BP 2011 Annual Report Download - page 7

BP Annual Report and Form 20-F 2011 5
This document constitutes the Annual Report and Accounts in accordance
with UK requirements and the Annual Report on Form 20-F in accordance
with the US Securities Exchange Act of 1934, for BP p.l.c. for the year ended
31 December 2011. A cross reference to Form 20-F requirements is on
page 2.
This document contains the Directors’ Report, including the
Business Review and Management Report, on pages 7-138 and 153-172,
and 174. The Directors’ Remuneration Report is on pages 139-151. The
consolidated financial statements of the group are on pages 173-281 and
the corresponding reports of the auditor are on pages 175-177. The parent
company financial statements of BP p.l.c. and corresponding auditor’s report
are on pages PC1-PC14 and page PC1 respectively.
The statement of directors’ responsibilities, the independent
auditor’s report on the annual report and accounts to the members of
BP p.l.c. and the parent company financial statements of BP p.l.c. and
corresponding auditor’s report do not form part of BP’s Annual Report on
Form 20-F as filed with the SEC.
BP Annual Report and Form 20-F 2011 and BP Summary Review
2011 may be downloaded from bp.com/annualreport. No material on the BP
website, other than the items identified as BP Annual Report and Form 20-F
2011 or BP Summary Review 2011, forms any part of those documents.
BP p.l.c. is the parent company of the BP group of companies.
Unless otherwise stated, the text does not distinguish between the activities
and operations of the parent company and those of its subsidiaries.
The term ‘shareholder’ in this report means, unless the context
otherwise requires, investors in the equity capital of BP p.l.c., both direct
and indirect. As BP shares, in the form of ADSs, are listed on the New York
Stock Exchange (NYSE), an Annual Report on Form 20-F is filed with the US
Securities and Exchange Commission (SEC).
Cautionary statement
In order to utilize the ‘Safe Harbor’ provisions of the United States Private
Securities Litigation Reform Act of 1995 (the “PSLRA”), BP is providing the
following cautionary statement. This document contains certain forward
looking statements within the meaning of the PSLRA with respect to the
financial condition, results of operations and businesses of BP and certain
of the plans and objectives of BP with respect to these items. These
statements may generally, but not always, be identified by the use of words
such as ‘will’, ‘expects’, ‘is expected to’, ‘aims’, ‘should’, ‘may’, ‘objective’,
‘is likely to’, ‘intends’, ‘believes’, ‘anticipates’, ‘plans’, ‘we see’ or similar
expressions. In particular, among other statements, (i) certain statements in
the Chairman’s letter (pages 8-11), the Group chief executive’s letter (pages
14-17) and the Business review (pages 18-111), including but not limited
to statements under the headings ‘Our Strategy’, ‘Outlook’ and ‘Looking
Ahead’, with regard to strategy and strategic priorities, plans to deliver
shareholder value, expectations regarding the ‘10-point plan’, expectations
regarding future dividend payments, BP’s outlook on global energy trends to
2030 and beyond, the intention to make $38 billion of disposals, anticipated
increase in operating cash flow and margins, future capital expenditure,
expected level of investments, the anticipated timing for completion of and
final proceeds from the disposition of certain BP assets, future production
levels including expectations for an increase in high-margin production,
the timing and composition of future projects including expected start
up, completion, timing of production, level of production and margins,
expectations for drilling and rig activity in the Gulf of Mexico, the timing and
quantum of and timing for completion of contributions to and payments from
the $20-billion Trust fund, the expected terms of the proposed settlement
agreement with the Plaintiffs’ Steering Committee in MDL 2179 and the
expected timing of the fairness hearing and court approvals in respect
thereof, the expected amount, source and timing of payments under any
settlements, expectations regarding regulation and taxation of the energy
industry and energy users, future global refinery capacity and utilization,
the timing for completion of the Whiting refinery upgrade, plans regarding
the implementation of enhancements to BP’s risk management system,
expectations regarding the reduction of net debt and the net debt ratio,
the expected future level of depreciation, depletion and amortization, the
expected level of the refining marker margin, the completion of planned and
announced divestments, including the planned disposals of the Texas City
refinery and the southern part of the US West Coast FVC, dates or periods
in which production is scheduled or expected to come onstream or a project
or action is scheduled or expected to begin or be completed, and the level of
future turnaround activity; (ii) the statements in the Business review (pages
18-111), Corporate governance (pages 119-138), the Directors’ remuneration
report (pages 139-151) and Additional information for shareholders (pages
153-172) with regard to plans to continue the ongoing process of embedding
