BP 2011 Annual Report Download - page 17

Business review: Group overview
BP Annual Report and Form 20-F 2011 15
Safety
During the year, we reorganized our upstream segment to improve clarity and
accountability. We introduced new systems and technologies to further enhance
oversight of operations. We continued to increase the capacity of our independent
safety and operational risk organization, and recruited experts from other high-
hazard industries to add new expertise and perspectives. We also renewed the
company’s performance and reward systems, values and code of conduct, which
require whoever works for BP to put safety first.
At the front line, we shut down platforms and operations to make necessary
upgrades. We set new, voluntary standards for blowout preventers, which shut
off the flow of oil in an emergency. We also designed a new type of capping
stack, which now stands ready for deployment anywhere in the world in the
event of a leak in deep water.
Trust
Looking back over events in the Gulf of Mexico, I am proud of how BP responded.
Just in financial terms, during 2010 and 2011 combined we made a pre-tax cash
outlay of more than $26 billion to cover oil spill response costs, meet claims
and litigation expenses, support research, promote tourism and help restore the
environment. The test of corporate responsibility is whether a company follows
up its words with actions. I believe we have. And we will continue to do so.
During the year we were invited to 25 countries to share what we have
learned in the Gulf. In turn, we have gone out to gain insights from organizations
in other high-hazard sectors, including NASA, the UK Atomic Energy Authority and
various naval bodies. We will keep listening to others and applying what we learn.
Value
As I write this letter, the market value of the company remains significantly
lower than it was before the incident. Our 10-point plan shows our belief that the
company can realize improved returns for shareholders. The plan sets out what
you can expect from us, and what you will be able to measure, over the next
three years.
• Firstandforemost,youwillseeacontinuing,relentlessfocusonsafetyandrisk
management.
• Youwillseethecompanyplaytoitsstrengths–exploration;managing
deepwater activity; giant fields; gas supply chains; our world-class downstream
business; and our capabilities in developing technology and building relationships.
• Youwillseeacompanythatissimplerandmorefocusedasaresultofamajor
divestment programme.
• Youwillseeacompanythatisorganizedeffectivelyandappliesitsstandards
consistently.
• Youwillseemorevisibilityfromusonourindividualbusinesses.
• Youwillbeabletomeasuretheeffectsofactiveportfoliomanagement,
as we invest more in our areas of strength and generate cash through
further divestments.
• Youwillbeabletomeasurethecontributionofnewupstreamprojects
with higher margins, as they come onstream over the next three years.
• Youwillbeabletomeasureoperatingcashow,whichweexpecttobearound
50% higher by 2014.a
Above During the
year BP gained its first
US exploration drilling
permit since the 2010
Deepwater Horizon oil
spill – for the Kaskida
field, Gulf of Mexico.
a See footnote c on page 39.