BP 2011 Annual Report Download - page 29

Business review: Group overview
BP Annual Report and Form 20-F 2011 27
BP’s distinctive capabilities and sources of value
By operating across the full hydrocarbon value chain we believe we can create
more value for shareholders, as benefits and costs can often be shared by our
two segments. We can develop shared functional excellence more efficiently
in areas such as safety and operational risk, environmental and social practices,
procurement, technology and treasury management.
We have a distinctive integrated supply and trading function, which aims
to maximize the value of our production while ensuring our refineries are fully
supplied. We buy and sell at each stage in the value chain to optimize value for
the group, often selling our own production and buying from elsewhere to satisfy
demand from our refineries and customers. The function also creates value
through entrepreneurial trading, where our presence across the major energy
trading hubs of the world provides access to vital information on the fundamentals
of markets that are increasingly connected.
We consider our ability to build a wide range of strong, long-term
relationships to be both a key strength and crucial to our success. We form
partnerships with national oil companies and our international oil company
peers. We partner with universities and governments in pursuit of improving the
technologies available to us, in order to enhance our operations and develop new
products. We also actively participate in industry bodies such as the American
Petroleum Institute and the Marine Well Containment Company in the US and the
Oil Spill Preventions and Response Advisory Group in the UK. Regular review and
audit processes enable us to maintain strong links with contractors and suppliers.
We work with our partners through the management frameworks embedded
in our joint venture and shareholder agreements to ensure safe and reliable
operations, and for our mutual commercial benefit.
Left Employees at
Prudhoe Bay – one
of the 15 North Slope
oilfields that BP
operates in Alaska.
Right During 2011, full
commercial operations
started at Cedar
Creek 2 wind farm in
Colorado.
We believe our development and application of technology represents a
distinctive capability that is central to our reputation and competitive advantage.
For us, technology is the practical application of scientific knowledge to manage
risks, capture business value and inform strategy development. This includes
the research, development, demonstration and acquisition of new technical
capabilities and support for the deployment of BP’s know-how.
We monitor the potential opportunities and risks presented by emerging
science, interdisciplinary innovation and new players; natural resource issues and
climate concerns; and evolving policy concerns, including the current emphasis on
energy security and efficiency.
Our technology advisory council, which is comprised of eminent
technology leaders from business and academia, advises the board and executive
management on research and technology matters.
In detail
For more information,
see Technology.
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