BP 2014 Annual Report Download - page 13

We grew our exploration position during the year, with new access in five areas and
hydrocarbon discoveries in the Gulf of Mexico, Brazil, the North Sea, Egypt and Angola.
We began operating our onshore oil and gas operations in the ‘Lower 48’ states of the US
as a separate business in January 2015. In the Downstream, we improved performance
from fuels marketing, increased our capacity to refine heavy crude and shale oil in the US,
maintained the focus on premium brands and growth markets in lubricants and reviewed
the petrochemicals business to increase its earnings potential.
Having completed our $38-billion divestment programme ahead of schedule, we
committed to make a further $10 billion of divestments by the end of 2015. By the end of
2014 we had agreed transactions amounting to $4.7 billion.
Distinctive capabilities
BP’s distinctive capabilities of advanced technology, proven expertise and strong
relationships underpin our progress. We have invested over the years to be a specialist in
several key areas of technology. For example, in 2014 we started using robots to test
enhanced oil recovery options, helping us reduce time to production.
The expertise of our people is central to our progress so developing our employees in
critical areas is an ongoing activity. For example, we run specialist academies dedicated to
global wells expertise and safety and operational risk, as well as other areas.
Strong relationships remain vital – with communities, governments, partners, suppliers,
staff and shareholders. The rapid progress made on the Southern Corridor project, which
will pipe natural gas from the Caspian Sea to markets as far away as Italy, is just one
example. With our partners, we have already awarded more than $9 billion of contracts to
make, transport and install facilities.
A challenging environment
In 2015 we entered a very different landscape from that in which we began last year. The
lower oil price presents formidable challenges for the industry. In these volatile times, BP
continues to drive capital discipline by constraining the total level of capital spend in any
one year, taking account of the opportunities available and the flexibility of our balance
sheet.
Meanwhile, we continue to manage issues specific to BP. The legal proceedings in the US
associated with the Deepwater Horizon accident and oil spill continue. In the first trial
phase the judge issued a finding of gross negligence and wilful misconduct. We strongly
disagree with these findings and have appealed. In the second phase the court found no
gross negligence in our source control efforts and ruled that 3.19 million barrels of oil were
discharged into the Gulf of Mexico. We have also appealed this ruling. The penalty phase
trial finished in February, with the ruling to come at a later date. In all of the proceedings,
we are seeking fair and just outcomes while protecting the best interests of our
shareholders.
Our investment in Rosneft, funded from the proceeds of our sale of TNK-BP in 2013,
continues to attract attention. Our approach is to comply with all relevant sanctions and
otherwise to maintain our distinctive, long-term investment and relationship with Rosneft
in a country that holds some of the world’s largest oil and gas resources. There is strong
interdependence between Russia and its trading partners, and I believe that over time
such commercial links tend to ease tensions rather than exacerbate them.
The BP of 2015 is a robust and resilient business, a global team that has been through
some of the most difficult times an organization can face and emerged stronger, safer and
better than before.
Bob Dudley
Group chief executive
3 March 2015
Delivery of our 10-point plan
For details of our performance against the
plan see page 21.
Our strategy
For more on our strategic priorities and
longer-term objectives see page 13.
Our key performance indicators
Find out how we measure our
performance on page 18.
Top: Bob Dudley at the World Petroleum
Congress in Moscow.
Bottom: Bob Dudley congratulates winners at the
Helios awards – where teams from across the
world are recognized for their contributions to
building a safer, stronger BP in line with our
values.
★ Defined on page 252. BP Annual Report and Form 20-F 2014 9
Strategic report