OMS, the timing for the implementation of the Bly report recommendations,
intentions to implement group-wide practices for oil spill preparedness
and response and crisis management, plans to spend $700 million on
certain refinery-related safety measures, plans to implement enhanced and
standardized technical practices across the refining business, the timing for
the completion of the Shoreline Clean-up, the timing of, cost of, source of
payment and provision for future remediation and restoration programmes
and environmental operating and capital expenditures, the anticipated future
level of time for conversion of proved undeveloped reserves to proved
reserves, expectations regarding Refining and Marketing’s intentions to
achieve $2 billion in performance improvement by the end of 2012, plans to
halve US refining capacity by the end of 2012, the timing for the completion
of construction at the Cherry Point refinery, anticipated investment in
Alternative Energy, expectations regarding greater regulation and increased
operating costs in the Gulf of Mexico in the future, and costs for providing
pension and other post-retirement benefits; (iii) the statements in the
Business review (pages 103-106) with regard to future dividend and optional
scrip dividend payments, future capital expenditures and capital expenditure
commitments, taxation, intentions to maintain a significant liquidity buffer,
future working capital and cash flows, gearing and the net debt ratio,
expected payments under contractual and commercial commitments and
purchase obligations, and including under ‘Liquidity and capital resources
– Trend information’, with regard to production excluding TNK-BP, the
expected level of turnarounds, the marketing environment in fuels, lubricants
and petrochemicals, underlying average quarterly charge from Other
businesses and corporate, and expectations regarding future disposals;
and (iv) certain statements in the Business review (page 84) and Additional
information for shareholders (pages 160-166) regarding the anticipated
timing of trial proceedings, court decisions and potential investigations and
civil or criminal actions by US state and/or local governments; are all forward
looking in nature.
By their nature, forward-looking statements involve risk and
uncertainty because they relate to events and depend on circumstances
that will or may occur in the future and are outside the control of BP. Actual
results may differ materially from those expressed in such statements,
depending on a variety of factors, including the specific factors identified in
the discussions accompanying such forward-looking statements; the timing
of bringing new fields onstream; the timing of certain disposals; future levels
of industry product supply, demand and pricing; OPEC quota restrictions;
PSA effects; operational problems; general economic conditions; political
stability and economic growth in relevant areas of the world; changes in
laws and governmental regulations; regulatory or legal actions including the
types of enforcement action pursued and the nature of remedies sought;
the actions of prosecutors, regulatory authorities and courts; the actions
of all parties to the Deepwater Horizon oil spill-related litigation at various
phases of the litigation; exchange rate fluctuations; development and use
of new technology; the success or otherwise of partnering; the actions
of competitors; the actions of contractors; natural disasters and adverse
weather conditions; changes in public expectations and other changes
to business conditions; wars and acts of terrorism or sabotage; and other
factors discussed elsewhere in this report including under ‘Risk factors’
(pages 59-63). In addition to factors set forth elsewhere in this report, those
set out above are important factors, although not exhaustive, that may cause
actual results and developments to differ materially from those expressed or
implied by these forward-looking statements.
Statements regarding competitive position
Statements referring to BP’s competitive position are based on the
company’s belief and, in some cases, rely on a range of sources, including
investment analysts’ reports, independent market studies and BP’s internal
assessments of market share based on publicly available information about
the financial results and performance of market participants.
Information about this report
Unless otherwise indicated, information in this document reflects 100% of the assets and
operations of the company and its subsidiaries that were consolidated at the date or for the
periods indicated, including minority interests. The company was incorporated in 1909 in England
and Wales and changed its name to BP p.l.c. in 2001. BP’s primary share listing is the London
Stock Exchange. Ordinary shares are also traded on the Frankfurt Stock Exchange in Germany
and, in the US, the company’s securities are traded on the New York Stock Exchange in the form
of ADSs (see page 167 for more details).
The registered office of BP p.l.c., and our worldwide headquarters, is:
1 St James’s Square,
London SW1Y 4PD, UK.
Tel [phone].
Registered in England and Wales No. 102498. Stock exchange symbol ‘BP’.
Our agent in the US is BP America Inc.,
501 Westlake Park Boulevard, Houston, Texas 77079.
Tel [phone].