BP 2010 Annual Report Download - page 17

Business review
Business review
Refi ning and Marketing
BP’s global presence in 2010a
• BP refi nery (wholly or partly owned)
•
Petrochemicals site (s) (wholly or
partly owned)
Proposed for disposal by the end of 2012
a
The green shaded areas indicate
the approximate coverage of BP’s
integrated fuels value chains.
and refineries, with defined intervention rights with respect to BP’s technical
and operational activities. The function reports directly to the group chief
executive and aims to provide assurance that BP’s operations are carried out
to common standards, and audits conformance to those standards.
The significant subsidiaries of the group at 31 December 2010 and
the group percentage of ordinary share capital (to the nearest whole
number) are set out in Financial statements – Note 46 on pages 220-221.
See Financial statements – Notes 25 and 26 on pages 183 and 184
respectively for information on significant jointly controlled entities and
associates of the group.
On 14 January 2011, BP and Rosneft Oil Company (Rosneft)
announced that they had agreed a strategic global alliance. BP and Rosneft
have agreed to seek to form a joint venture to explore and, if successful,
develop three licence blocks on the Russian Arctic continental shelf. BP and
Rosneft have entered into a related share swap agreement whereby, upon
completion, BP will receive approximately 9.5% of Rosneft’s shares in
exchange for BP issuing new ordinary shares to Rosneft with an aggregate
value of approximately $7.8 billion (as at close of trading in London on
14 January 2011), resulting in Rosneft holding 5% of BP’s ordinary voting
shares. See Legal proceedings on page 133 for information on an interim
injunction, granted by the English High Court on 1 February 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
that they intend 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, including the producing KG D6 block, and form a 50:50
joint venture for the sourcing and marketing of gas in India. BP will pay
Reliance Industries Limited an aggregate consideration of $7.2 billion,
and completion adjustments, for the interests to be acquired in the 23
production-sharing contracts. Future performance payments of up to $1.8
billion could be paid based on exploration success that results in
development of commercial discoveries. Reliance will continue to be the
operator under the production-sharing contracts. Completion of the
transactions is subject to Indian regulatory approvals and other customary
conditions.
Where we operate
BP’s worldwide headquarters is in London. The UK is a centre for trading,
legal, finance and other business functions as well as three of BP’s major
global research and technology groups.
We have well-established operations in Europe, the US, Canada,
Russia, South America, Australasia, Asia and parts of Africa. Currently,
around 68% of the group’s fixed assets are invested in Organization for
Economic Co-operation and Development (OECD) countries, with around
42% of our fixed assets located in the US and around 20% in Europe.
Our Exploration and Production segment included upstream and
midstream activities in 29 countries in 2010 including Angola, Azerbaijan,
Canada, Egypt, Norway, Russia, Trinidad & Tobago (Trinidad), the UK, the US
and other locations within Asia, Australasia, South America, North Africa
and the Middle East. Our Exploration and Production segment also includes
gas marketing and trading activities, primarily in Canada, Europe and the
US. In Russia, we have an important associate through our 50%
shareholding in TNK-BP, a major oil company with exploration assets,
refineries and other downstream infrastructure.
In Refining and Marketing, we market our products in more than 70
countries, with a particularly strong presence in Europe and North America,
and also manufacture and market our products across Australasia, in China
and other parts of Asia, Africa and Central and South America. In the US,
we own or have a share in five refineries and market fuel primarily under
the ARCO and BP brands. See Refining and Marketing (Our strategy) on
page 55 for further information on forthcoming portfolio changes in the US.
In Europe, we own or have a share in seven refineries and we market
extensively across the region, primarily under the Aral and BP fuel brands.
Our long-established supply and trading activity is responsible for delivering
value across the crude and oil products supply chain. Our petrochemicals
business maintains a manufacturing position globally, with an emphasis on
growth in Asia. Our lubricants business blends and markets lubricants
globally, primarily under the Castrol brand, and is a growing business
through market growth and the development of new products. We
continue to seek opportunities to broaden our activities in growth markets
such as China and India.
BP Annual Report and Form 20-F 2010 15