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Groupchief
executive’sletter
Dearfellowshareholder
Thetragiceventsof2010willforeverbewrittenin
thememoryofthiscompanyandthepeoplewho
workhere.Theexplosionandreonthe
DeepwaterHorizonrigshockedeveryonewithin
BP,andwefeelgreatsadnessthat11peopledied.
Wearedeeplysorryforthegrieffeltbytheir
familiesandfriends.Weknownothingcanrestore
thelossofthosemen.
Theaccidenton20April2010turnedintoan
unprecedentedoilspillwithdeepconsequences
forjobs,businesses,communities,the
environmentandourindustry.Fromthisgrewa
corporatecrisisthatthreatenedtheveryexistence
ofthecompany.Anditallstartedinapartofthe
worldthat’sveryclosetomyheart.Igrewupin
Mississippi,andspentsummerswithmyfamily
swimmingandshingintheGulf.Iknowthose
beachesandwaterswell.WhenIheardabout
theaccidentIcouldimmediatelypicturehowit
mightaffectthepeoplewholiveandworkalong
thatcoast.
Yet,justdaysbeforetheaccident,Ihadbeenreectingontheprogress
madebyBP.Thecompanyhadputsafeandreliableoperationsatthe
centreofeverything,andwehadturnedacorneronnancialperformance.
Thencametheunthinkable.Asubseablowoutindeepwaterwasseen
asavery,verylow-probabilityevent,byBPandtheentireindustry–
butithappened.
Followingtheaccident,asearch-and-rescueoperationwascarried
outbytherig’sowner,Transocean,togetherwithBPandtheUSCoast
Guard.Thiscontinuedforfourdaysandcovered5,000squaremiles.On
22April2010theDeepwaterHorizonsank,andamajoroilspillresponse
wasactivated.Atitspeakthisinvolvedthemobilizationofsome
48,000people,thedeploymentofaround2,500milesofboomandthe
co-ordinationofmorethan6,500vessels.Fieldoperationsbroughttogether
expertsfromkeyagencies,organizationsandBP.Thousandsofourpeople
ewinfromaroundtheworldandstayedandworkedforweeksand
months.Nearly500retireesfromBPAmericacalleduptosaytheywanted
tohelp.Thiswasanextraordinaryresponse.
Astheresponsedeveloped,theproblemsgrewincomplexityand
scale.Tacklingtheleakontheseabeddemandedgroundbreakingtechnical
advancesanddauntlessspirit.Wealsofoundourselvesinthemidstof
intensepoliticalandmediascrutiny.Wereceivedincrediblesupportand
facedtremendouscriticism,butourprioritiesremainedclear–provide
supporttothefamiliesandfriendsofthose11menwhodied,stopthe
leak,attackthespill,protecttheshore,supportallthepeopleandplaces
affected.Wealsocommittedtocarryoutanimmediateanddetailed
internalinvestigation.
Asaresponsibleparty,undertheOilPollutionAct,weknewwe
wouldfacewide-rangingclaimsandpotentialnes,butweresolvedtogo
beyondwhatthelawrequiredofus.Wemadeswiftpaymentstosupport
localeconomies,andgaveatotalof$138millionindirectstategrants
during2010,whichincludedbehaviouralhealthprogrammes.Wesetupthe
$20-billionDeepwaterHorizonOilSpillTrusttomeetindividual,business,
government,localandstateclaims,andnaturalresourcedamages.We
provided$500millionfortheGulfofMexicoResearchInitiative,whichis
fundingindependentresearchtoinvestigateimpactsonaffected
ecosystems.Andwecontributedtoa$100-millionfundtosupportrig
workershitbythedrillingmoratorium.
Tomeetournancialcommitments,weannouncedthesaleofup
to$30billioninassetsand,bytheendof2010,hadagreedto$22billion
ofdisposals.Wehavealsocutbackondiscretionarycapitalspendingand
securedadditionalcreditlines.Thesoundunderlyingperformanceacross
ourbusinesscontinuestogiveusasolidfoundation,andspeaksvolumes
fortheinnerstrengthsofBPandourpeople.
Aspartofourresponse,wetookthedecisiontocancelfurther
dividendsin2010.Whileweknowthatmanyshareholdersrelyontheir
regularpayments,wealsohadtoprotectthecompanyandsecureits
long-termfuture.TheboardofBPtookthisdecisionwithaheavyheart,
butIbelieveitwastherightthingtodointrulyexceptionalcircumstances.
Ourinvestigationreportwaspublishedon8September2010,
andfoundthatnosinglefactorcausedtheaccident.Thereportstated
thatdecisionsmadebymultiplecompaniesandworkteamscontributed
totheaccident,andthesearosefromacomplexandinterlinkedseries
ofmechanical,humanjudgement,engineeringdesign,operational
implementationandteaminterfacefailures.
Wehaveacceptedandareimplementingthereport’s
recommendations.Wearealsosharingwhatwehavelearnedwith
governmentsandothersinourindustry,andweareco-operating
withaseriesofotherinvestigations,inquiriesandhearings.
2010standsasaninexionpointforBPandourindustry,and
itisrightthatweshouldhelpleadthedevelopmentofbetterwaysto
operateindeepwater.Goodriskidenticationandmanagementisintegral
tobecomingsafer,andweareworkingwithgovernments,service
contractorsandindustrypeerstotakeriskmanagementandequipment
designtothenextlevel.WithinBP,wehaveintroducedmorelayersof
protectionandresilience,withournewsafetyandoperationalriskfunction
empoweredtointerveneinanyoperation.Toenhanceourspecialist
expertiseandriskmanagement,wehavere-organizedourupstream
businessintothreedivisions–Exploration,DevelopmentsandProduction.
Toencourageexcellenceinriskmanagementthroughouttheorganization,
10BPAnnualReportandForm20-F2010