquisitions and aggressive growth
strategy.  After considering Hay Group Inc.’s analyses and
recommendations, the board of directors of BreitBurn Management implemented its
recommendations based primarily on the E&P Peer Group for purposes of
setting base salaries and bonus opportunities for the executives of the general
partner, and determined to increase the amounts of the named executive officers’
base salaries and targeted and maximum bonus opportunities under our annual cash
bonus plan, so that target cash and total direct compensation would be
positioned within the 50th to
75th
percentile of the peer group.  The board also adopted two new types of
equity incentive awards, namely, restricted phantom units (“RPUs”) and
convertible phantom units (“CPUs”).  The executive compensation
program is designed to improve our ability to recruit and retain executive
talent and to grow our business.  Importantly, the RPUs and CPUs align
the interests of our management, through our compensation program, with the
interests of our unitholders by emphasizing the goal of growing stable
distributions for our common unitholders.  Holders of RPUs and CPUs
are entitled to receive payments equal to distributions on our Common Units made
during the term of the equity awards.  In addition, the CPUs provide
enhanced benefits (and therefore reward their holders) based on increases in the
rate of distributions on our Common Units during the term of the equity
awards.  Similarly, if the distributions on our Common Units decrease,
the holders of CPUs will likewise receive less compensation, and at vesting, may
be subject to a clawback provision intended to permit us to recoup excess
distributions paid to the holder during the term of the award, as described
under “—Convertible Phantom Units (CPUs).”




8




The
compensation and governance committee expects to engage a compensation
consultant in the second half of 2009 to conduct a peer review of compensation
market data for executive compensation and consider any recommendations to
revise existing executive compensation to remain at appropriate market
levels.




Compensation
Objectives




Our
overall goal is to ensure that executive compensation policies are consistent
with our strategic business objectives, are aligned with the interests of the
common unitholders and provide incentives for the attainment of these
objectives.  The compensation program includes three
components:




§
            Base
      salary, which is intended to provide a stable annual salary at a level
      consistent with competitive market practice, individual performance and
      scope of responsibility;




§
            Variable
      short-term incentive bonuses, which link bonus incentives to our
      performance and the performance of the individual executive over the
      course of the year; and




§
            Equity-linked
      awards, which encourage actions to maximize long-term unitholder
      value.




The
relative proportion of total compensation we pay or award for each individual
component of compensation (base, short-term bonus or equity-linked awards)
varies for each named executive officer based on the executive’s level in the
organization.  The level correlates with the executive’s ability to
impact business results through the executive’s performance and leadership
role.  At higher levels of the organization, executives have a greater
impact on achievement of the business strategy and overall business
performance.  Therefore, certain executives have a higher proportion
of their total compensation delivered through variable short-term bonuses and
equity-linked awards.  Our philosophy is to make a greater proportion
of an executive’s compensation comprised of performance-based variable
short-term bonuses and equity-linked awards so that he or she is well-rewarded
if we perform well over time.  Our policy is to fix at the beginning
of each year the target amount of variable short-term bonus and equity-linked
awards that will be provided to the named executive officer during the year as a
percentage of the named executive officer’s base salary.  Base salary,
benefits and severance arrangements are fixed and not directly linked to
performance targets. As discussed below, the board of directors of our general
partner elected to reduce the cash bonuses under the Short-Term Incentive Plan
(the “STIP”) for the services our named executive officers rendered in 2008
after taking into account the steep decline in commodity prices, the
deteriorating financial and credit situation and the impact on our revenues and
unit price along with our goal to reduce costs and maintain financial
flexibility in 2009.  As a result, the short term bonuses were a
smaller portion of 2008 total compensation paid to our named executive officers
and  may not be indicative of the amount of bonuses paid in prior
years or that may be paid in the future.  See “—Components of
Compensation—Short-Term Incentive Plan—Annual Bonuses”.




Components
of Compensation




Base
Salary.




Our
policy is to position base executive salaries at levels that are comparable to
salaries provided to other executives in our market, with consideration to
individual performance factors and the scope of an individual’s
responsibilities.  In connection with the changes to our and BreitBurn
Management’s executive compensation program implemented in late 2007 referenced
above, the annual base salaries of the named executive officers were increased
to bring them in line with companies within the 50th to
75th
percentile of Hay Group Inc.’s study based primarily on the E&P Peer
Group.  In October, 2008, the compensation and governance committee
decided not to increase the existing salaries of our executive officers, because
of the continuing financial crisis, the rapid decline in commodity prices and
our goal to reduce costs and maintain financial flexibility in
2009.   For a further discussion of our liquidity, see Item 7
“—Management's Discussion and Analysis of Financial Condition and Results of
Operations—Liquidity and Capital Resources” in the Original 10-K.  As
a result, our executive officers’ salaries remained at the levels approved in
December 2007 which are as follows:




9




§
            the
      annual base salary of each of the Co-Chief Executive Officers, Randall H.
      Breitenbach and Halbert S. Washburn, is
  $425,000;




§
            the
      annual base salary of the Chief Operating Officer, Mark L. Pease, is
      $350,000;




§
            the
      annual base salary of the Chief Financial Officer, James G. Jackson, is
      $300,000;




§
            the
      annual base salary of the Executive Vice President and General Counsel,
      Gregory C. Brown, is $300,000; and




§
            the
      annual base salary of the Vice President of Business Development, W.
      Jackson Washburn, is $237,500.




Short-Term
Incentive Plan – Annual Bonuses.




The STIP
provides annual cash payments to eligible employees of BreitBurn Management,
including the named executive officers.  The STIP is designed to focus
employees on our operating and financial performance by linking their annual
award payment to Partnership and individual performance.




In
February 2007, BreitBurn Management established an STIP award target and maximum
for each named executive officer that was a percentage of his base
pay.  These percentages were modified in connection with the changes
to BreitBurn Management’s executive compensation program that were implemented
in late 2007, so that target cash compensation and total direct compensation to
our named executive officers would be positioned within the 50th to
75th
percentile of our peer group, with opportunities for higher total compensation
based on outstanding short- and long-term results.  As a result, the
following targets apply:




§
            the
      target annual award is 100 percent and the maximum award is 200 percent
      for Mr. Breitenbach and Mr. Halbert S.
Washburn;




§
            the
      target annual award is 75 percent and the maximum award is 150 percent for
      Mr. Jackson, Mr. Pease and Mr. Brown;
and




§
            the
      target annual award is 50 percent and the maximum award is 100 percent for
      Mr. W. Jackson Washburn.




These
target and maximum annual awards were applicable for the bonuses that were paid
in early 2009 for services performed in 2008.




In
determining payouts for work performed in 2008, the board of directors of our
general partner considered our performance using a number of metrics which
included completing the Purchase, Contribution and Partnership Transactions;
maintaining distributions to unitholders at $2.08 per Common Unit through the
fourth quarter 2008; successfully integrating assets we acquired in 2007;
increasing production by approximately 126 percent and sales revenue by
approximately 153 percent as compared to 2007 results; filing and taking
effective three S-3 registration statements required by private placement equity
agreements, the proceeds of which were used to make acquisitions in 2007; as
well as the board of directors’ subjective evaluation of the Partnership’s
performance.  The factors were considered subjectively in the
aggregate and none of the factors were accorded a specific weight.While
the board of directors believed that individual performance by our executives
was strong, it considered the Partnership’s performance to be weaker than it was
in prior years.  The board elected to reduce the cash bonuses under
the STIP to our named executive officers after taking into account the steep
decline in commodity prices, the deteriorating financial and credit situation
and the impact on the Partnership’s revenues and unit price along with the goal
of the Partnership to reduce costs and maintain financial flexibility in
2009.  The 2008 bonuses for our Co-Chief Executive Officers were paid
at 37 percent of their target and the bonus to Messrs. Jackson, W. J. Washburn
and Brown’s bonuses were paid at 40 percent of their targets.  Mr.
Pease will be paid his target bonus as required by his employment agreement;
however he agreed to defer payment of one-half of his bonus to be paid later in
2009.. The amounts of payments made under the STIP for 2008 for the named
executive officers are included in the “Summary Compensation Table”
below.




10




Partnership Long-Term Incentive
Plan.




The
BreitBurn Energy Partners L.P. 2006 Long-Term Incentive Plan (the “Partnership
LTIP”) provides financial incentives to the named executive officers through
grants of unit and unit linked awards, including performance units, RPUs and
CPUs.  The Partnership LTIP is designed to focus its participants on
our operating and financial performance by linking the payments under the awards
to distributions to common unitholders and other Partnership and individual
results.




In
connection with the changes to BreitBurn Management’s executive compensation
program in 2007 discussed above, the board of directors of our general partner
approved two new types of awards under the Partnership LTIP, namely, RPUs and
CPUs.  In December 2007, certain of the senior executive officers of
our general partner received new grants of RPUs and CPUs for
2008.  These senior executive officers received CPU grants because
they are in the best position within our company to influence our operating
results and, therefore, the amount of distributions we make to holders of our
Common Units.  As discussed below, payments under CPUs are directly
indexed to the amount of distributions we make to holders of our Common
Units.  As discussed further below, the number of CPUs ultimately
awarded to each of these senior executives is based upon the level of
distributions to common unitholders achieved during the term of the
CPUs.  We expect that, at its discretion, the board of directors of
BreitBurn Management will approve grants of RPUs to the executive officers of
our general partner on an annual basis.  The CPU grants vest over a
period of up to five years.  Therefore, these grants will not be made
on an annual basis.  New grants or modifications to existing grants
could be made in the board’s discretion at a date in the future after the
present CPU grants have vested or in the event of a significant change of
circumstances.




Restricted Phantom Units
(RPUs).  RPUs are phantom equity awards that, to the extent
vested, represent the right to receive actual Partnership units upon specified
payment events.  RPUs generally vest in three equal, annual
installments on each anniversary of the vesting commencement date of the
award.  In addition, RPUs are generally subject to accelerated vesting
in full upon the earlier occurrence, during the grantee’s employment, of a
“change in control” or upon the grantee’s termination due to death or
“disability”, termination without “cause” or, for certain grantees, termination
for “good reason” (as defined in the holder’s employment agreement, if
applicable).  Under the Partnership LTIP, a “change in control” is
generally defined as the occurrence of any one of the following: (a) the
acquisition by any person, other than an affiliate, of more than 50 percent of
the combined voting power of the equity interests in BreitBurn Management, our
general partner or us; (b) the approval by our limited partners, in one or a
series of transactions, of a plan of complete liquidation; (c) the sale or other
disposition by either our general partner or us of all or substantially all of
our assets to any person other than an affiliate; or (d) a transaction resulting
in a person other than our general partner becoming the general
partner.  If an RPU vests on an annual vesting date or in connection
with a termination of employment, the grantee will receive payment of the
underlying partnership unit within sixty days after such vesting
date.  If an RPU vests in connection with a change in control, then
the grantee will receive payment of the underlying Partnership unit upon the
earlier to occur of the annual vesting date that would have applied absent the
change in control or the grantee’s termination of employment.  Amounts
payable in the event of a termination of the grantee’s employment are subject to
a delay of up to six months to the extent required to comply with Section 409A
of the Internal Revenue Code.  In addition, each RPU is granted in
tandem with a distribution equivalent right that will remain outstanding from
the grant of the RPU until the earlier to occur of its forfeiture or the payment
of the underlying unit, and which entitles the grantee to receive payment of
amounts equal to distributions paid to each holder of an actual Partnership unit
during such period.  RPUs that do not vest for any reason are
forfeited upon a grantee’s termination of employment.




11




Convertible Phantom Units
(CPUs).  CPUs vest on the earliest to occur of (i) January 1,
2013, (ii) the date on which the aggregate amount of distributions paid to
common unitholders for any four consecutive quarters during the term of the
award is greater than or equal to $3.10 per Common Unit and (iii) upon the
occurrence of the death or “disability” of the grantee or his or her termination
without “cause” or for “good reason” (as defined in the holder’s employment
agreement, if applicable).  Unvested CPUs are forfeited in the event
that the grantee ceases to remain in the service of BreitBurn
Management.




Prior to
vesting, a holder of a CPU is entitled to receive payments equal to the amount
of distributions made by us with respect to each of our Common Units multiplied
by the number of Common Unit equivalents underlying the CPUs at the time of the
distribution.  Initially, one Common Unit equivalent underlies each
CPU at the time it was awarded to the grantee.  However, the number of
Common Unit equivalents underlying the CPUs increases at a compounded rate of 25
percent upon the achievement of each 5 percent compounded increase in the
distributions paid by us to our common unitholders.   Conversely,
the number of Common Unit equivalents underlying the CPUs decreases at a
compounded rate of 25 percent if the distributions paid by us to our common
unitholders decreases at a compounded rate of 5 percent.  The
following table sets forth the number of Common Unit equivalents per CPU based
on assumed amounts of annualized distributions per Common Unit made by us in a
given year.




Common
      Unit
                    Target
                    Distribution
      Level
                
                Target
                    Distribution
      Level
                    $/Unit/Year
                
                
                CPU
                    Common
      Unit
                    Equivalents
      (CUEs)-8
                
                $
                1.24
                
                
                
                0.133-7
                
                $
                1.30
                
                
                
                0.178-6
                
                $
                1.37
                
                
                
                0.237-5
                
                $
                1.44
                
                
                
                0.316-4
                
                $
                1.52
                
                
                
                0.422-3
                
                $
                1.60
                
                
                
                0.563-2
                
                $
                1.68
                
                
                
                0.750-1
                
                $
                1.77
                
                
                
                1.0001
                
                $
                2.20
                
                
                
                1.0002
                
                $
                2.31
                
                
                
                1.2503
                
                $
                2.43
                
                
                
                1.5634
                
                $
                2.55
                
                
                
                1.9535
                
                $
                2.67
                
                
                
                2.4416
                
                $
                2.81
                
                
                
                3.0527
                
                $
                2.95
                
                
                
                3.8158
                
                $
                3.10
                
                
                
                4.768





For the
year ended December 31, 2008, we made aggregate distributions of $2.06 per
Common Unit.




In the
event that the CPUs vest on January 1, 2013 or because the aggregate amount of
distributions paid to common unitholders for any four consecutive quarters
during the term of the award is greater than $3.10 per Common Unit, the CPUs
would convert into a number of Common Units equal to the number of Common Unit
equivalents underlying the CPUs at such time (calculated based upon the
aggregate amount of distributions made per Common Unit for the preceding four
quarters).




