BP 2010 Annual Report Download - page 9


Businessreview
Business review
Duringtheyearwefurtherreinforcedournancialposition.Havingtakena
totalpre-taxchargeof$40.9billioninrelationtotheaccidentandspill,we
announcedourintentiontosellupto$30billionofassets.Wehavealready
securedalmost$22billion.Weintendtoreducethenetdebtratiotowithin
therangeof10-20%,comparedwithourpreviouslytargetedrangeof
20-30%.
WehavemadesignicantchangestotheboardandIwantto
acknowledgeTonyHaywardandAndyInglis,whohaveleftthecompany.
Tonystooddownasgroupchiefexecutiveon1October2010.Theboard
wassaddenedtolosesomeonewhoselong-termcontributiontoBPwas
sowidelyadmired.AndyInglisstooddownon31October2010.Andywas
astrongleaderofExplorationandProductionandasignicantcontributor
totheboard.
BPisfortunatetohaveanexceptionalsuccessortotheroleof
groupchiefexecutive.BobDudleyhasspenthisworkinglifeintheoil
industryandhasprovedhimselfarobust,successfulleaderinthetoughest
circumstances.Iamdelightedtobeworkingalongsideamanofsuch
substanceandexperience.
DouglasFlintwillbestandingdownattheannualgeneralmeeting
inApril2011,havingtakenupanewroleaschairmanofHSBCHoldings
plc.Douglashaschairedourauditcommitteeforthepastyear.DeAnne
Juliuswillbestandingdownatthesametime,havingjoinedtheboardin
2001.DeAnnehaschairedtheremunerationcommitteesince2005andis
succeededinthatrolebyAntonyBurgmans.BothDeAnneandDouglas
havebeenimmenselyvaluableboardmembers.Wethankthemandwish
thembothwell.
Boardsmustevolveiftheyaretoengageeffectivelywithnew
issuesandopportunities.WehaveactedtostrengthentheboardofBPto
ensurewehavetherightmixofskills,knowledgeandexperienceaswe
worktoachievesustainablesuccessinafast-changingworld.Inearly2010
weappointedPaulAndersonandIanDavisasnon-executivedirectors.We
havesincemadethreefurthernon-executiveappointments.AdmiralFrank
L‘Skip’BowmanisformerheadoftheUSNuclearNavyandwasa
memberoftheBakerPanelthatreviewedsafetyatBP’sUSreneries.We
willbenetfromhisexceptionalexperienceonsafetymattersandhis
knowledgeofBP.BrendanNelsonbringsvastnancialandauditing
experiencefromKPMG,wherelatterlyhewasvicechairman.Heis
eminentlywellqualiedtotakeoverthechairoftheauditcommittee
followingtheannualgeneralmeeting.PhuthumaNhlekowillbringdeep
experienceofemergingmarkets,gainedwhilehewasgrouppresidentand
chiefexecutiveofcerofmultinationaltelephonycompanyMTNGroup.
Clearly,afteraverytroubledanddemanding12months,BPisa
changedcompany.Asaboardwehavemuchtodo,andweareworking
withtheexecutiveteamtoensuresuccessfulimplementationofa
refocusedstrategybuiltonthepillarsofsafety,trustandvaluecreation.
Foremostistheneedtoensuretherightchecksandbalancesareinplace
acrossthecompany.Thefullboardwillcontinuetomaintaincloseoversight
ofmattersrelatedtosafety.Andwewillhaveevengreaterengagementon
thestrategicimplicationsofrisk.
Lookingahead,webelievethatagrowingpopulationandrisinglevelsof
prosperitywillcreatestrongdemandforenergy.BP’sabilitytoproduce
oilandgasfromharshenvironmentsmeanswehaveavitalcontribution
tomakehere.Wewillalsocontinuetorespondtoclimatechange,and
totheprospectoffossilfuelsbecomingasmallerpartoftheenergy
mix.Forthesereasons,BPmustcontinuetobealeaderinhigh-quality
hydrocarbonstoday,whiledevelopingtheintelligentoptionswewillall
relyontomorrow.Lower-carbonresourcesremaincentraltothis
long-termstrategy.
BPisabletohelpmeettheworld’sgrowingneedforenergy,
butwecanonlydothisifwehavethetrustofsociety.Toachievethis,we
mustensurethatsafetyandresponsibilityareattheheartofeverythingwe
do.Wemustshowthatwecanbetrustedtounderstandandmanageour
risks.Andwemustdemonstratethatwerespecttheenvironmentand
theneedsoflocalcommunitiesandsocietyasawhole.
ThemanystrengthsofBPareunitedinourremarkablepeople,who
showedin2010thattheycanrisetothesternestchallenge.Ithankthem
fortheirefforts.
Whilewefacesubstantialchallenges,shareholdersmustbeinno
doubt–BPhasthedeterminationandstrengthneededtorestoreits
reputationanddeliverlong-termshareholdervalue.Throughits
refocusedstrategy,thecompanyisworkingtobecomemoreagileand
morecompetitive,withstrongemphasisonrealizingvalueratherthan
buildingvolumeandscale.Wewillnotbeafraidtodevelopnewand
innovativeapproachesthatredenethemodelofaninternationaloil
company,asourrecentlyannouncedpartnershipswithRosneftand
Reliancedemonstrate.
Iwanttoendbythankingshareholdersfortheirsupport.Youhave
beensteadfastthroughoneofthemosttestingperiodsinBP’slong
history.Wehavelearnedmanylessonsaboutourselvesoverthepast
12months,andthesewillneverbeforgotten.Ibelievewewillemergea
stronger,wisercompanywithaveryimportantroletoplay,formany
yearstocome.
Carl-Henric Svanberg
Chairman
2March2011
More on board performance
bp.com/governance
BPAnnualReportandForm20-F2010 7