BP 2014 Annual Report Download - page 12

Group chief executive’s letter
Dear fellow shareholder,
The year 2014 was pivotal for BP. Despite the increasingly challenging business
environment, we completed the 10-point plan we had set out in 2011 to make BP a safer,
stronger, better performing business. Compared with three years ago, we have reduced
safety-related incidents, delivered strong operating efficiencies and met our target to
increase operating cash flow by more than 50%.
Our performance is important, not only because we achieved our targets, but because we
did what we said we would do. I know how important it is to shareholders that we
continue delivering on our commitments.
2014 was a turbulent year – for BP and the industry. Oil prices fell dramatically and
returned to their familiar pattern of volatility, after several exceptional years in which they
remained above $100 per barrel. I expect these lower and more volatile prices to continue
through 2015 and likely longer. We are now resetting the business to deliver value in this
new context, scaling back capital spending and reducing costs, while always maintaining
our primary focus on safety.
Our efforts over the past three years have helped prepare us to face the new oil price
challenge with resilience. We have reshaped and strengthened our portfolio through a
divestment programme, reduced our costs to reflect a smaller footprint and articulated a
strategy based on clear priorities, a quality portfolio and distinctive capabilities.
Clear priorities
Safe and reliable operations will always be our first priority. While we have made real
progress in the past three years, sadly there were three workforce fatalities in 2014, in
accidents at a German refinery, a UK North Sea platform and an Indonesian
petrochemicals plant. Our thoughts are with the families and friends of those who died and
we will implement the lessons from these tragic events.
Since 2011 we have reduced the number of tier 1 and tier 2 process safety events – the
most serious incidents, leaks, spills and other releases. After making very good progress in
2013, we saw a higher number of such incidents in 2014. We are renewing our efforts to
ensure conformance with our operating management system, allied to the right personal
behaviours, taking great care in everything we do.
We clearly demonstrated capital discipline through 2014, restricting spending to around
$23 billion, relative to guidance of $24-25 billion. We also saw good project execution as
we met our plans to bring onstream seven start-up projects.
Quality portfolio
We continue to actively manage our portfolio, focusing on assets which play to our
strengths and divesting assets that no longer fit our strategy. In both our Upstream and
Downstream businesses, we are taking a rigorous approach to capital allocation and
concentrating on efficiency and competitiveness in our activities. Making the right
investment choices is of the highest priority.
94.9%
2014 refining availability.
90%
Upstream BP-operated plant efficiency .
Our efforts over the past three
years have helped prepare us
to face the new oil price
challenge with resilience.
Bob Dudley
BP Annual Report and Form 20-F 20148