In the
event that CPUs vest due to the death or disability of the grantee or his or her
termination without cause or good reason, the CPUs would convert into a number
of Common Units equal to the number of Common Unit equivalents underlying the
CPUs at such time, pro-rated based on when the death or disability
occurred.  First, the number of Common Unit equivalents would be
calculated based upon the aggregate amount of distributions made per Common Unit
for the preceding four quarters or, if such calculation would provide for a
greater number of Common Unit equivalents, the most recently announced quarterly
distribution level by us on an annualized basis.  Then, this number
would be pro rated by multiplying it by a percentage equal to:




§
            if
      such termination occurs on or before December 31, 2008, a percentage equal
      to 40 percent;




§
            if
      such termination occurs on or before December 31, 2009, a percentage equal
      to 60 percent;




12




§
            if
      such termination occurs on or before December 31, 2010, a percentage equal
      to 80 percent; and




§
            if
      such termination occurs on or after January 1, 2011, a percentage equal to
      100 percent.




The
employment agreements entered into by BreitBurn Management and us with Messrs.
Breitenbach, Halbert S. Washburn, Jackson, Pease and Brown (the “Employment
Agreements” or individually referred to as the “Employment Agreement”) each
terminate as of January 1, 2011.  Under these Employment Agreements,
if either BreitBurn Management or the executive officer does not renew any such
executive officer’s employment, then a pro-rated portion of such executive
officer’s CPUs will vest and convert into Common Units applying the same
calculation applicable to a termination due to death or disability, as discussed
above.    If either BreitBurn Management or the executive
officer does not renew his Employment Agreement, then the executive officer must
not voluntarily terminate his employment (other than due to death or disability)
before the end of the employment period in order to receive the pro rated CPUs
discussed above.  For a further description of the Employment
Agreements, see “—Employment Agreements”.




The
number of Common Units into which CPUs are converted upon vesting is subject to
a clawback provision intended to permit us to recoup excess distributions paid
to the grantee during the term of the award.  The clawback provision
is applicable if the amount of distributions that would have been paid to the
grantee during the term of the award (based on the number of Common Units issued
at vesting) is less than the amount of distributions actually paid to the
grantee during the term of the award (based on the number of Common Unit
equivalents used to determine the amount of distributions received during the
term of the award).  The clawback would be effected by deducting a
number of Common Units issued upon vesting with a value equal to the excess
distributions (based upon the value of the Common Unit on the Nasdaq Global
Select Market, if applicable on the vesting date).




We do not
anticipate any future grants of the types of awards and under the plans
described in greater detail below (the performance units, the BreitBurn
Management Long-Term Incentive Plan and the Unit Appreciation Right
Plans).  To the extent that any grants under those plans remain
outstanding at this date, we expect they will vest and be paid in accordance
with the terms of each respective award.




Performance
Units.  Certain of our executive officers, other than our
Co-Chief Executive Officers, also hold performance units under the Partnership
LTIP, which were granted prior to 2008.  Each performance unit granted
under the Partnership LTIP fully vests three years from the date of
grant.  Upon vesting, the grantee of the performance unit receives a
payment in cash or Common Units with a value equal to the value of the specified
number of performance units underlying the award based on the closing price of
our Common Units on the Nasdaq Global Select Market on the vesting
date.  Performance units vest in full upon a “change in control” (as
defined above under “—Restricted Phantom Units (RPUs)”).




If we
make a distribution during the term of the award, the number of performance
units underlying the award is adjusted upward by a number of units with a market
value equal to the amount of such distribution as of the distribution
date.  On the vesting date, the amount of the awarded units or cash
payment due for a performance unit under the Partnership LTIP will be adjusted
by applying a “payout multiplier” of 0 percent to 200 percent.  The
payout multiplier will be determined based on the total return on a Common Unit
relative to the total return on securities of a competitive peer group of
companies over the vesting period for such performance unit.  Total
return means the price appreciation of a specific security plus the aggregate
dividends or distributions paid on such security during the relevant
period.




§
            In
      the event that we rank below the 35th
      percentile, the payout multiplier will be equal to zero (and the
      multiplier with respect to performance units will be
  zero).




§
            In
      the event that we rank in or above the 35th
      percentile, but below the 75th
      percentile, the payout multiplier will be equal to the number obtained by
      subtracting one from the product of .04 multiplied by our percentile
      rank.  (For instance, if our percentile rank is in the 50th
      percentile, then the payout multiplier would be 100 percent ((.04 x 50) –
      1 = 1)).




§
            In
      the event that we rank in or above the 75th
      percentile, the payout multiplier will be equal to 200
      percent.




13




In
October 2007, BreitBurn Management and our general partner defined the peer
group used for purposes of the payout multiplier under the Partnership LTIP to
include the fifty master limited partnerships included in the Alerian MLP Index
from time to time (excluding us, since we are part of the index).




The
following is a list of the forty-nine master limited partnerships currently
included in the Alerian MLP Index:




Alliance
      Holdings GP LP
              
              Encore
      Energy Partners LP
              
              NuStar
      Energy LPAlliance
      Resource Partners LP
              
              El
      Paso Pipeline Partners LP
              
              NuStar
      GP Holdings LLCAmeriGas
      Partners LP
              
              Energy
      Transfer Equity LP
              
              ONEOK
      Partners LPAtlas
      Energy Resources LLC
              
              Energy
      Transfer Partners LP
              
              Penn
      Virginia Resource Partners LPAtlas
      Pipeline Partners LP
              
              Enterprise
      GP Holdings LP
              
              Plains
      All American Pipeline LPBoardwalk
      Pipeline Partners LP
              
              Enterprise
      Products Partners LP
              
              Regency
      Energy Partners LPBuckeye
      GP Holdings LP
              
              Ferrellgas
      Partners LP
              
              Spectra
      Energy Partners LPBuckeye
      Partners LP
              
              Genesis
      Energy LP
              
              Suburban
      Propane Partners LPCopano
      Energy LLC
              
              Inergy
      LP
              
              Sunoco
      Logistics Partners LPCrosstex
      Energy LP
              
              Kinder
      Morgan Energy Partners LP
              
              Targa
      Resources Partners LPDCP
      Midstream Partners LP
              
              Kinder
      Morgan Management LLC
              
              TC
      Pipeline LPDorchester
      Minerals LP
              
              Legacy
      Reserves LP
              
              Teekay
      LNG Partners LPDuncan
      Energy Partners LP
              
              Linn
      Energy LLC
              
              TEPPCO
      Partners LPEagle
      Rock Energy Partners LP
              
              Magellan
      Midstream Holdings LP
              
              Western
      Gas Partners LPEnbridge
      Energy Partners LP
              
              Magellan
      Midstream Partners LP
              
              Williams
      Partners LPEnbridge
      Energy Management LLC
              
              MarkWest
      Energy Partners LP
              
              Williams
      Pipeline Partners LPNatural
      Resource Partners LP





While the
board used the E&P Peer Group for purposes of analyzing other components of
BreitBurn Management’s compensation program, the board determined that it would
be more appropriate to use the above peer group rather than the E&P Peer
Group to measure the performance of the total return on a Common
Unit.  The forty-nine companies included in the peer group above are
all master limited partnerships and provide a better-sized group for purposes of
benchmarking our total return, as compared to the E&P Peer Group which
includes a number of non-master limited partnerships and only consists of twenty
companies.  Because our structure as a master limited partnership
impacts our total return calculation, the board determined using the above peer
group would be more appropriate because it consists entirely of master limited
partnerships.  As of December 31, 2008, the payout multiplier under
the Partnership LTIP was zero.




BreitBurn
Management Long-Term Incentive Plan.




Certain
of our named executive officers, other than the Co-Chief Executive Officers,
previously held performance trust units in Provident that were granted under the
BreitBurn Management Long-Term Incentive Plan (the “BreitBurn Management LTIP”)
prior to the completion of our initial public offering.  In connection
with the Purchase, Partnership and Contribution Transactions in June 2008, BEC
agreed to assume responsibility for the BreitBurn Management LTIP.  In
September, 2008, after Provident had divested its interests in us and in BEC,
the general partner of BEC offered participants early vesting and
payment.  In light of Provident’s exit, this offer was made to holders
to give them certainty regarding value, to provide administrative ease for BEC
and the Partnership and to maintain alignment between long term compensation
incentives and ownership in the BreitBurn entities.  All holders of
outstanding grants under this plan accepted the offer and no future payments
will be made to any participants.  Under the Administrative Services
Agreement BreitBurn Management has entered into with BEC, we were only
responsible for 36% of the costs of awards granted under this plan in 2005 and
2006 that were paid in 2008.




Unit
Appreciation Right (“UAR”) Plans.




Under the
BreitBurn Management Unit Appreciation Plan for Officers and Key Individuals
(the “Founders Plan”) and the BreitBurn Management Unit Appreciation Plan for
Employees and Consultants (the “UAR Plan”), prior to our initial public offering
certain of the named executive officers, other than the Co-Chief Executive
Officers, received grants of unit appreciation rights which vest in three equal
installments beginning one year after the vesting commencement
date.  Upon exercise, unit appreciation rights under the Founders Plan
provide for a cash payment based on the appreciation of the value of BEC, and
unit appreciation rights under the UAR Plan provide for a cash payment based on
the appreciation of the value of Provident’s trust units.  As of
December 31, 2008, all unit appreciation rights under the UAR Plan had been
settled and are no longer outstanding.




14




Upon
consummation of the initial public offering, the unit appreciation rights
outstanding under the Founders Plan were converted into three separate awards,
which provide for cash payments based on the appreciation during a specified
measurement period of the value attributable to (1) the portion of the assets
BEC retained after the initial public offering, (2) the portion of the assets
transferred to us for the period prior to the initial public offering, and (3)
the portion of the assets transferred to us for the period after the initial
public offering.  We are required to pay all of the compensation
expense associated with the unit appreciation rights that provide cash payments
based on the appreciation in the value of the portion of the assets transferred
us after the initial public offering.  We are also required to pay a
portion of the compensation expense associated with the unit appreciation rights
granted under the UAR Plan.




Each unit
appreciation right based on the appreciation after the initial public offering
entitles the holder, upon exercise, to the payment of a cash amount equal to the
difference between (a) the initial public offering price of our Common Units
($18.50) and (b) the closing price of the Common Units on the exercise date plus
the aggregate amount of distributions made on a Common Unit through such
exercise date.  Under the Founders Plan, in the event of a change in
control, all outstanding unit appreciation rights held by the participant will
immediately vest and become exercisable immediately prior to the effective date
of the change in control.  For purposes of unit appreciation rights
based on the appreciation after the initial public offering, the amended award
agreement under the Founders Plan defines a “change in control” generally as (a)
the sale, transfer or other disposition of all or substantially all of the
assets of us, our general partner, BreitBurn Management, Provident or the
holding company through which Provident holds its interests in us and BEC (“Pro
Holding”), (b) the acquisition by any person of beneficial ownership of more
than 50 percent of the total combined voting power of our general partner,
BreitBurn Management or Pro Holding, (c) the approval by our limited partners of
a plan of liquidation, (d) a transaction resulting in a person or related group
of persons (other than our general partner or its affiliate) being our general
partner, (e) the consummation of any transaction in which Provident is merged
into or amalgamated with any other entity, or (f) the commencement of a
take-over bid (as defined in the Securities Act (Alberta)) which is not exempt
from the take-over bid requirements of such Act for the Provident trust
units.




Under the
Founders Plan, in the event of a termination of a participant other than for
“misconduct,” all outstanding unit appreciation rights held by the participant
will immediately vest and become exercisable in full for a specified period of
time following the termination.  “Misconduct” is generally defined as
(a) the commission of any act of fraud, embezzlement or dishonesty by the
participant that has a material adverse impact on us, (b) any unauthorized use
or disclosure by such participant of our confidential information or trade
secrets or (c) any willful and continued failure by the participant to
substantially perform his or her duties or substantially follow and comply with
the specific and lawful directives of the board of directors of BreitBurn
Management (other than due to physical or mental illness).




Employment
Agreements.  BreitBurn Management and we have entered into
separate Employment Agreements with each of our general partner’s Co-Chief
Executive Officers, Messrs. Breitenbach and Halbert S. Washburn; Chief Operating
Officer, Mark L. Pease; Chief Financial Officer, James G. Jackson and General
Counsel, Gregory C. Brown.  Each Employment Agreement is for a term
expiring on January 1, 2011, with automatic one-year renewal terms unless either
BreitBurn Management or the executive officer gives written notice of
termination 90 days prior to the end of the term.  Each Employment
Agreement provides for an annual salary which may be increased at the discretion
of BreitBurn Management.  The base salary of each executive officer is
set forth below:




Randall
      H. Breitenbach
                    
                    $
                    425,000Halbert
      S. Washburn
                    
                    
                    425,000Mark
      L. Pease
                    
                    
                    350,000James
      G. Jackson
                    
                    
                    300,000Gregory
      C. Brown
                    
                    
                    300,000




15




Under the
terms of the Employment Agreements, each of the executive officers is also
entitled to participate in the STIP, the Partnership LTIP and other benefit
plans and fringe benefits maintained or provided by BreitBurn
Management.  During their respective employment periods, the executive
officers are entitled to reimbursement for up to $1,000 per month for expenses
associated with the lease or purchase of an automobile, in addition to the
payment of maintenance expenses for such automobile.  The executive
officers will also be reimbursed for the costs of one city, athletic or dining
club.  The Employment Agreements provide that BreitBurn Management may
terminate any of the executive officers with or without “cause” or in the case
of an executive officer’s “disability.”  Each executive officer may
terminate his Employment Agreement with or without “good reason.”




“Cause”
is generally defined as (a) the willful and continued failure to perform
substantially the executive officer’s duties (other than due to physical or
mental illness) after a written demand approved by a majority vote of the board
of directors and a reasonable period for cure, (b) the willful engaging by the
executive officer in illegal conduct or gross misconduct, which is materially
and demonstrably injurious to us, (c) any act of fraud, or material embezzlement
or theft in connection with the executive officer’s duties, or (d) the admission
in any court, conviction, or plea of nolo contendere of a felony involving moral
turpitude, fraud or material embezzlement, theft or misrepresentation affecting
us or any of our affiliates.




“Good
reason” is generally defined as (i) a material diminution in the executive
officer’s base salary; (ii) a material diminution in the executive officer’s
authority, duties or responsibilities; (iii) a material diminution in the
authority, duties or responsibilities of the supervisor to whom the executive
officer is required to report; (iv) a material diminution in the budget over
which the executive officer retains authority; (v) a material change in the
geographic location at which the executive officer must perform services under
the Employment Agreement; or (vi) any other action or inaction that constitutes
a material breach by the employer of the Employment Agreement.




