BP 2008 Annual Report Download - page 3

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BP Annual Report and Accounts 2008
Chairman’s letter
2008 was a year we will all remember. There are
few precedents in history for such a rapid and dramatic
change in the business environment. In the space of a
few months we went from a record oil price of more
than $140 per barrel, and BP reporting two consecutive
quarters of record profi ts for the group, to a recession
in most of our major markets. Despite this changing
environment, I am glad to say that BP is in an enviably
strong position in terms of its balance sheet, its assets
and its people.
That strength is in no small part due to the period
of critical self-examination the group has undergone
since 2005. The resulting strategy, devised by Tony
Hayward and his team and endorsed by the board,
is already bearing fruit and has put us in a much better
position to weather the savage economic storms we
now face.
The price of oil ended the year at its lowest level
for more than four years. That has obviously affected
our fi nancial performance. The board understands the
importance of the dividend to investors in these diffi cult
times and, despite the weaker environment, we have
held the quarterly dividend to be paid in March at
14 cents per share, compared with 13.525 cents per
share for the same quarter of 2007. In sterling terms,
the quarterly dividend is 9.818 pence per share,
compared with 6.813 pence per share for the same
quarter of 2007. During the year $2.9 billion of shares
were repurchased for cancellation, compared with
$7.5 billion in 2007. In response to feedback from
investors we are now weighting shareholder returns
towards dividends, as opposed to buybacks.
The search for my successor has unfortunately
taken longer than originally expected, in part due to
the turbulent business environment. It is important that
we fi nd the right person and we envisage making an
announcement in the coming months. In the meantime
I have agreed, at the board’s request, to stay on as
chairman and will seek re-election.
So, this will be my last annual general meeting.
It has truly been an honour for me to serve 12 years as
chairman – and before that as a director – of what is one
of the world’s great enterprises. During that time I have
seen BP constantly evolve and, by most measures,
nearly double in size. But the underlying principles of
the international oil company’s business model continue
to endure. BP and its peers make the energy markets
work, by forming partnerships with resource-holding
governments and applying our technology to bringing
supplies of energy to millions of customers, every day.
2008 has been a reminder that the world economy
depends on our efforts.
Gathering
pace
Peter Sutherland Chairman
24 February 2009
Highlights
• Dramatic change in business environment.
• BP in strong position.