BP 2010 Annual Report Download - page 43


Businessreview
Business review
Our performance
Key statistics
 $million
2010 2009 2008
Salesandotheroperatingrevenuesa66,266 57,626 86,170
Replacementcostprotbefore
 interestandtaxb30,886 24,800 38,308
Capitalexpenditureandacquisitions 17,753 14,896 22,227
 $perbarrel
AverageBPcrudeoilrealizationsc77.54 59.86 95.43
AverageBPNGLrealizationsc42.78 29.60 52.30
AverageBPliquidsrealizationscd73.41 56.26 90.20
AverageWestTexasIntermediate
 oilpricee79.45 61.92 100.06
AverageBrentoilpricee79.50 61.67 97.26
 $perthousandcubicfeet
AverageBPnaturalgasrealizationsc3.97 3.25 6.00
AverageBPUSnaturalgasrealizationsc3.88 3.07 6.77
 $permillionBritishthermalunits
AverageHenryHubgaspricef4.39 3.99 9.04
 pencepertherm
AverageUKNationalBalancingPoint
 gaspricee42.45 30.85 58.12
 thousandbarrelsofoilequivalentperday
Totalproductionforsubsidiariesgh2,492 2,684 2,517
Totalproductionforequity-accounted
 entitiesgh1,330 1,314 1,321
Totalofsubsidiariesand
 equity-accountedentitiesgh3,822 3,998 3,838
 millionbarrelsofoilequivalent
Netprovedreservesforsubsidiaries 12,077 12,621 12,562
Netprovedreservesfor
 equity-accountedentities 5,994 5,671 5,585
Totalofsubsidiariesand
 equity-accountedentities 18,071 18,292 18,147
aIncludessalesbetweenbusinesses.
bIncludesprotafterinterestandtaxofequity-accountedentities.
cRealizationsarebasedonsalesofconsolidatedsubsidiariesonly,whichexcludesequity-accounted
entities.
dCr
udeoilandnaturalgasliquids.
eAlltradeddaysaverage.
fHenryHubFirstofMonthIndex.
gNetofroyalties.
hExpressedinthousandsofbarrelsofoilequivalentperday(mboe/d).Naturalgasisconvertedtooil
equivalentat5.8billioncubicfeet=1millionbarrels.
2010performance
Safety and operational risk
InExplorationandProduction,safety,bothprocessandpersonal,remains
ourhighestpriority.Asdescribedabove,theorganizationalandgovernance
changesinExplorationandProductionandS&ORhavebeendesignedto
ensureweachieveourobjectivesinthisarea.Inaddition,BP’soperating
managementsystem(OMS)providesuswithasystematicframeworkfor
safe,reliableandefcientoperations.Bytheendof2010allofour
explorationandproductionoperationshadcompletedtheirtransition
toOMS.
Safetyperformanceismonitoredbyasuiteofinputandoutput
metricswhichfocusonpersonalandprocesssafetyincludingoperational
integrity,healthandallaspectsofcompliance.
In2010,excludingtheimpactoftheGulfofMexicooilspill,further
informationonwhichcanbefoundonpage34,ExplorationandProduction
hadoneworkforcefatality.
Therecordableinjuryfrequency(RIF),whichmeasuresthenumberof
recordableinjuriestotheBPworkforceper200,000hoursworked,was
0.32.Thisislowerthan2009whenitwas0.39and2008whenitwas0.43.
Ourdayawayfromworkcasefrequency(DAFWCF)in2010was0.063.
Thisishigherthan2009whenitwas0.038and2008whenitwas0.057.
Thisincreaseislargelyduetoday-away-from-workcasesresultingfromthe
GulfofMexicoincidentandanaviationincidentinCanada.
In2010,thenumberofreportedLossofPrimaryContainment
(LOPC)incidentsinExplorationandProductionwas194,downfrom321in
2009.ExcludingtheimpactoftheGulfofMexicoincident,thenumberof
reportedoilspillsequaltoorlargerthan1barrelduring2010was116,up
from112in2009.Thisistherstyearsince1999thatthenumberof
reportedspillshasincreased.
Financial and operating performance
Wecontinuallyseekaccesstoresourcesandin2010,inadditiontonew
accessresultingfromacquisitionsasdetailedonpage43,thisincluded
Azerbaijan,whereBPandtheStateOilCompanyoftheRepublicof
Azerbaijan(SOCAR)signedanew30-yearPSAonjointexplorationand
developmentoftheShafag-AsimanstructureintheCaspian;China,where
wefarmedintoBlock42/05inthedeepwaterSouthChinaSea;theGulfof
Mexico,wherewewereawarded18blocksthroughtheOuterContinental
ShelfLeaseSale213,elevenofwhichhavebeenexecutedandsevenhave
yettobeexecuted;Indonesia,wherewewereawardedtheNorthArafura
PSConshorePapua;Jordan,whereon3January2010,wereceived
approvalfromtheGovernmentofJordantojointhestate-ownedNational
PetroleumCompany(NPC)toexploittheonshoreRishaconcessioninthe
northeastofthecountry;onshoreUS,withfurtherpropertiesintheEagle
Fordshalegasplay;andtheUK,wherewewereawardedsevenblocksin
the26thoffshorelicensinground.
Sincethestartof2011,wehavebeenawardedfourblocksinthe
CedunaBasin,offshoreSouthAustraliaand,subjecttopartnerand
governmentapproval,wehavesignedanewagreementwiththeChina
NationalOffshoreOilCorporation(CNOOC)toexploreBlock43/11inthe
SouthChinaSea.Wehavealsoannouncedastrategicglobalalliancewith
Rosneft,whichincludesanagreementtoexploreanddevelopthreelicence
blocksinRussia’sSouthKaraSea.SeeLegalproceedingsonpage133for
informationonaninteriminjunction,grantedbytheEnglishHighCourton
1February2011andeffectiveuntil11March2011,restrainingBPfrom
takinganyfurtherstepsinrelationtotheRosnefttransactionspendingthe
outcomeofarbitrationproceedings.
On21February2011,RelianceIndustriesLimitedandBP
announcedtheirintentiontoformanupstreamjointventureinwhichBP
willtakea30%stakein23oilandgasproduction-sharingcontractsthat
RelianceoperatesinIndia,anda50:50jointventureforthesourcingand
marketingofgasinIndia.Seepage43forfurtherinformation.
InNovember2010,weannouncedtheHodoagasdiscoveryinthe
deepwaterWestNileDeltaareaofEgypt.
Threemajorprojectscameonstreamin2010.Production
commencedattheInSalahGascompressionprojectinAlgeria,theGreat
WhiteeldintheGulfofMexico,andtheNoeleldinCanada.In2010we
tooknalinvestmentdecisionson15projects.
Productionwaslowerthanlastyear,largelyduetotheimpactof
eventsintheGulfofMexico.Afteradjustingfortheeffectofentitlement
changesinourPSAsandtheeffectofacquisitionsanddisposals,
underlyingproductionwas2%lowerthan2009.InDecember2010,we
sustainedproductionfromtheRumailaeldinIraqat10%abovetheinitial
productionratein2009toachievetheImprovedProductionTarget,whichis
therstsignicantmilestoneintherehabilitationofRumaila.In2010,
full-yearproductiongrowthinTNK-BPwas2.5%.
Salesandotheroperatingrevenuesfor2010were$66billion,
comparedwith$58billionin2009and$86billionin2008.Theincreasein
2010primarilyreectedhigheroilandgasrealizations,partlyoffsetby
lowerproduction.Thedecreasein2009primarilyreectedloweroilandgas
realizations.
BPAnnualReportandForm20-F2010 41