If
BreitBurn Management terminates an executive officer without cause (other than
in the case of the executive officer’s death or disability), or the executive
officer terminates his employment for good reason, in either case in a manner
that constitutes a “separation from service” within the meaning of Section 409A
of the Internal Revenue Code, then the executive officer will be entitled
to:




§
            a
      lump-sum payment equal to the sum of the executive officer’s accrued but
      unpaid base salary, vacation pay and unreimbursed business expenses and
      other accrued but unpaid benefits (including, in the case of Mr. Jackson,
      any unpaid annual bonus in respect of any calendar year that ends on or
      before the date of termination) (referred to as the “accrued
      obligations”); and




§
            provided
      that the executive officer executes and does not revoke a general release
      and waiver of claims within forty-five days of his
      termination:




(a)
            a
      payment equal to 1.5 times (or, in the case of the Co-Chief Executive
      Officers only, a payment equal to 2.0 times) the sum of his base salary,
      plus his average annual bonus for the two preceding years (or in the event
      that he has not been employed for two years, the average annual bonuses
      earned for the first year (if completed) and the forecasted bonus for the
      current year),




(b)
            up
      to an eighteen month (or, in the case of the Co-Chief Executive Officers
      only, up to a twenty-four month) continuation of certain medical,
      prescription and dental benefits for the executive and his eligible
      dependents (until he becomes eligible to receive benefits under another
      employer-provided group health
plan),




(c)
            except
      for Mr. Jackson, any unpaid annual bonus in respect of any calendar year
      that ends on or before the date of
termination,




(d)
            to
      the extent not previously vested and converted into Common Units or
      forfeited, the RPUs and CPUs held by the executive officer will vest and
      convert into Common Units as described under “—Partnership Long-Term
      Incentive Plan” and




16




(e)
            in
      the case of Mr. Jackson only, a pro-rated bonus equal to the product of
      (i) his average annual bonus for the two preceding years and (ii) a
      fraction, the numerator of which is the number of days in the applicable
      year through the date of termination and the denominator of which is 365
      (the “pro-rated bonus”).




If an
executive officer incurs a separation from service because BreitBurn Management
terminates him for cause, or an executive officer terminates his employment for
other than good reason, BreitBurn Management will pay him his accrued
obligations, and any outstanding equity awards (including RPUs and CPUs held by
the executive officer) will be treated in accordance with the terms of the
governing plan and award agreement.




If the
executive officer incurs a separation from service by reason of his death or
disability, then he will be entitled to:




§
            the
      accrued obligations; and




§
            subject
      to the executive officer’s (or his estate’s) execution and non-revocation
      of a general release and waiver of
claims,




(a)
            the
      continuation of certain medical, prescription and dental benefits for the
      executive officer and his eligible dependents for the period commencing on
      his separation from service and ending on the earlier of (i) the date on
      which his employment period would have otherwise expired (disregarding any
      renewals) and (ii) a period of up to a twenty-four
  months,




(b)
            any
      unpaid annual bonus in respect of any calendar year that ends on or before
      the date of termination,




(c)
            to
      the extent not previously vested and converted into Common Units or
      forfeited, the RPUs and CPUs held by the executive officer will vest and
      convert into Common Units as described under “—Partnership Long-Term
      Incentive Plan” and




(d)
            in
      the case of Mr. Jackson only, his pro-rated
  bonus.




If
BreitBurn Management or an executive officer does not renew his Employment
Agreement and he incurs a separation from service as a result, he will be
entitled to his accrued obligations and his CPUs will vest and convert into
Common Units upon such separation (to the extent not previously vested and
converted into Common Units or canceled) as described under “—Partnership
Long-Term Incentive Plan.”




The
Employment Agreements of the Co-Chief Executive Officers also provide that to
the extent that the board of directors of BreitBurn Management determines that
any compensation or benefits payable under the agreements may not be compliant
with or exempt from Section 409A of the Internal Revenue Code, the board or the
Co-Chief Executive Officer will cooperate and work together in good faith to
timely amend the agreements to comply with such section or an exemption there
from.  If the Co-Chief Executive Officer, nonetheless, becomes subject
to the additional tax under Section 409A of the Internal Revenue Code with
respect to any payment under the agreements, BreitBurn Management will pay the
Co-Chief Executive Officer an additional lump sum cash amount to put him in the
same net after tax position he would have been in had no such tax been
paid.




Each
Employment Agreement provides that, for two-years after termination, each
executive officer must comply with certain non-solicitation
provisions.




Each
Employment Agreement also provides that BreitBurn Management will indemnify the
executive officers for certain claims made against them while in
office.  Mr. Brown’s Employment Agreement, in addition to the
foregoing, provides for the maintenance by BreitBurn Management of insurance
coverage for attorney’s errors and omission on Mr. Brown’s behalf, with Mr.
Brown as the named insured.




17






401(k) Plan.  The
BreitBurn Management Company 401(k) Plan is a defined contribution plan that
also qualifies as a 401(k) plan under the U.S. Internal Revenue Code of 1986, as
amended.  The contributions to the plan are made by us for each of the
named executive officers on the same terms as applicable to all other
employees.  Under the 401(k) plan, we make a matching contribution to
the plan equal to 50 percent of eligible participants’, including the named
executive officers’, before-tax contributions and after-tax contributions — up
to a maximum of 6 percent of the participant’s gross compensation beginning on
January 1, 2009, subject to Internal Revenue Code limits on the maximum amount
of pay that may be recognized.  A participant annually vests in 20
percent of the employer match portion of his or her contribution to the 401(k)
plan after the participant completes each of his or her first five years of
service or, if earlier, the participant reaches age 65, becomes permanently and
totally disabled or dies.  If a participant’s service terminates
before he or she is vested, the participant will forfeit the employer match and
any earnings thereon.




Perquisites and Other Elements of
Compensation.  In 2008, BreitBurn Management provided
perquisites to the named executive officers consisting of a car allowance or use
of a company car, city, athletic or dining club memberships, 401(k) matching
contributions, life insurance payments and reimbursement of legal fees (some of
which are provided only to certain named executive
officers).  BreitBurn Management believes that such perquisites are
necessary and appropriate in order to provide competitive compensation for its
executive officers.




Compensation
Committee Report




The
compensation and governance committee has reviewed and discussed with management
the foregoing Compensation Discussion and Analysis and, based on such review and
discussion, the committee determined that the Compensation Discussion and
Analysis should be included in this report.




David
      B. Kilpatrick, ChairmanJohn
      R. Butler, JrGregory
      J. MoroneyCharles
      S. Weiss




Compensation
Committee Interlocks and Insider Participation




Messrs.
Breitenbach and Halbert S. Washburn are Co-Chief Executive Officers of our
general partner and are members of the board of directors of our general
partner, BEH and BreitBurn Management.  Mr. Jackson is the Chief
Financial Officer of our general partner and serves on the board of directors of
BreitBurn Management.




Executive
Compensation Tables




We and
our general partner were formed in March 2006, but did not conduct any business
operations until October 10, 2006, the closing date of our initial public
offering.  The following tables and related discussion describes
compensation information for each of our named executive officers for services
performed for us during the period from the closing date of our initial public
offering through December 31, 2006 and for the years ended December 31, 2007 and
2008.  Certain of our named executive officers for 2008 were not
employed by BreitBurn Management or did not qualify under the SEC’s rules as
named executive officers in prior years, and therefore compensation information
for these executive officers for such years is not reflected in the tables and
related discussion below.




All of
our employees, including our executives, are employees of BreitBurn
Management.  Prior to June 17, 2008, BreitBurn Management provided
services to us and to BEC, and allocated its expenses between the two entities
using a percentage split for all indirect charges based on a detailed review of
how individual employees would likely split their time between us and
BEC.  The compensation reflected in the tables and discussion below
includes the salary, bonuses and other incentives received by our named
executive officers that were allocated to us by BreitBurn
Management.  For a further discussion regarding this allocation
methodology, see “—Compensation Discussion and Analysis—Named Executive
Officers’—Administrative Services from BreitBurn Management.”




18


Summary
Compensation Table




The
following table shows the compensation information for each of our named
executive officers for services rendered in all capacities to us and our
subsidiaries for the portion of 2006 from the closing of our initial public
offering through December 31, 2006 and for the years ended December 31, 2007 and
2008.




Summary
Compensation Table




Name and Principal Position
              
              Year
              
              Salary(1)
                  ($000)
              
              
              Bonus(2)
                  ($000)
              
              
              StockAwards(3)
                  ($000)
              
              
              OptionAwards
                  ($000)
              
              
              All OtherCompensation(4)
                  ($000)
              
              
              Total
                  ($000)Randall
      H. Breitenbach
                Co-Chief
      Executive Officer
              
              2008
              
              $
              363
              
              
              $
              125
              
              
              $
              1,523
              
              
              $
              —
              
              
              $
              25
              
              
              $
              2,0362007
              
              
              146
              
              
              
              282
              
              
              
              —
              
              
              
              3,516
              (5)
              
              
              14
              
              
              
              3,9582006
              
              
              41
              
              
              
              40
              
              
              
              —
              
              
              
              1,820
              (5)
              
              
              —
              
              
              
              1,901Halbert
      S. Washburn
                Co-Chief
      Executive Officer
              
              2008
              
              
              363
              
              
              
              125
              
              
              
              1,523
              
              
              
              —
              
              
              
              25
              
              
              
              2,0362007
              
              
              146
              
              
              
              282
              
              
              
              —
              
              
              
              3,516
              (5)
              
              
              3
              
              
              
              3,9472006
              
              
              41
              
              
              
              40
              
              
              
              —
              
              
              
              1,820
              (5)
              
              
              —
              
              
              
              1,901Mark
      L. Pease, Chief Operating Officer
              
              2008
              
              
              299
              
              
              
              210
              (7)
              
              
              1,091
              
              
              
              —
              
              
              
              19
              
              
              
              1,619James
      G. Jackson
                Chief
      Financial Officer
              
              2008
              
              
              256
              
              
              
              72
              
              
              
              378
              
              
              
              10
              
              
              
              27
              
              
              
              7422007
              
              
              130
              
              
              
              204
              
              
              
              511
              
              
              
              104
              (6)
              
              
              2
              
              
              
              9512006
              
              
              37
              
              
              
              37
              
              
              
              25
              
              
              
              9
              (6)
              
              
              —
              
              
              
              108Gregory
      C. Brown
                General
      Counsel
              
              2008
              
              
              256
              
              
              
              72
              
              
              
              678
              
              
              
              —
              
              
              
              24
              
              
              
              1,0302007
              
              
              134
              
              
              
              204
              
              
              
              175
              
              
              
              —
              
              
              
              2
              
              
              
              515Willis
      Jackson Washburn
                Vice
      President, Business Development
              
              2008
              
              
              203
              
              
              
              38
              
              
              
              416
              
              
              
              (68
              )
              
              
              24
              
              
              
              6142007
              
              
              56
              
              
              
              49
              
              
              
              150
              
              
              
              373
              (6)
              
              
              3
              
              
              
              631





(1)           For
each of the named executive officers, the dollar values shown in the “Salary”
column include the portion of base salary amounts paid to the named executive
officer in the applicable year that was allocated to us by BreitBurn Management
and does not include any compensation to the named executive officers for
services rendered to BEC.  For 2006, we were allocated approximately
15 percent of the total annual expense for the salaries paid to the named
executive officers (representing the proportion of the aggregate barrels of oil
equivalents produced by us in 2006 (for the period from the closing date of our
initial public offering through December 31, 2006) compared to the total barrels
of oil equivalents produced by both us and BEC in 2006).  The total
salary paid by us and BEC in 2006 to Mr. Breitenbach was $275,000, Halbert S.
Washburn was $275,000, and Mr. Jackson (for approximately 6 months) was
$121,233.  For 2007, we were allocated approximately 51 percent of the
total annual expense for the salaries paid to the named executive
officers.  This allocation was derived from a weighted average of
three components that were forecasted for us and BEC: (i) the proportionate
level of 2007 forecasted gross barrels of oil equivalents production; (ii) the
proportionate level of 2007 forecasted operating expenses; and (iii) the
proportionate level of 2007 forecasted capital expenditures.  The
total salary paid by us and BEC in 2007 to Mr. Breitenbach was $286,539, Halbert
S. Washburn was $286,539, Mr. Jackson was $253,846, Mr. Brown was $263,846, and
Willis Jackson Washburn was $202,855 (which amounts include increases to certain
executive officer’s salaries effective December 1, 2007).  For the
period from January 1 to June 17, 2008, we were allocated approximately 68
percent of the salaries paid to the named executive officers.  This
allocation was based on a detailed review of how the named executive officers
would likely split their time between us and BEC.  Our percentage of
allocable indirect expenses increased from 2006 to 2008 primarily due to our
growth as an entity, relative to BEC.  For the period from June 18 to
December 31, 2008, we were responsible for all of the named executive officers’
salary, subject to BEC’s payment obligations to BreitBurn Management under the
Administrative Services Agreement between the parties which was based on an
allocation of 68 percent of the costs to us.  The total salary paid by
us and BEC in 2008 to Mr. Breitenbach was $425,000, Halbert S. Washburn was
$425,000, Mr. Pease was $350,000, Mr. Jackson was $300,000, Mr. Brown was
$300,000, and Willis Jackson Washburn was $237,500.  For a further
description of the Administrative Services Agreement, see “—Compensation
Discussion and Analysis— Named Executive Officers’—Administrative Services from
BreitBurn Management.”




19


(2)           For
each of the named executive officers, the dollar values shown in the “Bonus”
column include the cash bonuses paid under the STIP for services rendered in the
applicable year to us.  Bonus costs paid for services rendered by the
named executive officers in 2007 and 2006 were allocated between us and BEC in
the same manner and proportion as salary costs were allocated for the same
periods.  The total bonus paid by us and BEC for services rendered in
2006 to Mr. Breitenbach was $275,000, Halbert S. Washburn was $275,000, and Mr.
Jackson was $121,233 (plus a signing bonus of $100,000 that was paid entirely by
BEC).  The total bonus paid by us and BEC for services rendered in
2007 to Mr. Breitenbach  was $552,500, Halbert S. Washburn was
$552,500, Mr. Jackson was $400,000, Mr. Brown was $400,000 and Willis Jackson
Washburn was $180,000.  With respect to 2008, each of BEC and we
separately paid the named executive officers bonuses for services rendered in
that year (i.e., no allocation was required).  The bonus paid by BEC
for services rendered in 2008 to Mr. Breitenbach was $85,000, Halbert S.
Washburn was $85,000, Mr. Pease was $53,000, Mr. Jackson was $45,000, Mr. Brown
was $45,000, and Willis Jackson Washburn was $24,000.  For a further
description of the STIP and individual awards, see “—Compensation Discussion and
Analysis—Components of Compensation—Short-Term Incentive Plan—Annual
Bonuses.”




