BP 2009 Annual Report Download - page 16

BP Annual Report and Accounts 2009
Business review
14
Our strategy
The priorities that drove our success in 2009 –
safety, people and performance – remain the
foundation of our agenda as we build on our
momentum and work to further enhance our
competitive position.
Our strategy is to invest competitively to grow oil and gas production
while working to drive performance across the group through enhanced
operating efficiency, capital efficiency and cost efficiency.
To meet growing world demand, BP is committed to exploring,
developing and producing more fossil fuel resources; manufacturing,
processing and delivering better and more advanced products; and
enabling the transition to a lower-carbon future. We aim to do this while
operating safely, reliably and in compliance with the law. We strive to run
our business within the discipline of a clear financial framework.
In 2009, we improved our overall competitive performance by
enhancing operating performance and reducing complexity and costs.
We believe we can continue to compete successfully through our ability
to access resources and deliver high-quality products and service to our
customers. We intend to remain focused on the application of technology
and developing relationships based on a commitment to long-term
partnerships and mutual advantage. Our intention is to generate and
sustain business momentum and growth through a rigorous process
of continuous improvement and an ongoing focus on safety, people
and performance.
Safety, reliability, compliance and continuous improvement
Safe, reliable and compliant operations remain the group’s first priority.
A key enabler for this is the BP operating management system (OMS),
which provides a common framework for all BP operations, designed to
achieve consistency and continuous improvement in safety and
efficiency. OMS includes mandatory practices, such as integrity
management and incident investigation, which are designed to address
particular risks. In addition, it enables each site to focus on the most
important risks in its own operations and sets out procedures on how to
manage them in accordance with the group-wide framework. Further
information on our safety priorities and performance can be found on
page 46.
The right people, skills and capability
It is vital that we develop and deploy people with the skills, capability
and behaviours required to meet our objectives. Despite a tight global
recruitment market for some of our core technical disciplines, we have
been successful in building capacity and getting the right people with the
right skills in the right place. We are now going further, strengthening the
culture within BP through a commitment to continuous improvement in
operations and enhancing the capabilities, technical expertise and
organizational quality needed to drive performance.
Our people strategy has already resulted in refreshed group
leadership and senior management teams, recruitment focused on
individuals with strong operational and technical expertise, and
appropriate reward for performance at all levels.
Enhanced performance and efficiency
Our strategy aims to create value for shareholders by investing to deliver
growth in our Exploration and Production business together with
enhanced efficiency and high-quality earnings and returns throughout
our operations.
In Exploration and Production, our strategy is to invest to grow
production safely, reliably and efficiently. We intend to achieve this by
strengthening our portfolio of leadership positions in the world’s most
prolific hydrocarbon basins, enabled by the development and application
of technology and the building of strong relationships based on mutual
advantage. We also intend to sustainably drive cost and capital efficiency
in accessing, finding, developing and producing resources, enabled by
deep technical capability and a culture of continuous improvement.
In Refining and Marketing, our strategic focus is on enhancing
portfolio quality, integrating activities across value chains and
performance efficiency. We expect to continue building our business
around advantaged assets in material and significant energy markets
while improving the safety and reliability of our operations. Our objective
is to achieve sector-leading levels of performance on a sustainable basis.
To achieve this, we need to continue upgrading the manufacturing
capabilities within our integrated fuels value chains to achieve the best
capacity utilization and margin capture. We continue to explore
appropriate opportunities to deploy downstream capital into faster-
growing non-OECD markets. We also intend to continue our selective
investment in our international businesses, which include
petrochemicals and lubricants, where we see potential to deliver strong
and sustainable returns.
In Alternative Energy, we have focused our investments in the
areas where we believe we can create the greatest competitive
advantage. We have substantial businesses in wind and solar power and
are developing advanced biofuels and low-carbon energy technologies
such as hydrogen power and carbon capture and storage.
Our determination to drive efficiency through our businesses has
proved vital to our performance during a period of recession and we
believe that it will remain critical to our future prospects as the global
economy recovers and evolves.
Looking further ahead
As discussed in the ‘Our market’ section of this Annual Report and
Accounts (see pages 11 to 13), we expect that the world will require a
more diverse energy mix as the basis for a secure supply of energy over
time. We intend to play a central role in meeting the world’s continued
need for hydrocarbons, with our Exploration and Production and Refining
and Marketing activities remaining at the core of our strategy. We are
also creating long-term options for the future in new energy technology
and low-carbon energy businesses. Current investment is focused on
wind, solar and biofuels as potential sources of resource diversification
for the world, and we are investing in carbon capture and storage as an
enabling technology. We believe that this focused portfolio has the
potential to be a material source of value creation for BP in the longer
term (see pages 42 to 43). We are also enhancing our capabilities in
natural gas, which is likely to play a greater role as a key part of the
energy future. We intend to lead and shape this transition, including
through the application of advanced technology to unlock sources of
unconventional gas, while working to achieve sector-leading levels of
return for our shareholders.