BP 2011 Annual Report Download - page 19

Business review: Group overview
BP Annual Report and Form 20-F 2011 17
In Refining and Marketing, our world-class fuels, lubricants and petrochemicals
businesses are shifting the balance of their activity towards higher growth
markets, including China and India. We are moving forward with our plans to sell
around half of our refining capacity in the US, and we have made good progress
on the modernization of the Whiting refinery. Looking ahead, we expect our
downstream operations to be a material contributor to the cash flow we anticipate
over the next few years.
These strengths are supported by our long-standing track record in
developing and applying leading technology, and the deep and enduring
relationships we form. We were disappointed that our exploration plans with
Rosneft did not progress, but we remain committed to our TNK-BP investment
in Russia, which continues to be successful.
A well-balanced business
As the BP Energy Outlook 2030 shows, the world is now in a long wavelength
transition to a lower-carbon energy mix. For BP, that means helping to meet
current demand through the supply of oil and gas – including unconventional
resources – while developing a number of the lower-carbon options needed at
scale tomorrow.
During 2011, we invested a further $1.6 billion in our Alternative Energy
business, which takes total investment since 2005 to $6.6 billion. We have a
growing biofuels business in Brazil and we added 401MWa of wind generation
capacity during the year, with interests in more than 1,000 wind turbines now
turning across the US. In contrast, solar has evolved into a low-margin commodity
market, and in 2011 we began winding down our remaining solar operations as
we prepare to exit the business.
Looking ahead
BP is meeting its commitments and moving forward with increasing momentum.
2012 will be a year of milestone delivery, with financial momentum building in
2013 and 2014. In 2012, you can expect high-margin production coming back on
stream, major project start-ups and new exploration wells, further progress on
our divestment programme, continued improvement in downstream financial
performance and completion of payments into the Deepwater Horizon Oil Spill
Trust fund.
The company has a strong leadership team and non-executive directors
who provide rigorous oversight – challenging and supporting executives as
circumstances dictate. I want to thank BP’s employees for their resilience. They
were again tested hard this year. The character of BP’s people was evident
wherever we operate, not least in Egypt and Libya, where our teams evacuated
colleagues and their families safely during the upheavals in the region.
I thank investors for their continued patience through a tough time. One by
one, we are addressing the uncertainties facing our company. The days ahead
may bring further challenges, but we are in a much stronger position than this
time last year. There is a great deal more to do, but we are building a stronger,
safer BP that can play an important role in the world for many years to come.
Bob Dudley
Group Chief Executive
6 March 2012
a On a gross joint-venture basis (which includes 100% of the capacity of equity-accounted entities
where BP has partial ownership). Including BP’s share of joint ventures on a net basis, the capacity
added was 274MW.