(3)           In
accordance with Statement of Financial Accounting Standards No. 123 (revised
2004), Share Based
Payment, as amended, or SFAS 123(R), the dollar values shown in the
“Stock Awards” column for Messrs. Breitenbach, Halbert S. Washburn, Pease,
Jackson, Brown and Willis Jackson Washburn represent the compensation expense
recognized by us in the applicable year with respect to outstanding RPU, CPU and
performance unit grants under the Partnership LTIP, and performance trust unit
grants under the BreitBurn Management LTIP.  The following table sets
forth the amount of compensation expense recognized with respect to each type of
award for each of the named executive officers:




Named Executive Officer
                
                Year
                
                RPUs
                    ($000)
                
                
                CPUs
                    ($000)
                
                
                Performance
                    Units ($000)
                
                
                Performance
                    Trust Units
                    ($000)Randall
      H. Breitenbach
                
                2008
                
                $
                390
                
                
                $
                1,133
                
                
                $
                —
                
                
                $
                —2007
                
                
                —
                
                
                
                —
                
                
                
                —
                
                
                
                —2006
                
                
                —
                
                
                
                —
                
                
                
                —
                
                
                
                —Halbert
      S. Washburn
                
                2008
                
                
                390
                
                
                
                1,133
                
                
                
                —
                
                
                
                —2007
                
                
                —
                
                
                
                —
                
                
                
                —
                
                
                
                —2006
                
                
                —
                
                
                
                —
                
                
                
                —
                
                
                
                —Mark
      L. Pease
                
                2008
                
                
                549
                
                
                
                542
                
                
                
                —
                
                
                
                —James
      G. Jackson
                
                2008
                
                
                324
                
                
                
                466
                
                
                
                (412
                )
                
                
                —2007
                
                
                —
                
                
                
                —
                
                
                
                511
                
                
                
                —2006
                
                
                —
                
                
                
                —
                
                
                
                25
                
                
                
                —Gregory
      C. Brown
                
                2008
                
                
                324
                
                
                
                466
                
                
                
                (112
                )
                
                
                —2007
                
                
                —
                
                
                
                —
                
                
                
                175
                
                
                
                —Willis
      Jackson Washburn
                
                2008
                
                
                130
                
                
                
                194
                
                
                
                (90
                )
                
                
                1822007
                
                
                
                
                
                
                
                
                
                
                140
                
                
                
                10





Please see Note 15 to the consolidated
financial statements in the Original 10-K for a discussion of the valuation
assumptions made in the calculation of these amounts.  For a further
discussion of the Partnership LTIP and the RPUs, CPUs and performance units
granted thereunder, and for a further discussion of the BreitBurn Management
LTIP and the performance trust units granted thereunder, see “—Compensation
Discussion and Analysis—Components of Compensation.”  The amounts
shown for performance units held by Messrs. Jackson, Brown and Willis Jackson
Washburn were negative  in 2008 primarily due to a significant
decrease in the value of those outstanding performance units caused by a sharp
decline in the price of our Common Units at the end of 2008.  These amounts
reflect the accounting expense for these awards and do not necessarily reflect
the actual value that will be recognized by the executives at
vesting.




20


(4)           For
2008, the dollar amount shown for each of the named executive officers includes
allocated employer matching contributions to our 401(k) plan made by us of
approximately $6,000 for Mr. Breitenbach, $6,000 for Halbert S. Washburn, $6,000
for Mr. Jackson, $3,000 for Mr. Brown and $6,000 for Willis Jackson
Washburn.  The disclosable perquisites and personal benefits for the
named executive officers are:




Named Executive Officer
              
              Year
              
              Car Allowance or
                  Company Car
              
              
              Club Membership
                  Dues
              
              
              Paid Parking Fees
              
              
              Legal FeesRandall
      H. Breitenbach
              
              2008
              
              $
              10,237
              
              
              $
              4,095
              
              
              $
              4,402
              
              
              $
              —2007
              
              
              6,100
              
              
              
              2,200
              
              
              
              2,300
              
              
              
              —Halbert
      S. Washburn
              
              2008
              
              
              10,237
              
              
              
              3,890
              
              
              
              4,402
              
              
              
              —Mark
      L. Pease
              
              2008
              
              
              10,237
              
              
              
              8,302
              
              
              
              —
              
              
              
              —James
      G. Jackson
              
              2008
              
              
              10,237
              
              
              
              4,044
              
              
              
              4,402
              
              
              
              2,665Gregory
      C. Brown
              
              2008
              
              
              9,521
              
              
              
              4,044
              
              
              
              4,402
              
              
              
              2,665Willis
      J. Washburn
              
              2008
              
              
              9,777
              
              
              
              4,095
              
              
              
              4,402
              
              
              
              —





(5)           In
accordance with SFAS 123(R), represents the compensation expense recognized by
us in 2006 and 2007 with respect to outstanding phantom options under the
Executive Phantom Option Plan (a former plan we maintained).  For
2007, the amount shown includes $1.2 million charged to compensation expense for
each of Messrs. Breitenbach and Halbert S. Washburn as partial consideration for
the forfeiture of phantom options granted to them on January 1,
2007.  Please see Note 15 to the consolidated financial statements in
the Original 10-K for discussion of valuation assumptions made in the
calculation of these amounts.  No further phantom options tied to the
performance of our units will be granted under the Executive Phantom Option
Plan.  All compensation expense associated with phantom options tied
to the performance of our units was allocated to us.  The “Options
Awards” column does not reflect similar phantom options that were held by
Messrs. Breitenbach and Halbert S. Washburn and that were tied to the
performance of BEC and for which no compensation expense is allocated to
us.  On March 1, 2007, BEC paid $2,964,775 to each of Messrs.
Breitenbach and Halbert S. Washburn in respect of the performance of their BEC
phantom options in 2006.  On February 8, 2008, BEC paid $658, 570 to
each of Messrs. Breitenbach and Halbert S. Washburn for their BEC phantom
options in 2007.  In August 2008, Messrs. Breitenbach and Halbert S.
Washburn forfeited their BEC options in connection with the sale of
BEC.




(6)           In
accordance with SFAS 123(R), represents the compensation expense for Messrs.
Jackson and Willis Jackson Washburn recognized by us in the applicable year with
respect to outstanding unit appreciation rights granted under the Founders Plan
and/or the UAR Plan.  Please see Note 15 to the consolidated financial
statements in the Original 10-K for a discussion of the valuation assumptions
made in the calculation of these amounts.  For a further discussion of
the Founders Plan, the UAR Plan and the unit appreciation rights granted
thereunder, see “—Compensation Discussion and Analysis—Components of
Compensation—Unit Appreciation Right (“UAR”) Plans.”




(7)           Mr.
Pease will be paid his target bonus of $210,000 as required by his employment
agreement; however, he agreed to defer payment of one-half of his bonus to be
paid later in 2009.




21


Grants
of Plan-Based Awards




In the
fourth quarter of 2007, our general partner made grants of RPUs and CPUs to our
named executive officers under the Partnership LTIP, which were their annual
awards for 2008.  As a result, during 2008, we did not make any grants
of equity-linked plan-based awards to our named executive officers.




Narrative
Disclosure to Summary Compensation Table and Grants of Plan-Based Awards
Table




A
discussion of 2008 salaries, bonuses and equity-linked awards is included in
“—Compensation Discussion and Analysis.”




Outstanding
Equity Awards at Fiscal Year End




The
following table sets forth summary information regarding outstanding
equity-linked awards allocated to us and held by each of our named executive
officers at December 31, 2008:




Outstanding
Equity Awards at Fiscal-Year End




Stock AwardsName
                
                Number of
                    Securities
                    Underlying
                    Unexercised
                    Options
                    Unexercisable
                
                
                Option
                    Exercise
                    Price
                
                
                Option
                    Expiration
                    Date
                
                
                Number of
                    Units of
                    Stock
                    Equivalents
                    That Have
                    Not Vested
                
                
                Market
                    Value of
                    Units of
                    Stock
                    Equivalents
                    That Have
                    Not Vested
                    ($000)Randall
      H. Breitenbach
                
                
                —
                
                
                $
                —
                
                
                
                —
                
                
                
                18,700
                (1)(2)
                
                $
                132
                (3)—
                
                
                
                —
                
                
                
                —
                
                
                
                92,200
                (2)(4)
                
                
                650
                (3)—
                
                
                
                —
                
                
                
                —
                
                
                
                187,000
                (5)(6)
                
                
                1,318
                (3)Halbert
      S. Washburn
                
                
                —
                
                
                
                —
                
                
                
                —
                
                
                
                18,700
                (1)(2)
                
                
                132
                (3)—
                
                
                
                —
                
                
                
                —
                
                
                
                92,200
                (2)(4)
                
                
                650
                (3)—
                
                
                
                —
                
                
                
                —
                
                
                
                187,000
                (5)(6)
                
                
                1,318
                (3)Mark
      L. Pease
                
                
                —
                
                
                
                —
                
                
                
                —
                
                
                
                54,320
                (1)(2)
                
                
                383—
                
                
                
                —
                
                
                
                —
                
                
                
                89,500
                (5)(6)
                
                
                631James
      G. Jackson
                
                
                —
                
                
                
                —
                
                
                
                —
                
                
                
                32,044
                (1)(2)
                
                
                226
                (3)—
                
                
                
                —
                
                
                
                —
                
                
                
                77,000
                (5)(6)
                
                
                543
                (3)—
                
                
                
                —
                
                
                
                —
                
                
                
                10,373
                (7)(8)
                
                
                73
                (3)31,180
                (9)(10)
                
                $
                18.50
                (10)
                
                7/7/13
                
                
                
                —
                
                
                
                —Gregory
      C. Brown
                
                
                —
                
                
                
                —
                
                
                
                —
                
                
                
                32,044
                (1)(2)
                
                
                226
                (3)—
                
                
                
                —
                
                
                
                —
                
                
                
                77,000
                (5)(6)
                
                
                543
                (3)—
                
                
                
                —
                
                
                
                —
                
                
                
                10,373
                (7)(8)
                
                
                73
                (3)Willis
      Jackson Washburn
                
                
                —
                
                
                
                —
                
                
                
                —
                
                
                
                12,910
                (1)(2)
                
                
                91—
                
                
                
                —
                
                
                
                —
                
                
                
                32,000
                (5)(6)
                
                
                226
                (3)20,786
                (11)(12)
                
                $
                18.50
                (12)
                
                7/15/2011
                
                
                
                —
                
                
                
                ——
                
                
                
                —
                
                
                
                —
                
                
                
                8,299
                (7)
                
                
                59
                (3)




22





(1)           Represents
the number of RPUs granted to Messrs. Breitenbach, Halbert S. Washburn, Pease,
Jackson, Brown and Willis Jackson Washburn under the Partnership LTIP on
December 26, 2007 (with a vesting commencement date of January 1,
2008).




(2)           RPUs
vest in three equal installments on each anniversary of the vesting commencement
date of the award, or vest in full earlier in the event of the death or
“disability” of the grantee, his or her termination without “cause” or for “good
reason” (for those named executive officers with employment agreements) or a
“change in control” (as each such term is defined in the applicable award
agreement).  Unvested RPUs are forfeited in the event that the grantee
ceases to remain in service of BreitBurn Management.  Upon vesting,
each RPU is automatically converted into one Common Unit.  A holder of
a RPU is entitled to participate in the amount of distributions made by us with
respect to each of our Common Units during the term of the award.  The
compensation expense for the RPUs held by named executive officers incurred by
us in 2008 and 2007 is reflected in the “Summary Compensation Table”
above.  For a further description of the Partnership LTIP and the RPUs
granted thereunder, see “Compensation Discussion and Analysis—Components of
Compensation—Partnership Long-Term Incentive Plan.”




(3)           Represents
a dollar amount equal to the product of the closing price of a Common Unit on
December 31, 2008 ($7.05) multiplied by the number of RPUs, CPUs or performance
units under the Partnership LTIP held by named executive officer that have not
vested.




(4)           Represents
the number of RPUs granted to Messrs. Breitenbach and Halbert S. Washburn under
the Partnership LTIP on December 31, 2007 upon the forfeiture of phantom options
granted under the Executive Phantom Option Plan (a plan we previously
maintained).




(5)           Represents
the number of CPUs granted to Messrs. Breitenbach, Halbert S. Washburn, Pease,
Jackson, Brown and Willis Jackson Washburn under the Partnership LTIP on
December 26, 2007 (with a vesting commencement date of January 1,
2008).




(6)           CPUs
vest on the earliest to occur of (i) January 1, 2013, (ii) the date on which the
aggregate amount of distributions paid to common unitholders for any four
consecutive quarters during the term of the award is greater than or equal to
$3.10 per Common Unit and (iii) upon the occurrence of the death or “disability”
of the grantee or his or her termination without “cause” or for “good reason”
(as defined in the applicable award agreement).  Unvested CPUs are
forfeited in the event that the grantee ceases to remain in the service of
BreitBurn Management.  Prior to vesting, a holder of a CPU is entitled
to receive payments in an amount equal to the distributions made by us with
respect to each of our Common Units multiplied by the number of Common Unit
equivalents underlying the CPU at the time of the distribution.  The
number of Common Unit equivalents underlying a CPU is subject to upward or
downward adjustment if the quarterly amount of our distributions per Common Unit
increases or decreases during the term of the award.  Upon vesting,
each CPU is converted into a number of Common Units based on the number of
Common Unit equivalents underlying the CPU at such time (as may be adjusted
under the applicable award agreement depending on the circumstances giving rise
to the vesting).  The number of Common Units into which CPUs are
converted upon vesting may be subject to a clawback provision intended to permit
us to recoup excess distributions paid to the grantee during the term of the
award.  The compensation expense for the CPUs held by named executive
officers incurred by us in 2008 and 2007 is reflected in the “Summary
Compensation Table” above.  For a further description of the
Partnership LTIP and the CPUs granted thereunder, please see “Compensation
Discussion and Analysis—Components of Compensation—Partnership Long-Term
Incentive Plan.”




(7)           Represents
the number of performance units granted to Messrs. Jackson, Brown and Willis
Jackson Washburn under the Partnership LTIP on February 28, 2007 (with a vesting
commencement date of January 1, 2007).




23


(8)           The
performance units will be settled for cash or Common Units, at the election of
the holder, on the third anniversary of the vesting commencement
date.  Each performance unit is the economic equivalent of one Common
Unit representing a limited partnership interest in us and is accompanied by a
distribution equivalent right entitling the holder, immediately prior to
settlement of the performance unit, to an additional number of performance units
based upon the relationship between the amount of distributions paid on a Common
Unit during the period between the vesting commencement date and the settlement
date of the performance unit and the market price of a Common Unit prior to the
payment of such distributions.  On the settlement date, the payment
amount will be subject to adjustment by multiplying such payment amount by a
factor of 0 percent to 200 percent depending on a comparison of the total return
on a Common Unit relative to the total return on the securities of a competitive
peer group of companies over the vesting period of the performance
unit.  The compensation expense for the performance units held by
named executive officers incurred by us in 2008, 2007 and 2006 is reflected in
the “Summary Compensation Table” above.  For a further description of
the Partnership LTIP and the performance units granted thereunder, see
“Compensation Discussion and Analysis—Components of Compensation—Partnership
Long-Term Incentive Plan.”




