BP 2012 Annual Report Download - page 61

Business review: BP in more depth
Business review: BP in more depth
BP Annual Report and Form 20-F 2012
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Refining technologies
t We have made improvements in integrity management by deploying
Permasense® wireless corrosion sensors in selected areas of all
BP-operated refineries worldwide to monitor and enable better
decisions about corrosion management. We developed this technology
in collaboration with Imperial College, London.
Biofuels
t In addition to our biofuel production business in Brazil, we continue to
invest in and operate a world-class biofuels research facility in San
Diego, California, and a demonstration plant in Jennings, Louisiana, to
further develop our next-generation cellulosic biofuel technology and
license it for commercial use.
t BP’s joint venture with DuPont, Butamax Advanced Biofuels LLC, is
working to develop and market the advanced biofuel, biobutanol. A
technology demonstration plant has been constructed in Hull, UK to
accelerate the commercialization of biobutanol technology.
t BP is also working in partnership with DSM to advance the
development of a step-change technology for conversion of sugars into
renewable diesel.
Technology venturing
Our portfolio of technology venturing investments aims to put us at the
forefront of innovation. Our emerging business and ventures unit brings
together BP’s venturing and carbon markets expertise with carbon
capture and storage capability. Through this unit, we have invested about
$175 million in 33 investments, spanning the following areas:
t Bioenergy.
t Energy efficiency and storage.
t Carbon management.
t Renewable power.
t Emerging oil and gas technologies.
Our recent investments include:
t Oxane Materials, a company that is commercializing advanced
materials, such as ceramic proppants to improve production and reduce
the environmental impact of hydraulic fracturing.
t Skyonic, whose SkyMine® technology is a novel application of carbon
capture principles that can be retrofitted onto power plants and other
industrial sites that emit high volumes of CO2.
t Heliex Power, whose rotary screw expander technology can recover
waste heat from a variety of sources commonly found in industry and
use it to generate electricity.
t Liquid Light, a company developing new ways of converting CO2 into
high-performance chemicals and fuels.
More information on BP and technology can be found at bp.com/
technology.
Gulf of Mexico oil spill
We remain committed to meeting our
responsibilities to the US federal, state and local
governments and communities of the Gulf Coast
following the Deepwater Horizon accident.
Key events included:
t Continuing the clean-up of the Gulf shoreline under the direction of the
Federal On-Scene Coordinator and working to progress the clean-up of
shorelines to the point where removal actions are deemed complete.
t Supporting economic recovery by resolving legitimate claims and
providing support to two of the region’s most important industries –
tourism and seafood.
t Reaching settlement agreements to resolve the substantial majority
of legitimate private economic loss and medical claims – final
approval was granted by the court on 21 December 2012 for the
economic loss settlement agreement and on 11 January 2013 for the
medical settlement agreement.
t Completing the funding of the $20-billion Deepwater Horizon Oil Spill
Trust, which was established to pay individual and business claims,
final judgments in litigation and litigation settlements, state and local
response costs and claims, and natural resource damages and related
costs.
t Working in co-operation with state and federal trustees to collect data
needed to assess potential injuries to natural resources resulting from
the accident and to progress early restoration activities.
t Supporting independent research through the Gulf of Mexico
Research Initiative to better understand and mitigate the potential
impacts of future oil spills.
t Reaching an agreement with the US government in November 2012
(which was subsequently approved by the court in January 2013) to
pay $4 billion to resolve all federal criminal claims arising out of the
Gulf of Mexico incident. BP also reached a settlement with the SEC
to resolve the SEC’s Deepwater Horizon-related civil claims against
BP. Following these agreements, BP Exploration & Production Inc.
(BPXP) received notice from the US Environmental Protection Agency
(EPA) of a mandatory debarment from contracting with the US federal
government, as well as notice of a temporary suspension, in respect
of certain BP group companies. See Agreement with the US
government on page 61 for further information.
t On 25 February 2013, the first phase of a Trial of Liability, Limitation,
Exoneration and Fault Allocation commenced in the federal multi-
district litigation proceeding in New Orleans (MDL 2179). This phase
will address issues arising out of the conduct of various parties
allegedly relevant to the loss of well control at the Macondo well, the
ensuing fire and explosion on the Deepwater Horizon on 20 April
2010, the sinking of the vessel on 22 April 2010 and the initiation of
the release of oil from the Deepwater Horizon or the Macondo well
during those time periods, including whether BP or any other party
was grossly negligent. See page 164 for further information.
We have made significant progress in completing the response to the
accident and supporting economic and environmental recovery efforts in
affected areas.
Completing the response
BP, working under the direction of the US Coast Guard’s Federal
On-Scene Coordinator (FOSC), continued to complete the Deepwater
Horizon operational response activities in 2012.
Residual clean-up of the Gulf of Mexico shoreline
Throughout the year, BP continued to work to progress the clean-up of
shorelines to the point where removal actions are deemed complete as
established by the Shoreline Clean-up Completion Plan, which was
approved by the FOSC in November 2011. The plan established the
clean-up requirements for the range of shoreline types in the area of