BP 2009 Annual Report Download - page 39

BP Annual Report and Accounts 2009
Business review
Business review
Business review
a
b
In 2009, despite the impact on our overall results of the weak refining
environment, our focus on operations delivered significant performance
improvements, both financial and operational. Solomon availability for the
year was around five percentage points higher than in 2008. Average
throughputs were up by over 130,000b/d compared with 2008, an
increase of more than 6%. In addition, 2009 has seen further
improvements at our Texas City refinery. Production has ramped up
steadily during the year and availability has increased each quarter. During
April 2009, the site’s Solomon availability exceeded 90% for the first time
in four years.
Our financial performance also benefited from lower non-
feedstock costs. In 2009, our total costs were over 15%alower than in
2008. In addition we reduced our headcount, excluding retail store staff,
by over 2,600 (see Financial statements – Note 39 on page 174).
aBased on Refining and Marketing’s share of production and manufacturing expenses plus
distribution and administration expenses.
Key statistics
$ million
2009 2008 2007
Sales and other operating revenuesa213,050 320,039 250,221
Replacement cost profit before
interest and taxb743 4,176 2,621
Total assets 82,224 75,329 95,311
Capital expenditure and acquisitions 4,114 6,634 5,495
thousand barrels per day
Total refinery throughputs 2,287 2,155 2,127
thousand tonnes
Total chemicals productionc12,391 12,518 14,028
$ per barrel
Global indicator refining margind4.00 6.50 9.94
Refining availabilitye93.6% 88.8% 82.9%
aIncludes sales between businesses.
bIncludes profit after interest and tax of equity-accounted entities.
cA minor amendment has been made to comparative periods.
dThe global indicator refining margin (GIM) is the average of regional industry indicator margins
weighted for BP’s crude refining capacity in each region. Each regional indicator margin is based
on a single representative crude with product yields characteristic of the typical level of upgrading
complexity. The indicator margin may not be representative of the margins achieved by BP in any
period because of BP’s particular refining configurations and crude and product slate.
eRefining availability represents Solomon Associates’ operational availability, which is defined as the
percentage of the year that a unit is available for processing after subtracting the annualized time
lost due to turnaround activity and all planned mechanical, process and regulatory maintenance
downtime.
Sales and other operating revenues are analysed in more detail below.
$ million
2009 2008 2007
Sale of crude oil through spot and
term contracts 35,625 54,901 43,004
Marketing, spot and term sales
of refined products 166,088 248,561 194,979
Other sales and operating revenues 11,337 16,577 12,238
213,050 320,039 250,221
Oil sales volumes
thousand barrels per day
Refined products 2009 2008 2007
US 1,426 1,460 1,533
Europe 1,504 1,566 1,633
Rest of World 630 685 640
Total marketing salesa3,560 3,711 3,806
Trading/supply salesb2,327 1,987 1,818
Total refined product sales 5,887 5,698 5,624
Crude oil 1,824 1,689 1,885
Total oil sales 7,711 7,387 7,509
Marketing sales are sales to service stations, end-consumers, bulk buyers and jobbers (i.e. third
parties who own networks of a number of service stations and small resellers).
Trading/supply sales are sales to large unbranded resellers and other oil companies.
The following table sets out marketing sales by major product group.
thousand barrels per day
Marketing sales by refined product 2009 2008 2007
Aviation fuel 495 501 490
Gasolines 1,444 1,500 1,572
Middle distillates 1,012 1,055 1,119
Fuel oil 418 460 429
Other products 191 195 196
Total marketing sales 3,560 3,711 3,806
Marketing volumes were 3,560mb/d, slightly lower than last year,
reflecting the impact of slowing global economies on demand for fuel
and the volume effects of our business simplification.
Outlook
For 2010, although demand has stabilized, the overall economic
environment is expected to continue to be very challenging with
continuing pressure on the demand for our products and on margins.
In response, our priorities in 2010 remain consistent with those
in 2009 and we intend to build on the momentum we have established
around improving financial performance and operations. We will continue
to focus on delivering safe, reliable and compliant operations, improving
the performance of our integrated FVCs, in particular in the US, and
driving further cost efficiencies across all our businesses. We intend
to maintain investment at 2009 levels, focused on key safety and
operational integrity priorities, maintaining our quality manufacturing
and marketing portfolio, strengthening our US Mid-West FVC business
through the Whiting refinery modernization project and continuing
to grow our advantaged petrochemicals business in China.
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