(9)           Represents
the number of unit appreciation rights granted to Mr. Jackson under the Founders
Plan on October 10, 2006 (with a vesting commencement date of July 7, 2006),
which were allocated to us.




(10)           One-third
of the unit appreciation rights will become exercisable on each of the third,
fourth and fifth anniversaries of the vesting commencement date.  Each
unit appreciation right entitles Mr. Jackson, upon exercise, to a cash amount
equal to the difference between (a) the initial public offering price of our
Common Units ($18.50) and (b) the closing price of our Common Units on the
exercise date plus the aggregate amount of distributions made on a Common Unit
through such exercise date.  The amount referenced in clause (a) of
the preceding sentence is shown in the “Option Exercise Price” column for Mr.
Jackson.  The compensation expense for these unit appreciation rights
incurred by us in 2008, 2007 and 2006 is reflected in the “Summary Compensation
Table” above.  For a further description of the Founders Plan and the
unit appreciation rights granted thereunder, see “—Compensation Discussion and
Analysis—Components of Compensation— Unit Appreciation Right (“UAR”)
Plans.”




(11)           Represents
the number of unit appreciation rights granted to Willis Jackson Washburn under
the Founders Plan on October 10, 2006 (with a vesting commencement date of June
15, 2004), which were allocated to us.




(12)           All
of the unit appreciation rights will become exercisable on the fifth anniversary
of the vesting commencement date.  Each unit appreciation right
entitles Willis Jackson Washburn, upon exercise, to a cash amount equal to the
difference between (a) the initial public offering price of our Common Units
($18.50) and (b) the closing price of our Common Units on the exercise date plus
the aggregate amount of distributions made on a Common Unit through such
exercise date.  The compensation expense for these unit appreciation
rights incurred by us in 2008, 2007 and 2006 is reflected in the “Summary
Compensation Table” above.  For a further description of the Founders
Plan and the unit appreciation rights granted thereunder, see “—Compensation
Discussion and Analysis—Components of Compensation— Unit Appreciation Right
(“UAR”) Plans.”




24


Option
Exercises and Stock Vested




The
following table summarizes the exercise of unit appreciation rights and the
vesting of performance trust units reflected in the tables above held by our
named executive officers during 2008.  No other unit-linked awards
vested or were exercised during 2008.




2008
Option Exercises




Option AwardsName
                
                Number of Units Acquired on
                    Exercise
                
                
                Value Realized on Exercise ($000)Randall
      H. Breitenbach
                
                
                —
                
                
                $
                —Halbert
      S. Washburn
                
                
                —
                
                
                
                —Mark
      L. Pease
                
                
                —
                
                
                
                —James
      G. Jackson
                
                
                —
                
                
                
                —Gregory
      C. Brown
                
                
                —
                
                
                
                —Willis
      Jackson Washburn
                
                
                20,787
                (1)
                
                
                132
                (2)







(1)           Represents
the total number of Common Units underlying the unit appreciation rights that
were exercised by Willis Jackson Washburn under the Founders
Plan.  Mr. Washburn exercised these unit appreciation rights on June
16, 2008.




(2)           A
cash amount of approximately $132,185 was paid to Willis Jackson Washburn in
June 2008 relating to the exercise of a portion of his unit appreciation rights
described in the preceding paragraph.  The amount represents the
difference between (a) the initial public offering price of our Common Units of
($18.50) and (b) the closing price ($22.23) of our Common Units on the business
day immediately preceding the vesting date plus the aggregate amount of
distributions ($2.629) made on a Common Unit through such date.  The
compensation expense for the unit appreciation rights incurred by us in 2007 and
2008 is also reflected in the “Summary Compensation Table” above.  For
a further description of the Founders Plan, the UAR Plan and the unit
appreciation rights granted thereunder, please see “Compensation Discussion and
Analysis—Components of Compensation— Unit Appreciation Right (“UAR”)
Plans.”




Pension
Benefits




BreitBurn
Management sponsors a 401(k) plan that is available to all employees, but does
not maintain a pension or defined benefit program.




Nonqualified
Deferred Compensation and Other Nonqualified Deferred Compensation
Plans




BreitBurn
Management does not have a nonqualified deferred compensation plan or program
for its officers or employees.




Potential
Payments Upon Termination or Change in Control




The
following tables present our reasonable estimate of the benefits payable to the
named executive officers by us in the event of certain qualifying terminations
of employment or upon a change in control or similar transaction, assuming that
such termination or change in control or other transaction occurred on December
31, 2008.  While we have made reasonable assumptions regarding the
amounts payable, there can be no assurance that in the event of a termination,
change in control or other transaction, the named executive officers would
receive the amounts reflected below.




25


Termination
Without Cause or for Good Reason




The
following table presents our reasonable estimate of the benefits payable to the
named executive officers in the event of a termination without cause or for good
reason.




Name
              
              Salary and
                  Bonus
                  ($000)
              
              
              Employee
                  Benefits
                  ($000)
              
              
              Value of Option
                  Acceleration
                  ($000)
              
              
              Value of Unit
                  Award
                  Acceleration
                  ($000)
              
              
              Total Value
                  ($000)Randall
      H. Breitenbach
              
              $
              1,382
              (1)
              
              $
              25
              (2)
              
              $
              —
              
              
              $
              1,309
              (3)
              
              $
              2,716Halbert
      S. Washburn
              
              
              1,382
              (1)
              
              
              25
              (2)
              
              
              —
              
              
              
              1,309
              (3)
              
              
              2,716Mark
      L. Pease
              
              
              1,050
              (4)
              
              
              21
              (5)
              
              
              —
              
              
              
              635
              (3)
              
              
              1,706James
      G. Jackson
              
              
              729
              (4)
              
              
              19
              (5)
              
              
              —
              (6)
              
              
              443
              (3)
              
              
              1,191Gregory
      C. Brown
              
              
              729
              (4)
              
              
              12
              (5)
              
              
              —
              
              
              
              443
              (3)
              
              
              1,184Willis
      Jackson Washburn
              
              
              —
              
              
              
              —
              
              
              
              —
              (6)
              
              
              181
              (3)
              
              
              181





(1)           Represents
the aggregate estimated cash amount of severance to be paid under each of the
Co-Chief Executive Officers’ Employment Agreements in the event of a termination
without cause (other than in the case of disability) or for good reason, equal
to two times the sum of his base salary plus his average annual bonus for the
two preceding years, and the pro-rated amount of his bonus for the year of his
termination (which, for purposes of the amount shown in the “Salary and Bonus”
column, has been assumed to be the amount of the bonus the executive officer
actually received for 2008, as reflected in the “Summary Compensation
Table”).  For a further description of the Employment Agreements, see
“—Compensation Discussion and Analysis—Components of Compensation—Employment
Agreements.”




(2)           Represents
the aggregate estimated cash amount allocated to us to be paid under each of the
Co-Chief Executive Officers’ Employment Agreements in the event of a termination
without cause (other than in the case of disability) or for good reason for
continued medical, prescription and dental benefits for the Co-Chief Executive
Officer and his eligible dependents for a period of twenty-four months after
termination of employment.  For a further description of the
Employment Agreements, see “—Compensation Discussion and Analysis—Components of
Compensation—Employment Agreements.”




(3)           Represents
the aggregate estimated cash amount each named executive officer would receive
in connection with a termination without cause (other than in the case of
disability) or for good reason in respect of unvested RPUs and/or CPUs held by
such officer as of December 31, 2008.  The amount shown was calculated
as the product of (a) the number of RPUs and the pro rated amount of CPUs, held
by the officer as of December 31, 2008, multiplied by (b) the closing price of
our Common Units on December 31, 2008 ($7.05).  Such estimated amount
assumes that one Common Unit equivalent underlies each CPU.  However,
such estimated amount does not include any payments relating to performance
units outstanding as of December 31, 2008, because the applicable payout
multiplier as of such date was zero.  For a further description of the
Partnership LTIP and the RPUs, CPUs and performance units granted thereunder,
see “Compensation Discussion and Analysis—Components of Compensation—Partnership
Long-Term Incentive Plan.”




(4)           Represents
the aggregate estimated cash amount of severance to be paid under each of
Messrs. Pease, Jackson and Brown’s Employment Agreements in the event of a
termination without cause (other than in the case of disability) or for good
reason, equal to the sum of one and one-half times the sum of his annual base
salary, plus his average annual bonus for the two preceding years (or in the
event that he has not been employed for two years, the average annual bonuses
earned for the first year (if completed) and the forecasted bonus for the
current year); and, the pro-rated amount of his bonus for the year of his
termination (which, for purposes of the amount shown in the “Salary and Bonus”
column, has been assumed to be the amount of the bonus the executive officer
actually received for 2008, as reflected in the “Summary Compensation
Table”).  For a further description of the Employment Agreement, see
“—Compensation Discussion and Analysis—Components of Compensation—Employment
Agreements.”




26


(5)           Represents
the aggregate estimated cash amount to be paid under each of Messrs. Pease,
Jackson and Brown’s Employment Agreements in the event of a termination without
cause (other than in the case of disability) or for good reason for continued
medical, prescription and dental benefits for the named executive officer and
his eligible dependents for a period of eighteen months after termination of
employment.  For a further description of the Employment Agreement,
see “—Compensation Discussion and Analysis—Components of Compensation—Employment
Agreements.”




(6)           Under
the Founders Plan, in the event of a termination of a participant other than for
“misconduct,” all outstanding unit appreciation rights held by the participant
will immediately vest and become exercisable in full for a specified period of
time following the termination.  Upon exercise, the holder of a unit
appreciation right is entitled to receive the difference between (a) the initial
public offering price of our Common Units ($18.50) and (b) the closing price of
a Common Unit on the exercise date, plus the aggregate amount of distributions
made on a Common Unit through such exercise date.  Since the unit
appreciation rights were out of the money as of December 31, 2008, no amount is
included in the table with respect to these awards as of such
date.  For a further description of the Founders Plan and the unit
appreciation rights granted thereunder, see “—Compensation Discussion and
Analysis—Components of Compensation— Unit Appreciation Right (“UAR”)
Plans.”




Termination
Due to Death or Disability




The
following table presents our reasonable estimate of the benefits payable to the
named executive officers (or their estates) in the event of a termination due to
death or disability.




Name
              
              Salary and
                  Bonus
                  ($000)
              
              
              Employee
                  Benefits
                  ($000)
              
              
              Value of Option
                  Acceleration
                  ($000)
              
              
              Value of Unit
                  Award
                  Acceleration
                  ($000)
              
              
              Total Value
                  ($000)Randall
      H. Breitenbach
              
              $
              125
              (1)
              
              $
              25
              (2)
              
              $
              —
              
              
              $
              1,309
              (3)
              
              $
              1,459Halbert
      S. Washburn
              
              
              125
              (1)
              
              
              25
              (2)
              
              
              —
              
              
              
              1,309
              (3)
              
              
              1,459Mark
      L. Pease
              
              
              210
              (1)
              
              
              21
              (2)
              
              
              —
              
              
              
              635
              (3)
              
              
              866James
      G. Jackson
              
              
              72
              (1)
              
              
              19
              (2)
              
              
              —
              (4)
              
              
              443
              (3)
              
              
              534Gregory
      C. Brown
              
              
              72
              (1)
              
              
              12
              (2)
              
              
              —
              
              
              
              443
              (3)
              
              
              527Willis
      Jackson Washburn
              
              
              —
              
              
              
              —
              
              
              
              —
              (4)
              
              
              181
              (3)
              
              
              181









(1)           Represents
the aggregate estimated amount to be paid to the named executive officer under
his Employment Agreement in connection with a termination due to death or
disability, equal to the amount of the unpaid annual bonus in respect of any
calendar year that ends on or before the date of
termination.  Assuming such termination occurred on the last day of
2008, each such executive officer would be entitled to receive his full bonus
for 2008.  As a result, the amounts shown in the “Salary and/or Bonus”
column for the executive officer reflects the actual bonuses paid to him that is
reflected in the “Summary Compensation Table.”  For a further
description of the Employment Agreements, see “—Compensation Discussion and
Analysis—Components of Compensation—Employment Agreements.”




(2)           Represents
the aggregate estimated cash amount to be paid to the executive officer under
his Employment Agreement in connection with a termination due to death or
disability for continued medical, prescription and dental benefits for the
executive officer and his eligible dependents for a period of twenty-four months
after termination of employment for Messrs. Breitenbach and Halbert S. Washburn
and a period of eighteen months for Messrs. Pease, Jackson and
Brown.  For a further description of the Employment Agreements, see
“—Compensation Discussion and Analysis—Components of Compensation—Employment
Agreements.”




27


(3)           Includes
the aggregate estimated cash amount each named executive officer would receive
in connection with a termination due to death or disability in respect of
unvested RPUs and/or CPUs held by him as of December 31, 2008.  The
amount shown was calculated as the product of (a) the number of RPUs and the
pro-rated number of CPUs held by the officer as of December 31, 2008, multiplied
by (b) the closing price of our Common Units on December 31, 2008
($7.05).  Such estimated amount assumes that one Common Unit
equivalent underlies each CPU.  However, such estimated amount does
not include any payments relating to performance units outstanding as of
December 31, 2008, because the applicable payout multiplier as of such date was
zero.  For a further description of the Partnership LTIP and the RPUs,
CPUs and performance units granted thereunder, see “Compensation Discussion and
Analysis—Components of Compensation—Partnership Long-Term Incentive
Plan.”




(4)           Under
the Founders Plan, in the event of a termination of a participant other than for
“misconduct,” all outstanding unit appreciation rights held by the participant
will immediately vest and become exercisable in full for a specified period of
time following the termination.  Upon exercise, the holder of a unit
appreciation right is entitled to receive the difference between (a) the initial
public offering price of our Common Units ($18.50) and (b) the closing price of
a Common Unit on the exercise date, plus the aggregate amount of distributions
made on a Common Unit through such exercise date.  Since the unit
appreciation rights were out of the money as of December 31, 2008, no amount is
included in the table with respect to these awards as of such
date.  For a further description of the Founders Plan and the unit
appreciation rights granted thereunder, see “—Compensation Discussion and
Analysis—Components of Compensation— Unit Appreciation Right (“UAR”)
Plans.”




Change
in Control




The
following table presents our reasonable estimate of the benefits payable to the
named executive officers in the event of a change in control.  This
table also assumes that the executives are not terminated without cause or for
good reason in connection with a change in control.




