BP 2008 Annual Report Download - page 4

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.
Throughout the year the board has supported Tony and
his executive team in reforming the way in which the
group works to ensure that everyone within BP is clear
on its long-term purpose. It is vital that the role of the
international oil company is defined and understood both
inside and outside the organization. While sticking to its
principles, BP needs to be flexible in the manner in which
business is approached, developing a diverse portfolio of
projects, with a robust cost structure, enabling the group
to perform throughout the cycle.
All our activities need to take place against a very
clear view of risk. Events during the year have powerfully
reinforced the need for boards to have a very clear
understanding of the risks their businesses face. I believe
the BP board and its committees have set a high
standard in this regard and we continue to improve
the manner in which we understand and evaluate
risks whether they be strategic, geopolitical, compliance
or operational. No business can be without risk. Indeed
it is by taking strategic and commercial risks that we
earn a return.
We have had some notable operational and
engineering successes in the year, which are described
within this Annual Report and Accounts. There are
several I could mention, including restoring economic
capability at the Texas City refinery, but I would
particularly like to focus on the Gulf of Mexico, which
is a proving to be a showcase for BP’s deepwater
skills and technology. BP is now the number one
producer there and Thunder Horse, the world’s largest
semi-submersible platform, is on track to reach capacity
of about 280,000boe/d in 2009. Thunder Horse is
expected to be the second biggest producing field in the
US and is a powerful symbol of what BP can achieve.
I am pleased we have reached an amicable settlement
with our partners in our Russian joint venture, TNK-BP.
This means BP has retained 50% ownership of what is
an important option in one of the world’s most prolifi c
hydrocarbon provinces.
I would not normally single out individual
executives, but I do want to pay tribute to the work
that Bob Dudley has done as chief executive of
TNK-BP. During his five-year tenure he transformed
TNK-BP and it now leads the Russian oil industry on
the basis of production growth, reserves replacement
and total shareholder return. I am delighted that Bob
will join the BP board in April. As a managing director,
he will assume responsibility for broad oversight of
the group’s activities in the Americas and Asia. We had a
settled board for much of 2008, but we expect Bob to be
the first of several new appointments as we refresh the
cadre of non-executive directors through 2009.
In the past 12 years the energy industry has
consolidated and taken major technical steps forward,
beginning production in some of the more remote areas
of the world, such as the deepwater Gulf of Mexico and
the Russian Arctic. Our role has been defi ned and
redefined and BP has led the way in accepting the need
to tackle the threat of climate change. Throughout that
time the BP board has had outstanding members and,
without exception, I have worked with a group of
extremely talented executives.
I would like to thank all my board and executive
colleagues past and present, and all BP’s employees.
I would also like to thank the two company secretaries,
Judith Hanratty and David Jackson, who have provided
me with admirable support during my term. Finally,
I thank all our shareholders for their support. During
2009 we are celebrating BP’s centenary and I am
confident that BP can face the next 100 years with
pride and a renewed sense of purpose. •
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