BP 2012 Annual Report Download - page 10

Dear fellow shareholder
In 2012 the board had three priorities. First, to address uncertainty from ongoing litigation in
the US and our partnership in Russia. Second, to reinforce the strategic direction of the
group. Third, to accelerate the company’s momentum and build confidence. All of these
were pursued in the context of the board’s active monitoring of safety and risk management.
Substantial progress has been made in meeting these priorities. This progress gave the
board confidence to raise the quarterly dividend by 14% in February 2012 and by 12.5% in
October. The increased dividend represents an important milestone on the road to
improved shareholder value. We are maintaining a progressive dividend policy, increasing
returns to you, in line with financial performance and outlook.
The pursuit of energy will always involve risk, so it is essential that safety remains front of
mind. From safe and reliable operations comes trust, and we need that trust if BP is to
create value for you and to help meet the world’s energy needs.
Looking ahead, your board sees strong prospects for BP in a world that requires a growing
supply of energy. We are aware that we still have some way to go. We continue to face a
number of uncertainties in the US, for example. The board thanks you for your continued
patience and support as we work to address these issues.
In working to resolve uncertainty, two matters demanded the close attention of
your board.
In the US, the company has faced legal proceedings related to the Deepwater Horizon
accident. Our settlements with the US government, the Securities and Exchange
Commission and others were each important steps forward in reducing uncertainty.
In Russia, the agreed sale of our 50% shareholding in TNK-BP to Rosneft, and the
settlement with our partners, have brought clarity. The disposal agreement will provide us
with an increased stake in Rosneft, such that on completion, BP will have a 19.75% share
of the biggest publicly traded oil company in the world in terms of oil production and
reserves. In due course BP expects to have two seats on its nine-person board. BP has
worked with Rosneft for some 15 years. Our joint ambition is that BP’s people, processes
and technologies will help to significantly enhance Rosneft’s value over time, as they did at
TNK-BP.
During the year the board supported Bob Dudley, our group chief executive, on the
implementation of the 10-point plan and the further implementation of the functional
organization. We worked with him to develop the group strategy beyond 2014. Bob, the
executive team and all our employees have made a huge contribution, working to reach
our milestones and secure a promising future for the company during a tough period.
Bob has shown steady and determined leadership through this time. I thank him and
everyone at BP for their hard work.
The qualities of BP’s employees were once again demonstrated in January 2013, following
the violent attack at In Amenas in Algeria. This shocking event deeply affected us all, but
across the company people responded with great resilience. We will always remember
those who lost their lives in this terrible incident.
Chairman’s letter
Our plans, priorities and
directions are clear. I see
great opportunities ahead.
Carl-Henric Svanberg
10-year dividend history
UK (pence per ordinary share)
0
20
10
30
40
03 04 05 06 07 08 09 10 11 12
15.25
19.15
21.10
21.00
29.39
36.42
8.68
17.40
20.85
15.66
US (cents per ADS)
1 ADS represents six 25 cent ordinary shares.
0
100
200
300
400
03 04 05 06 07 08 09 10 11 12
166
209
230
254
330
336
84
168
198
153
Board performance
For information about the board and its
committees see pages 101-126.
Business review: Group overview
BP Annual Report and Form 20-F 2012
8