BP 2006 Annual Report Download - page 15

variety of factors, including unexpected drilling conditions, pressure
or irregularities in geological formations, equipment failures or
accidents, adverse weather conditions and compliance with
governmental requirements.
Transportation
All modes of transportation of hydrocarbons contain inherent risks. A loss
of containment of hydrocarbons and other hazardous material could occur
during transportation by road, rail or sea. This is a significant risk due to
the potential impact of a release on the environment and people and given
the high volumes involved.
Operations — planning and performance management
Investment efficiency
Our organic growth is dependent on creating a portfolio of quality options
and investing in the best options. Ineffective investment selection could
lead to loss of value and higher capital expenditure.
Major project delivery
Successful execution of our group plan depends critically on implementing
the activities to deliver the major projects over the plan period. Poor
delivery of any major project that underpins production growth and/or a
major programme designed to enhance shareholder value could adversely
affect our financial performance.
Reserves replacement
Successful execution of our group plan (see page 14) depends critically on
sustaining long-term reserves replacement. If upstream resources are not
progressed to proved reserves in a timely and efficient manner, we will
be unable to sustain long-term replacement of reserves.
Operations — enterprise systems, security and continuity
Digital infrastructure
The reliability and security of our digital infrastructure are critical to
maintaining our business applications availability. A breach of our digital
security could cause serious damage to business operations and, in some
circumstances, could result in injury to people, damage to assets, harm to
the environment and breaches of regulations.
Security
Security threats require continual oversight and control. Acts of terrorism
that threaten our plants and offices, pipelines, transportation or computer
systems would severely disrupt business and operations and could cause
harm to people.
Business continuity and disaster recovery
Contingency plans are required to continue or recover operations
following a disruption or incident. Inability to restore or replace critical
capacity to an agreed level within an agreed timeframe would prolong
the impact of any disruption and could severely affect business and
operations.
Crisis management
Crisis management plans and capability are essential to deal with
emergencies at every level of our operations. If we do not respond or are
perceived not to respond in an appropriate manner to either an external or
internal crisis, our business and operations could be severely disrupted.
Operations — people management
People and capability
Employee training, development and successful recruitment of new staff
are key to implementation of our plans. Inability to develop the human
capacity and capability across the organization could jeopardize
performance delivery.
Forward-looking statements
In order to utilize the ‘Safe Harbor’ provisions of the United States Private
Securities Litigation Reform Act of 1995, BP is providing the following
cautionary statement. This document contains certain forward-looking
statements with respect to the financial condition, results of operations
and businesses of BP and certain of the plans and objectives of BP with
respect to these items. These statements may generally, but not always,
be identified by the use of words such as ‘will’, ‘expects’, ‘is expected to’,
‘should’, ‘may’, ‘objective’, ‘is likely to’, ‘intends’, ‘believes’, ‘plans’, ‘we
see’ or similar expressions. In particular, among other statements, (i)
certain statements in Performance review (pages 10-60) with regard to
management aims and objectives, future capital expenditure, future
hydrocarbon production volume, date or period(s) in which production is
scheduledorexpectedtocomeonstreamoraprojectoractionis
scheduled or expected to be completed, capacity of planned plants or
facilities, the timing of divestments and impact of health, safety and
environmental regulations; (ii) the statements in Performance review
(pages 14-47) with regard to planned expansion, investment or other
projects and future regulatory actions; and (iii) the statements in
Performance review (pages 47-60) with regard to the plans of the group,
cash flows, opportunities for material acquisitions, the cost of future
remediation programmes, liquidity and costs for providing pension and
other post-retirement benefits; and including under ‘Liquidity and Capital
Resources’ with regard to future cash flows, future levels of capital
expenditure and divestments, working capital, future production volumes,
the renewal of borrowing facilities, shareholder distributions and share
buybacks and expected payments under contractual and commercial
commitments; are all forward-looking in nature.
By their nature, forward-looking statements involve risk and uncertainty
because they relate to events and depend on circumstances that will or
may occur in the future and are outside the control of BP. Actual results
may differ materially from those expressed in such statements,
depending on a variety of factors, including the specific factors identified
in the discussions accompanying such forward-looking statements; the
timing of bringing new fields on stream; future levels of industry product
supply, demand and pricing; operational problems; general economic
conditions; political stability and economic growth in relevant areas of
the world; changes in laws and governmental regulations; exchange rate
fluctuations; development and use of new technology; the success or
otherwise of partnering; the actions of competitors; natural disasters and
adverse weather conditions; changes in public expectations and other
changes to business conditions; wars and acts of terrorism or sabotage;
and other factors discussed elsewhere in this report including under ‘Risk
factors’ above. In addition to factors set forth elsewhere in this report,
those set out above are important factors, although not exhaustive, that
may cause actual results and developments to differ materially from those
expressed or implied by these forward-looking statements.
Statements regarding competitive position
Statements referring to BP’s competitive position are based on the
company’s belief and in some cases rely on a range of sources, including
investment analysts’ reports, independent market studies and BP’s
internal assessments of market share based on publicly available
information about the financial results and performance of
market participants.
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