Name
              
              Salary
      and
                  Bonus
      ($000)
              
              
              Employee
                  Benefit
      ($000)s
              
              
              Value
      of Option
                  Acceleration
                  ($000)
              
              
              Value
      of Unit
                  Award
                  Acceleration
                  ($000)
              
              
              Total
      Value
                  ($000)Randall
      H. Breitenbach
              
              $
              —
              
              
              $
              —
              
              
              $
              —
              
              
              $
              782
              (1)
              
              $
              782Halbert
      S. Washburn
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              782
              (1)
              
              
              782Mark
      L. Pease
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              383
              (1)
              
              
              383James
      G. Jackson
              
              
              —
              
              
              
              —
              
              
              
              —
              (2)
              
              
              226
              (1)
              
              
              226Gregory
      C. Brown
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              226
              (1)
              
              
              226Willis
      Jackson Washburn
              
              
              —
              
              
              
              —
              
              
              
              —
              (2)
              
              
              91
              (1)
              
              
              91







(1)           Includes
the aggregate estimated cash amount each named executive officer would receive
in connection with a change in control in respect of unvested RPUs held by him
as of December 31, 2008.  The amount shown was calculated as the
product of (a) the number of RPUs held by the officer as of December 31, 2008,
multiplied by (b) the closing price of our Common Units on December 31, 2008
($7.05).  However, such estimated amount does not include any payments
relating to performance units outstanding as of December 31, 2008, because the
applicable payout multiplier as of such date was zero.  In addition,
pursuant to the terms of the CPU award agreements, unvested CPUs do not
accelerate upon the occurrence of a change in control.  For a further
description of the Partnership LTIP and the RPUs, CPUs and performance units
granted thereunder, see “Compensation Discussion and Analysis—Components of
Compensation—Partnership Long-Term Incentive Plan.”




(2)           Under
the Founders Plan, in the event of a change in control, all outstanding unit
appreciation rights held by the participant will immediately vest and become
exercisable immediately prior to the effective date of the change in
control.  Upon exercise, the holder of a unit appreciation right is
entitled to receive the difference between (a) the initial public offering price
of our Common Units ($18.50) and (b) the closing price of a Common Unit on the
exercise date, plus the aggregate amount of distributions made on a Common Unit
through such exercise date.  Since the unit appreciation rights were
out of the money as of December 31, 2008, no amount is included in the table
with respect to these awards as of such date.  For a further
description of the Founders Plan and the unit appreciation rights granted
thereunder, see “—Compensation Discussion and Analysis—Components of
Compensation— Unit Appreciation Right (“UAR”) Plans.”


28




Non-solicitation
Arrangements




Pursuant
to their Employment Agreements, each of Messrs. Halbert S. Washburn,
Breitenbach, Pease, Jackson and Brown has agreed to comply with certain
non-solicitation provisions for a period of two-years after
termination.




Director
Compensation




Officers
or employees of our general partner or its affiliates who also serve as
directors do not receive additional compensation for their service as a director
of our general partner.  Each director who is not an officer or
employee of our general partner or its affiliates receives:




§
            a
      $35,000 cash annual retainer;




§
            $1,500
      for each meeting of the board of directors attended ($4,000 for the
      chairman of the board of
directors);




§
            $1,500
      for each committee meeting
attended;




§
            a
      $5,000 compensation and governance committee annual retainer ($7,500 for
      the committee chair);




§
            a
      $5,000 audit committee annual retainer ($10,000 for the committee chair);
      and




§
            grants
      of up to $100,000 of phantom units with three-year vesting, which will be
      settled in Common Units or cash
equivalent.




In
February, 2008, the board of directors of our general partner approved
additional compensation for the independent directors serving on the audit
committee for acting as the conflicts committee.  For 2008, the
committee chair received a retainer of a total of $75,000, and each director,
other than the committee chair, received a retainer of $50,000.




In
addition, each non-employee director is reimbursed for his out-of-pocket
expenses in connection with attending meetings of the board of directors or
committees. We indemnify each director for actions associated with being a
director to the extent permitted under Delaware law.




The
following table shows the compensation information for each of the non-employee
directors of our general partner for 2008.  The compensation of our
Co-Chief Executive Officers, Messrs. Breitenbach and Halbert S. Washburn, is
disclosed in the “Summary Compensation Table” above.




2008
      Director CompensationName
              
              Fees
      Earned or
                  Paid
      in Cash
                  ($000)
              
              
              Stock
      Awards
                  ($000)(1)(2)
              
              
              Option
      Awards
                  ($000)(3)
              
              
              Total
                  ($000)John
      R. Butler,
      Jr.
              
              $
              160
              
              
              $
              96
              
              
              $
              —
              
              
              $
              256David
      B.
      Kilpatrick
              
              
              85
              
              
              
              20
              
              
              
              —
              
              
              
              105Gregory
      J.
      Moroney
              
              
              38
              
              
              
              45
              
              
              
              (68
              )
              
              
              (15
              )Charles
      S.
      Weiss
              
              
              190
              
              
              
              96
              
              
              
              —
              
              
              
              286


29







(1)           In
accordance with SFAS 123(R), represents the compensation expense recognized by
us in 2008 with respect to outstanding phantom unit grants under the Partnership
LTIP.  The phantom units will be settled for an equal number of Common
Units or cash equivalent on the third anniversary of the vesting commencement
date.  Each phantom unit is accompanied by a distribution equivalent
right, entitling the holder to an additional number of phantom units with a
value equal to the amount of distributions paid on each of our Common Units
during the period between the vesting commencement date and the settlement date
of the phantom units based on the market price of each of our Common Units prior
to the payment of such distributions.  For a further discussion of the
Partnership LTIP, see “—Compensation Discussion and Analysis—Components of
Compensation—Partnership Long-Term Incentive Plan.”  The grant date
fair value of each performance unit granted in 2008 is based on the closing
price of a Common Unit on the date of grant and is set forth in the table
below.




Non-Employee Director
              
              Grant Date
              
              Vesting
                  Commencement
                  Date
              
              Awarded No. of
                  Phantom Units
              
              
              Grant Date Fair
                  Value ($000)John
      R. Butler, Jr.
              
              1/24/2008
              
              1/1/2008
              
              
              3,460
              
              
              
              90David
      B. Kilpatrick
              
              4/28/2008
              
              1/1/2008
              
              
              3,866
              
              
              
              81Gregory
      J. Moroney
              
              1/24/2008
              
              1/1/2008
              
              
              3,460
              
              
              
              90Charles
      S. Weiss
              
              1/24/2008
              
              1/1/2008
              
              
              3,460
              
              
              
              90





(2)           The
aggregate number of stock awards and the aggregate number of option awards
outstanding for each director at December 31, 2008 are set forth in the table
below. In addition to the stock awards listed in the table below, Mr. Moroney
also has 20,786 unit appreciation rights granted under the Founders
Plan.




Name
                  
                  Aggregate Stock Awards
                      Outstanding
                  
                  
                  Aggregate Option Awards
                      OutstandingJohn
      R. Butler, Jr.
                  
                  
                  15,698
                  
                  
                  
                  —David
      B. Kilpatrick
                  
                  
                  4,380
                  
                  
                  
                  —Gregory
      J. Moroney
                  
                  
                  6,546
                  
                  
                  
                  20,786Charles
      S. Weiss
                  
                  
                  15,698
                  
                  
                  
                  —





(3)           In
accordance with SFAS 123(R), represents the compensation expense recognized by
us in 2008 with respect to outstanding unit appreciation rights granted under
the Founders Plan.  One-third of the unit appreciation rights will
become exercisable on each of the third, fourth and fifth anniversaries of the
vesting commencement date.  Each unit appreciation right entitles the
holder, upon exercise, to a cash amount equal to the difference between (a) the
initial public offering price of our Common Units ($18.50) and (b) the closing
price of our Common Units on the exercise date plus the aggregate amount of
distributions made on a Common Unit through such exercise date.  For a
further discussion of the Founders Plan and the units granted thereunder, see
“—Compensation Discussion and Analysis—Components of Compensation—Unit
Appreciation Right (“UAR”) Plans.”




Acceleration
of Phantom Units and Unit Appreciation Rights Upon a Change in Control or a
Qualifying Termination




If a
director’s term of office terminates as a result of his death or a disability
that entitles him to benefits under BreitBurn Management’s long-term disability
plan, or if a change in control (as defined in the Partnership LTIP) occurs,
then the phantom units then held by him automatically will become fully vested
upon such termination or change in control.




Under the
Founders Plan, in the event of a termination of a participant other than for
“misconduct,” all outstanding unit appreciation rights held by the participant
will immediately vest and become exercisable in full for a specified period of
time following the termination.  In addition, under the Founders Plan,
in the event of a change in control, all outstanding unit appreciation rights
held by the participant will immediately vest and become exercisable immediately
prior to the effective date of the change in control.


30




Item
12. Security Ownership of Certain Beneficial Owners and Management and Related
Unitholder Matters.




The
following table sets forth the beneficial ownership of our units, as of April
15, 2009, by:




§
            each
      person known by us to beneficially own 5 percent or more of our
      units;




§
            each
      member of our Board of Directors;




§
            each
      of our named executive officers;
and




§
            all
      directors and executive officers as a
group.




The
amounts and percentage of units beneficially owned are reported on the basis of
regulations of the SEC governing the determination of beneficial ownership of
securities.  Under the rules of the SEC, a person is deemed to be a
“beneficial owner” of a security if that person has or shares “voting power,”
which includes the power to vote or to direct the voting of such security, or
“investment power,” which includes the power to dispose of or to direct the
disposition of such security.  A person is also deemed to be a
beneficial owner of any securities of which that person has a right to acquire
beneficial ownership within 60 days of April 15, 2009.  Under these
rules, more than one person may be deemed a beneficial owner of the same
securities and a person may be deemed a beneficial owner of securities as to
which he has no economic interest.  Except as indicated by footnote,
the persons named in the table below have sole voting and investment power with
respect to all units shown as beneficially owned by them, subject to community
property laws where applicable.  Unless otherwise included, for
purposes of this table, the principal business address for each such person is
c/o BreitBurn Energy Partners L.P. 515 S. Flower Street, Suite 4800, Los
Angeles.




Name of Beneficial Owner
                
                Common
                  Units
                  Beneficially
                  Owned
                
                
                Percentage of
                  Common Units
                  Beneficially
                  OwnedQuicksilver
      Resources Inc.(1)
                
                
                21,347,972
                
                
                40.45
      percentThe
      Baupost Group, L.L.C.(2)
                
                
                8,157,439
                
                
                15.46
      percentSAK
      Corporation(2)
                
                
                8,157,439
                
                
                15.46
      percentSeth
      A. Klarman(2)
                
                
                8,157,439
                
                
                15.46
      percentBreitBurn
      Energy Corporation(3)
                
                
                690,751
                
                
                1.31
      percentRandall
      H. Breitenbach(3(4)
                
                
                774,692
                
                
                1.47
      percentHalbert
      S. Washburn(3)(4)
                
                
                726,371
                
                
                1.38
      percentMark
      L. Pease
                
                
                13,292
                
                
                
                (5
                )James
      G. Jackson
                
                
                10,732
                
                
                
                (5
                )Gregory
      C. Brown
                
                
                15,921
                
                
                
                (5
                )W.
      Jackson Washburn
                
                
                5,030
                
                
                
                (5
                )John
      R. Butler, Jr.
                
                
                2,189
                
                
                
                (5
                )David
      B. Kilpatrick
                
                
                —
                
                
                
                —Gregory
      J. Moroney
                
                
                8,000
                
                
                
                (5
                )Charles
      S. Weiss
                
                
                15,000
                
                
                
                (5
                )All
      directors and executive officers as a group (10 persons)
                
                
                880,476
                
                
                1.67
      percent





(1)           Quicksilver
Resources Inc. received these Common Units as partial consideration in exchange
for the Quicksilver assets and equity interests acquired by the Partnership on
November 1, 2007.  Its ownership is shown as reported on the Amended
Statement of Beneficial Ownership on Form SC 13D/A filed on April 7,
2009.  The address for Quicksilver is 777 West Rosedale Street, Fort
Worth, Texas 76104.


31





(2)           The
Baupost Group, L.L.C., SAK Corporation and Seth A. Klarman’s ownership is shown
as reported on the Statement of Ownership on Form SC 13G/A filed on February 12,
2009.  The address for each owner is 10 St. James Avenue, Suite 1700,
Boston, Massachusetts 02116.





(3)           Messrs. Breitenbach
and Washburn collectively own 100 percent of the outstanding shares of BreitBurn
Energy Corporation.





(4)           Includes
units beneficially owned by BreitBurn Energy Corporation.





(5)           Less
than one percent.


32


Item
13. Certain Relationships and Related Transactions and Director
Independence.




For a
discussion of director independence, see Item 10 “Directors and Executive
Officers of Our General Partner.”




Affiliates
of our general partner, including directors and executive officers of our
general partner, own 880,476 Common Units representing a 1.67 percent limited
partner interest in us.




Mr.
Willis Jackson Washburn, who is the brother of Mr. Halbert S. Washburn, is an
employee of BreitBurn Management and serves as an officer of our general partner
and of BEH, the indirect owner of BEC, our predecessor.




Distributions
and Payments to Affiliates of Our General Partner




We will
generally distribute all our available cash to all unitholders, including
affiliates of our general partner (as the holders of an aggregate of 880,476
Common Units).




Upon our
liquidation, the limited partners, including affiliates of our general partner,
will be entitled to receive liquidating distributions according to their
particular capital account balances.




Contribution,
Conveyance and Assumption Agreement




We
entered into a Contribution, Conveyance and Assumption Agreement to effect,
among other things, the transfer of certain properties from BEC to us at the
closing of our initial public offering.  Pending the receipt of
certain governmental and third-party consents to the transfer of certain leases,
BEC continues to hold title to these leases.  We entered into an
Operations and Proceeds Agreement with our wholly-owned operating subsidiary
related to these leases.  Under the Operations and Proceeds Agreement,
BEC conducts the operations related to these leases.  Any net profit
relating to these leases is payable by BEC to our operating subsidiary, and any
net loss relating to these leases is payable by our operating subsidiary to
BEC.  In addition, our operating subsidiary entered into a Surface
Operating Agreement with BEC and BreitBurn Corp, under which BEC and BreitBurn
Corp conduct all surface operations with respect to a lease transferred to us at
closing, pending the receipt of consent to the assignment of the related surface
use agreement to us.  Our operating subsidiary reimbursed BEC and
BreitBurn Corp for all costs incurred in conducting these surface
operations.




