BP 2006 Annual Report Download - page 8

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Group chief
executive’s
review
Dear Shareholder BP’s purpose is a progressive one. That
means we aim to generate returns for our investors by
providing the energy for basic human needs such as light,
heat and mobility and to do so in a safe, sustainable and
environmentally responsible way. Our financial results were
very strong in 2006. However, we fell short of our expectations
in certain areas, notably with two oil spills in Alaska and the
inability to start up the Thunder Horse platform as soon as
we had hoped.
We are headed in the right strategic direction and we should
not allow recent setbacks to obscure that. We have been
urgently addressing operational issues and matters related to
our safety performance. And I believe that, from the lessons
we have learned, the fresh investment and priorities we are
putting in place and the determined reaffirmation of our core
values, BP will emerge a stronger company.
Our staff across the world have responded to the tough
challenges of the year in an exemplary fashion. I am
immensely proud of their resilience and would like to thank
them. They are as determined as my successor, Tony Hayward,
and I are to restore BP’s performance and reputation.
The trading environment has been extremely volatile. The
oil price hit a high of $78 per barrel in August before falling back
to end the year at about $59 per barrel. The Henry Hub price for
gas fell significantly during the year to close at around $5.50 per
million British thermal units. Refining margins widened over the
summer before narrowing towards normal levels in the winter.
These movements are characteristic of an industry that is not
only cyclical but also affected by trends such as rising
concerns about energy security and climate change.