Under the
Contribution Agreement, BEC agreed to indemnify us for four years against
certain potential environmental liabilities associated with the operation of the
assets and occurring before the closing date of our initial public offering and
against claims for covered environmental liabilities made before the fourth
anniversary of the closing of our initial public offering.  The
obligation of BEC will not exceed $5.0 million, and BEC will not have any
indemnification obligation until our losses exceed $500,000 in the aggregate,
and then only to the extent such aggregate losses exceed
$500,000.  BEC will have no indemnification obligations with respect
to environmental matters for claims made as a result of changes in environmental
laws promulgated after the closing date of our initial public
offering.  Additionally, BEC agreed to indemnify us for losses
attributable to title defects for four years after the closing of our initial
public offering, and indefinitely for losses attributable to retained assets and
liabilities and income taxes attributable to pre-closing operations and the
formation transactions.  Furthermore, we agreed to indemnify BEC for
all losses attributable to the post-closing operations of the assets contributed
to us, to the extent not subject to their indemnification
obligations.




Second
Amended and Restated Administrative Services Agreement




On August
26, 2008, BreitBurn Management entered into a Second Amended and Restated
Administrative Services Agreement (as amended, the “Administrative Services
Agreement”) with BEC, pursuant to which BreitBurn Management manages the
operations of BEC and provides administrative services such as accounting,
corporate development, finance, land, legal and engineering to BEC. Pursuant to
the Administrative Services Agreement, BEC agreed to pay BreitBurn Management a
monthly fixed fee of $775,000 for indirect costs, including general and
administrative costs, relating to the performance of Services (as defined in the
Administrative Services Agreement) until December 31, 2008.  After
December 31, 2008, BEC will pay BreitBurn Management a negotiated fixed fee for
such indirect costs that will be determined on an annual basis in good faith by
the parties pursuant to the procedures and standards set forth in the
Administrative Services Agreement. BEC will also reimburse BreitBurn Management
monthly for all Third Party Costs, LTIP Costs and Direct Costs (as such terms
are defined in the Administrative Services Agreement) relating to the
performance of services for BEC.


33




The
initial term of the Administrative Services Agreement is August 26, 2008 through
December 31, 2013. In the absence of written notice delivered to the other party
by either party to the agreement of its intention not to continue under the
terms of the agreement, given no later than 180 days before December 31, 2013,
and each successive anniversary thereof, the term of the agreement will be
extended for one additional calendar year until either or both parties have
given notice of their intention to terminate.





BEC may
terminate the Administrative Services Agreement by giving written notice of such
termination to BreitBurn Management upon (a) a BEC Change in Control (as defined
in the Administrative Services Agreement), (b) a BBEP Change in Control (as
defined in the Administrative Services Agreement), (c) a BreitBurn Management
Change in Control (as defined in the Administrative Services Agreement), or (d)
BreitBurn Management's failure to pay employees providing services within 30
days of the date such employees’ payment is due, subject to the terms of the
Administrative Services Agreement. As defined in the Administrative Services
Agreement, a BBEP Change in Control and a BreitBurn Management Change in Control
include a change in control of the Partnership or BreitBurn Management,
respectively, effected through both Halbert Washburn and Randall Breitenbach no
longer being employed as Co-Chief Executive Officers of BreitBurn
GP or BreitBurn Management, respectively. In addition, beginning no earlier
than the day that is 180 days before December 31, 2010, upon 180 days prior
written notice, BEC may provide written notice to BreitBurn Management that BEC
does not believe that BreitBurn Management is devoting adequate time and
resources to BEC, or is not effectively maximizing the value of BEC. Unless the
situation is reasonably corrected by BreitBurn Management within the ensuing 180
days, then BEC may elect to terminate the Administrative Services Agreement
effective as of the end of the 180 day period following the delivery of such
notice by BEC. If the Administrative Services Agreement is terminated by BEC
prior to December 31, 2013, under certain circumstances, BEC will be obligated
to promptly reimburse BreitBurn Management for its reasonable expenses incurred
in reducing its staffing, including, but not limited to reasonable severance
payments, up to a maximum of the lesser of two times the monthly fixed fee in
effect at the date of such termination and $2,000,000.





BreitBurn
Management may terminate the Administrative Services Agreement by giving written
notice of such termination to BEC upon the occurrence of a BEC Change in
Control.




In the
event that BEC, the Partnership or BreitBurn Management becomes bankrupt or
dissolves or commences liquidation or winding-up, the Administrative Services
Agreement will automatically terminate without notice to the other
party.




Omnibus
Agreement




On August
26, 2008, the Partnership entered into an Omnibus Agreement with BEC, BEC’s
general partner, BEH, our general partner and BreitBurn Management, which sets
forth certain agreements with respect to conflicts of interest.





BEC has
agreed that the Partnership has a preferential right with respect to any
business opportunity with respect to either (a) any third party upstream oil and
gas properties and any related midstream assets, if the fair market value of the
estimated proved developed reserves related to such properties constitutes 70%
or more of the fair market value of such properties and related midstream assets
(as determined in good faith by the board of directors of our general partner),
or (b) any third party oil and gas properties and any related midstream assets
located within one mile of any oil and gas properties and any related midstream
assets that are owned by the Partnership, our general partner or any of their
subsidiaries, and in which no interest is owned by BEH, BEC’s general partner,
BEC or any of their subsidiaries.


34


The
Partnership has agreed that BEC has a preferential right with respect to any
business opportunity with respect to either (a) any third party upstream oil and
gas properties and any related midstream assets, if the fair market value of the
estimated proved developed reserves related to such properties constitutes less
than 70% of the fair market value of such properties and related midstream
assets (as determined in good faith by the board of directors of BEH), or (b)
any oil and gas properties and any related midstream assets located within one
mile of any oil and gas properties and any related midstream assets that are
owned by BEH, BEC’s general partner, BEC or any of their subsidiaries, and in
which no interest is owned by the Partnership, our general partner or any of
their subsidiaries.




If the
Partnership or BEC is presented with a business opportunity with respect to any
oil and gas properties and any related midstream assets located within one mile
of any oil and gas properties that are jointly owned by the Partnership and BEC,
the Partnership or BEC, as applicable, must give prompt written notice to the
other party of such business opportunity. The Partnership and BEC have agreed to
discuss the pursuit of a joint bid for such business opportunity on the basis of
their existing ownership interests, including their respective operating
control, in the jointly owned properties. If the parties cannot agree on the
terms upon which to proceed with a joint bid within 15 business days, then each
of the Partnership and BEC will be free to pursue an independent bid for such
business opportunity. As of August 26, 2008, the properties jointly owned by the
Partnership and BEC are properties in the East Coyote and Sawtelle fields
in the Los Angeles Basin in California.




BEC has
agreed that the Partnership has a right of first offer with respect to the sale
by BEC, BEH, BEC’s general partner or any of their subsidiaries of all upstream
oil and gas properties and related midstream assets owned by such
parties.





The
Omnibus Agreement may be terminated (a) by BEH upon notice to the other parties
upon a change of control of BEC, (b) by our general partner upon notice to the
other parties upon a change of control of the Partnership, and (c ) by either
BEH or our general partner at such time as the Partnership and BEC cease to be
under common management or upon the termination of the Administrative Services
Agreement; provided, however, that if the Administrative Services Agreement is
terminated under certain circumstances, the Omnibus Agreement may not be
terminated by BEH until 180 days after termination of the Administrative
Services Agreement.




Related
Party Transaction Policy and Procedures




Our
general partner has adopted a written policy for the review of transactions with
related parties.  The policy requires review, approval or ratification
of transactions exceeding $120,000 in which the Partnership is a participant and
in which a director or executive officer of our general partner, an owner of a
significant amount of our voting securities or an immediate family member of any
of the foregoing persons has a direct or indirect material
interest.  These transactions must be reviewed for pre-approval by the
Co-Chief Executive Officers if the related party is an executive officer, by the
Audit Committee if the related party is a significant unit owner or a Co-Chief
Executive Officer, by the Chairman of the Audit Committee if the related party
is a director or by a member of the Audit Committee if the related party is the
Chairman of the Audit Committee.  Only those transactions that are in,
or are not inconsistent with, the best interests of the Partnership, taking into
consideration whether they are on terms comparable to those available with an
unrelated third party and the related party’s interest in the transaction, shall
be approved.


35


Item
14. Principal Accountant Fees and Services.




The audit
committee of the board of directors of BreitBurn GP LLC selected Pricewaterhouse
Coopers LLP, Independent Registered Public Accounting Firm, to audit the
consolidated financial statements of BreitBurn Energy Partners L.P. for the 2008
calendar year.  The audit committee’s charter which is available on
our website at www.breitburn.com requires the audit committee to approve in
advance all audit and non-audit services to be provided by our independent
registered public accounting firm.  All services reported in the
audit, audit-related, tax and all other fees categories below with respect to
this report for the year ended December 31, 2008 were approved by the audit
committee.




On an
accrual basis, fees paid to PricewaterhouseCoopers LLP for 2008 and 2007 are as
follows:




Principal Accountant Fees and
      Services
                
                2008
                
                
                2007Audit
      fees (1)
                
                $
                1,771,367
                
                
                $
                1,049,800Audit-related
      fees (2)
                
                
                144,206
                
                
                
                272,676Tax
      fees (3)
                
                
                694,470
                
                
                
                962,900$
                2,610,043
                
                
                $
                2,285,376







(1)           Audit
fees represent fees provided for audits of our annual financial statements,
review of our quarterly financial statements, Sarbanes-Oxley internal control
over financial reporting review and work performed as part of our registration
filings.




(2)           Audit-related
fees were primarily for carve-out audits related to acquisitions and our benefit
plan.




(3)           Tax
fees are related to tax preparation as well as the preparation of Forms K-1 for
our unitholders.


36


PART
IV




Item
15. Exhibits, Financial Statement Schedules.




(a)           (1)
Financial Statements




See
“Index to the Consolidated Financial Statements” set forth on Page F-1 of the
Original 10-K.




(2)
Financial Statement Schedules




All
schedules are omitted because they are not applicable or the required
information is presented in the financial statements or notes
thereto.




(3)
Exhibits




NUMBER
            
            DOCUMENT3.1
            
            Certificate
      of Limited Partnership of BreitBurn Energy Partners L.P. (incorporated
      herein by reference to Exhibit 3.1 to Amendment No. 1 to Form S 1 filed on
      July 13, 2006).3.2
            
            First
      Amended and Restated Agreement of Limited Partnership of BreitBurn Energy
      Partners L.P. (incorporated herein by reference to Exhibit 3.1 to the
      Current Report on Form 8 K dated October 10, 2006 and filed on October 16,
      2006).3.3
            
            Amendment
      No. 1 to the First Amended and Restated Agreement of Limited Partnership
      of BreitBurn Energy Partners L.P. (incorporated herein by reference to
      Exhibit 3.1 to the Current Report on Form 8 K dated June 17, 2008 and
      filed on June 23, 2008).3.4
            
            Second
      Amendment and Restated Limited Liability Company Agreement of BreitBurn
      GP, LLC (incorporated herein by reference to Exhibit 3.2 to the Current
      Report on Form 8 K dated June 17, 2008 and filed on June 23,
      2008).4.1
            
            Registration
      Rights Agreement, dated as of November 1, 2007, by and among BreitBurn
      Energy Partners L.P. and Quicksilver Resources Inc. (incorporated herein
      by reference to Exhibit 4.2 to the Current Report on Form 8 K dated
      November 1, 2007 and filed on November 6, 2007).4.2
            
            Unit
      Purchase Rights Agreement, dated as of December 22, 2008, between
      BreitBurn Energy Partners L.P. and American Stock Transfer & Trust
      Company LLC (incorporated herein by reference to Exhibit 4.1 to the
      Current Report on Form 8 K dated December 22, 2008 and filed on December
      23, 2008).10.1
            
            Amended
      and Restated Agreement of Limited Partnership of BreitBurn Energy Partners
      I, L.P. dated May 5, 2003 (incorporated herein by reference to Exhibit
      10.2 to the Current Report on Form 8 K dated May 25, 2007 and filed May
      29, 2007).10.2
            
            Contribution,
      Conveyance and Assumption Agreement, dated as of October 10, 2006, by and
      among Pro GP Corp., Pro LP Corp., BreitBurn Energy Corporation, BreitBurn
      Energy Company L.P., BreitBurn Management Company, LLC, BreitBurn GP, LLC,
      BreitBurn Energy Partners L.P., BreitBurn Operating GP, LLC and BreitBurn
      Operating L.P. (incorporated herein by reference to Exhibit 10.2 to the
      Current Report on Form 8 K dated October 10, 2006 and filed on October 16,
      2006).





37





NUMBER
            
            DOCUMENT10.3
            
            Administrative
      Services Agreement, dated as of October 10, 2006, by and among BreitBurn
      GP, LLC, BreitBurn Energy Partners L.P., BreitBurn Operating L.P. and
      BreitBurn Management Company, LLC (incorporated herein by reference to
      Exhibit 10.4 to the Current Report on Form 8 K dated October 10, 2006 and
      filed on October 16, 2006).10.4†
            
            BreitBurn
      Energy Partners L.P. 2006 Long Term Incentive Plan effective as of October
      10, 2006 (incorporated herein by reference to Exhibit 10.5 to Amendment
      No. 3 to Form S 1 for BreitBurn Energy Partners L.P. filed on September
      19, 2006).10.5†
            
            BreitBurn
      Energy Company L.P. Unit Appreciation Plan for Officers and Key
      Individuals (incorporated herein by reference to Exhibit 10.6 to Amendment
      No. 3 to Form S 1 for BreitBurn Energy Partners L.P. filed on September
      19, 2006).10.6†
            
            BreitBurn
      Energy Company L.P. Unit Appreciation Plan for Employees and Consultants
      (incorporated herein by reference to Exhibit 10.7 to Amendment No. 3 to
      Form S 1 for BreitBurn Energy Partners L.P. filed on September 19,
      2006).10.7†
            
            Amendment
      No. 1 to the BreitBurn Energy Company L.P. Unit Appreciation Plan for
      Officers and Key Individuals (incorporated herein by reference to Exhibit
      10.14 to Amendment No. 5 to Form S 1 for BreitBurn Energy Partners L.P.
      filed on October 2, 2006).10.8†
            
            Amendment
      to the BreitBurn Energy Company L.P. Long Term Incentive Plan
      (incorporated herein by reference to Exhibit 10.15 to Amendment No. 5 to
      Form S 1 for BreitBurn Energy Partners L.P. filed on October 2,
      2006).10.9†
            
            BreitBurn
      Energy Company L.P. Long Term Incentive Plan (incorporated herein by
      reference to Exhibit 10.8 to Amendment No. 3 to Form S 1 for BreitBurn
      Energy Partners L.P. filed on September 19, 2006).10.10†
            
            Form
      of BreitBurn Energy Partners L.P. 2006 Long Term Incentive Plan Restricted
      Phantom Units Award Agreement (for Directors) (incorporated herein by
      reference to Exhibit 10.16 to the Annual Report on Form 10 K for the year
      ended December 31, 2006 and filed on April 2, 2007).10.11†
            
            Form
      of BreitBurn Energy Partners L.P. 2006 Long Term Incentive Plan
      Performance Unit Based Award Agreement (incorporated herein by reference
      to Exhibit 10.17 to the Annual Report on Form 10 K for the year ended
      December 31, 2006 and filed on April 2, 2007).10.12
            
            Amended
      and Restated Asset Purchase Agreement, dated as of May 16, 2007, by and
      among BreitBurn Operating L.P. and Calumet Florida, LLC (incorporated
      herein by reference to Exhibit 10.2 to the Current Report on Form 8 K
      dated May 24, 2007 and filed on May 31, 2007).10.13
            
            Unit
      Purchase Agreement, dated as of May 16, 2007, by and among BreitBurn
      Energy Partners L.P. and each of the Purchasers set forth therein
      (incorporated herein by reference to Exhibit 10.1 to the Current Report on
      Form 8 K dated May 24, 2007 and filed on May 31, 2007).10.14
            
            Unit
      Purchase Agreement, dated as of May 25, 2007, by and among BreitBurn
      Energy Partners L.P. and each of the Purchasers set forth therein
      (incorporated herein by reference to Exhibit 10.3 to the Current Report on
      Form 8 K dated May 25, 2007 and filed on May 29,
  2007).


38





NUMBER
                  
                  DOCUMENT10.15
                  
                  ORRI
      Distribution Agreement Limited Partner Interest Purchase and Sale
      Agreement, dated as of May 24, 2007, by and among BreitBurn Operating L.P.
      and TIFD X III LLC (incorporated herein by reference to Exhibit 10.1 to
      the Current Report on Form 8 K dated May 25, 2007 and filed May 29,
      2007).10.16
                  
                  Contribution
      Agreement, dated as of September 11, 2007, between Quicksilver Resources
      Inc. and BreitBurn Operating L.P. (incorporated herein by reference to
      Exhibit 10.4 to the Current Report on Form 8 K dated November 1, 2007 and
      filed November 6, 2007).10.17
                  
                  Amendment
      to Contribution Agreement, dated effective as of November 1, 2007, between
      Quicksilver Resources Inc. and BreitBurn Operating L.P. (incorporated
      herein by reference to Exhibit 10.5 to the Current Report on Form 8 K
      dated November 1, 2007 and filed November 6, 2007).10.18
                  
                  Amended
      and Restated Unit Purchase Agreement, dated as of October 26, 2007, by and
      among BreitBurn Energy Partners L.P. and each of the Purchasers set forth
      therein (incorporated herein by reference to Exhibit 10.1 to the Current
      Report on Form 8 K dated November 1, 2007 and filed November 6,
      2007).10.19
                  
                  Amended
      and Restated Credit Agreement, dated November 1, 2007, by and among
      BreitBurn Operating L.P., as borrower, BreitBurn Energy Partners L.P., as
      parent guarantor, and Wells Fargo Bank, National Association, as
      administrative agent (incorporated herein by reference to Exhibit 10.3 to
      the Current Report on Form 8 K dated November 1, 2007 and filed November
      6, 2007).10.20†
                  
                  Employment
      Agreement dated December 26, 2007 among BreitBurn Management Company, LLC,
      BreitBurn GP, LLC, Pro GP Corp. and Mark L. Pease (incorporated herein by
      reference to Exhibit 10.1 to the Current Report on Form 8 K dated December
      26, 2007 and filed December 27, 2007).10.21†
                  
                  First
      Amendment to the BreitBurn Energy Partners L.P. 2006 Long Term Incentive
      Plan dated December 26, 2007 (incorporated herein by reference to Exhibit
      10.1 to the Current Report on Form 8 K dated November 5, 2007 and filed
      December 28, 2007).10.22†
                  
                  Form
      of BreitBurn Energy Partners L.P. 2006 Long Term Incentive Plan Restricted
      Phantom Unit Agreement (Executive Form) (incorporated herein by reference
      to Exhibit 10.1 to the Current Report on Form 8 K dated March 5, 2008 and
      filed March 11, 2008).10.23†
                  
                  Form
      of BreitBurn Energy Partners L.P. 2006 Long Term Incentive Plan Restricted
      Phantom Unit Agreement (Non Executive Form) (incorporated herein by
      reference to Exhibit 10.2 to the Current Report on Form 8 K dated March 5,
      2008 and filed March 11, 2008).10.24†
                  
                  Second
      Amended and Restated Employment Agreement dated December 31, 2007 among
      BreitBurn Management Company, LLC, BreitBurn GP, LLC, Pro GP Corp. and
      Halbert Washburn.10.25†
                  
                  Second
      Amended and Restated Employment Agreement dated December 31, 2007 among
      BreitBurn Management Company, LLC, BreitBurn GP, LLC, Pro GP Corp. and
      Randall Breitenbach.10.26†
                  
                  Employment
      Agreement date January 29, 2008 among BreitBurn Management Company, LLC,
      BreitBurn GP, LLC, Pro GP Corp. and Gregory C. Brown.10.27†
                  
                  Form
      of BreitBurn Energy Partners L.P. 2006 Long Term Incentive Plan Restricted
      Phantom Units Directors’ Award
Agreement.


39





NUMBER
                  
                  DOCUMENT10.28
                  
                  Purchase
      Agreement dated June 17, 2008 by and among Pro LP Corporation, Pro GP
      Corporation and BreitBurn Energy Partners L.P. (incorporated herein by
      reference to Exhibit 10.1 to the Current Report on Form 8 K dated June 17,
      2008 and filed on June 23, 2008).10.29
                  
                  Purchase
      Agreement dated June 17, 2008 by and among Pro LP Corporation, Pro GP
      Corporation and BreitBurn Energy Partners L.P. (incorporated herein by
      reference to Exhibit 10.2 to the Current Report on Form 8 K dated June 17,
      2008 and filed on June 23, 2008).10.30
                  
                  Contribution
      Agreement dated June 17, 2008 by and among BreitBurn Management Company
      LLC, BreitBurn Energy Corporation and BreitBurn Energy Partners L.P.
      (incorporated herein by reference to Exhibit 10.3 to the Current Report on
      Form 8 K dated June 17, 2008 and filed on June 23,
  2008).10.31
                  
                  First
      Amendment to Amended and Restated Credit Agreement, Limited Waiver and
      Consent and First Amendment to Security Agreement by and among BreitBurn
      Operating LP, BreitBurn Energy Partners L.P., as Parent Guarantor, its
      subsidiaries as guarantors, the Lenders and Wells Fargo Bank, National
      Association, as administrative agent for the Lenders (incorporated herein
      by reference to Exhibit 10.4 to the Current Report on Form 8 K dated June
      17, 2008 and filed on June 23, 2008).10.32
                  
                  Amendment
      No. 1 to the Operations and Proceeds Agreement, relating to the Dominguez
      Field and dated October 10, 2006 entered into on June 17, 2008 by and
      between BreitBurn Energy Company L.P. and BreitBurn Operating L.P.
      (incorporated herein by reference to Exhibit 10.6 to the Current Report on
      Form 8 K dated June 17, 2008 and filed on June 23,
  2008).10.33
                  
                  Amendment
      No. 1 to the Surface Operating Agreement dated October 10, 2006 entered
      into on June 17, 2008 by and between BreitBurn Energy Company L.P. and its
      predecessor BreitBurn Energy Corporation and BreitBurn Operating L.P.
      (incorporated herein by reference to Exhibit 10.7 to the Current Report on
      Form 8 K dated June 17, 2008 and filed on June 23,
  2008).10.34†
                  
                  Employment
      Agreement Form for grant of Convertible Phantom units pursuant and subject
      to the terms and conditions of the Convertible Phantom Unit Agreement and
      the Partnership’s 2006 Long Term Incentive Plan (incorporated herein by
      reference to Exhibit 10.9 to the Quarterly Report on Form 10 Q dated June
      30, 2008 and filed on August 11, 2008).10.35†
                  
                  Non
      Employment Agreement Form for grant of Convertible Phantom units pursuant
      and subject to the terms and conditions of the Convertible Phantom Unit
      Agreement and the Partnership’s 2006 Long Term Incentive Plan
      (incorporated herein by reference to Exhibit 10.10 to the Quarterly Report
      on Form 10 Q dated June 30, 2008 and filed on August 11,
      2008).10.36†
                  
                  Amended
      and Restated Employment Agreement dated August 15, 2008 entered into by
      and between BreitBurn Management Company, LLC, BreitBurn GP, LLC and James
      Jackson (incorporated herein by reference to Exhibit 10.1 to the Current
      Report on Form 8 K dated August 15, 2008 and filed on August 18,
      2008).10.37
                  
                  Second
      Amended and Restated Administrative Services Agreement dated August 26,
      2008 entered into by and between BreitBurn Energy Company L.P. and
      BreitBurn Management Company, LLC (incorporated herein by reference to
      Exhibit 10.1 to the Current Report on Form 8 K dated August 26, 2008 and
      filed on September 02,
2008).





40





NUMBER
                  
                  DOCUMENT10.38
                  
                  Omnibus
      Agreement, dated August 26, 2008, by and among BreitBurn Energy Holdings
      LLC, BEC (GP) LLC, BreitBurn Energy Company L.P, BreitBurn GP, LLC,
      BreitBurn management Company, LLC and BreitBurn Energy Partners L.P.
      (incorporated herein by reference to Exhibit 10.2 to the Current Report on
      Form 8 K dated August 26, 2008 and filed on September 02,
      2008).14.1
                  
                  BreitBurn
      Energy Partners L.P. and BreitBurn GP, LLC Code of Ethics for Chief
      Executive Officers and Senior Officers (as amended and restated on
      February 28, 2007) (incorporated herein by reference to Exhibit 14.1 to
      the Current Report on Form 8 K dated February 28, 2007 and filed on March
      5, 2007).21.1
                  
                  List
      of subsidiaries of BreitBurn Energy Partners L.P. (filed as Exhibit 21.1
      to the Original 10-K).23.1
                  
                  Consent
      of PricewaterhouseCoopers LLP (filed as Exhibit 23.1 to the Original
      10-K).23.2
                  
                  Consent
      of Netherland, Sewell & Associates, Inc. (filed as Exhibit 23.2 to the
      Original 10-K).23.3
                  
                  Consent
      of Schlumberger Data and Consulting Services (filed as Exhibit 23.3 to the
      Original 10-K).31.1*
                  
                  Certification
      of Registrant’s Co Chief Executive Officer pursuant to Rule 13a-14(a) of
      the Securities Exchange Act of 1934 and Section 302 of the Sarbanes Oxley
      Act of 2002.31.2*
                  
                  Certification
      of Registrant’s Co Chief Executive Officer pursuant to Rule 13a-14(a) of
      the Securities Exchange Act of 1934 and Section 302 of the Sarbanes Oxley
      Act of 2002.31.3*
                  
                  Certification
      of Registrant’s Chief Financial Officer pursuant to Rule 13a-14(a) of the
      Securities Exchange Act of 1934 and Section 302 of the Sarbanes Oxley Act
      of 2002.32.1
                  
                  Certification
      of Registrant’s Co Chief Executive Officer pursuant to Rule 13a 14(b) of
      the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350, as created
      by Section 906 of the Sarbanes Oxley Act of 2002 (furnished as Exhibit
      32.1 to the Original 10-K).  This certification is being
      furnished solely to accompany this Annual Report on Form 10 K and is not
      being filed for purposes of Section 18 of the Securities Exchange Act of
      1934, as amended, and is not to be incorporated by reference into any
      filing of the Company.32.2
                  
                  Certification
      of Registrant’s Co Chief Executive Officer pursuant to Rule 13a 14(b) of
      the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350, as created
      by Section 906 of the Sarbanes Oxley Act of 2002 (furnished as Exhibit
      32.2 to the Original 10-K). This certification is being furnished solely
      to accompany this Annual Report on Form 10 K and is not being filed for
      purposes of Section 18 of the Securities Exchange Act of 1934, as amended,
      and is not to be incorporated by reference into any filing of the
      Company.32.3
                  
                  Certification
      of Registrant’s Chief Financial Officer pursuant to Rule 13a 14(b) of the
      Securities Exchange Act of 1934 and 18 U.S.C. Section 1350, as created by
      Section 906 of the Sarbanes Oxley Act of 2002 (furnished as Exhibit 32.3
      to the Original 10-K). This certification is being furnished solely to
      accompany this Annual Report on Form 10 K and is not being filed for
      purposes of Section 18 of the Securities Exchange Act of 1934, as amended,
      and is not to be incorporated by reference into any filing of the
      Company.


*
            Filed
      herewith.


†
            Management
      contract or compensatory plan or
arrangement.


41


SIGNATURES




Pursuant to the requirements of the
Securities Exchange Act of 1934, the Registrant has duly caused this report to
be signed on its behalf by the undersigned thereunto duly
authorized.




BREITBURN
      ENERGY PARTNERS L.P.By:
                BREITBURN
      GP, LLC,Its
      General PartnerDated:  April
      17, 2009
                By:
                /s/Halbert S. WashburnHalbert
      S. WashburnCo-Chief
      Executive OfficerDated:  April
      17, 2009
                By:
                /s/Randall H.
BreitenbachRandall
      H. BreitenbachCo-Chief
      Executive Officer




Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.




Name
            
            Title
            
            Date/s/Halbert S. Washburn
            
            Co-Chief
      Executive Officer and Chairman of the Board of
            
            April
      17, 2009Halbert
      S. Washburn
            
            Breitburn
      GP, LLC(Principal
      Executive Officer)/s/Randall H. Breitenbach
            
            Co-Chief
      Executive Officer and Director of
            
            April
      17, 2009Randall
      H. Breitenbach
            
            BreitBurn
      GP, LLC(Principal
      Executive Officer)/s/James G. Jackson
            
            Chief
      Financial Officer of
            
            April
      17, 2009James
      G. Jackson
            
            BreitBurn
      GP, LLC(Principal
      Financial Officer)/s/Lawrence C. Smith
            
            Controller
      of
            
            April
      17, 2009Lawrence
      C. Smith
            
            BreitBurn
      GP, LLC(Principal
      Accounting Officer)/s/John R. Butler, Jr.
            
            Director
      of
            
            April
      17, 2009John
      R. Butler, Jr.
            
            BreitBurn
      GP, LLC/s/David B. Kilpatrick
            
            Director
      of
            
            April
      17, 2009David
      B. Kilpatrick
            
            BreitBurn
      GP, LLC/s/Gregory J. Moroney
            
            Director
      of
            
            April
      17, 2009Gregory
      J. Moroney
            
            BreitBurn
      GP, LLC/s/Charles S. Weiss
            
            Director
      of
            
            April
      17, 2009Charles
      S. Weiss
            
            BreitBurn
      GP, LLC


42