BP 2012 Annual Report Download - page 76

Business review: BP in more depth
BP Annual Report and Form 20-F 2012
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through front-line engagement and training. We have also focused on
improving the capability to reduce risk through OMS through the ‘learning
from incidents’ process. Drawn from incident investigations and the risk
process, targeted ‘high-value learning’ and ‘learning alert’ communications
show front-line teams what went wrong or could go wrong, and the
actions to take to prevent similar incidents from happening at their site.
Safety performance is monitored by a suite of input and output metrics,
which focus on personal and process safety. Regrettably, there were two
workforce fatalities in 2012. In India, a contractor fell through a roof sheet
while installing a fall prevention line and, in Scotland, a contractor vehicle
collided with a third-party vehicle resulting in fatal injuries to the contract
driver. These tragic events have been fully investigated.
Two of the key measures used to track process safety are the process
safety incident index (PSII), a weighted index that reflects both the number
and severity of events per 200,000 hours worked and loss of primary
containment (LOPC), a measure of unplanned or uncontrolled releases of
material from primary containment. The PSII has improved by 40% since it
was established in 2008. In 2012 it was 0.26 compared with 0.36 in 2011.
There was also a 40% reduction in the number of LOPC, from 2011 to
2012, falling from 195 in 2011 to 117 in 2012. In addition, the number of oil
spills greater than one barrel reduced from 145 in 2011 to 96, however the
volume of these spills for 2012 was higher at 0.6 million litres compared
with 0.4 million litres in 2011.
2008 2009 2010 2011 2012
Key process safety metrics 2008-2012
(number of incidents)
60
40
20
80
100
120
Process safety incident index
Loss of primary containment (incidents) Volume spilled
Indexed (2008=100)
We measure our personal safety performance through recordable injury
frequency (RIF) and days away from work case frequency (DAFWCF)
as well as the severe vehicle accident rate (SVAR). In 2012 our RIF
(measured by the number of recordable injuries to the BP workforce per
200,000 hours worked) was 0.33, better than the 2011 rate of 0.37. The
2012 DAFWCF, a subset of the RIF that measures the number of cases
where an employee misses one or more days from work per 200,000
hours worked) was 0.09, compared with 0.11 in 2011.
Driving safety has continued to be an area of focus in 2012 with the
formation of a driving safety team to facilitate how we manage the risks
associated with driving in an effective and consistent manner. Despite this,
the severe vehicle accident ratea increased in 2012 to a rate of 0.16
compared with 0.11 in 2011.
a The severe vehicle accident rate (SVAR) is the number of vehicle incidents that result in death,
injury, a spill, a vehicle rollover, or serious or disabling vehicle damage per one million kilometres
travelled.
Financial and operating performance
$ million
2012 2011 2010
Replacement cost profit before
interest and taxa
Fuels 1,385 3,003 2,628
Lubricants 1,276 1,350 1,357
Petrochemicals 185 1,121 1,570
2,846 5,474 5,555
Net (favourable) unfavourable
impact of non-operating items
and fair value accounting effectsb
Fuels 3,611 640 (381)
Lubricants 9(100) 47
Petrochemicals (19) (1) (338)
3,601 539 (672)
Underlying replacement cost profit
before interest and taxac
Fuels 4,996 3,643 2,247
Lubricants 1,285 1,250 1,404
Petrochemicals 166 1,120 1,232
6,447 6,013 4,883
Sales and other operating revenuesd346,491 344,116 266,751
Capital expenditure and acquisitions 5,048 4,130 4,029
thousand barrels per day
Total refinery throughputse2,354 2,352 2,426
%
Refining availabilityf94.8 94.8 95.0
thousand tonnes
Total petrochemicals productiong14,727 14,866 15,594
a Income from petrochemicals produced at our Gelsenkirchen and Mülheim sites is reported
within the fuels business. Segment-level overhead expenses are included within the fuels
business.
b Fair value accounting effects represent the (favourable) unfavourable impact relative to
management’s measure of performance (see page 37 for further details). For Downstream,
these arise solely in the fuels business.
c Underlying replacement cost profit is not a recognized GAAP measure. See footnote b on
page 34 for information on underlying replacement cost profit.
d Includes sales between businesses.
e Refinery throughputs reflect crude oil and other feedstock volumes.
f Refining availability represents Solomon Associates’ operational availability, which is defined as
the percentage of the year that a unit is available for processing after subtracting the annualized
time lost due to turnaround activity and all planned mechanical, process and regulatory
maintenance downtime.
g Petrochemicals production includes 1,625kte of petrochemicals produced at our Gelsenkirchen
and Mülheim sites in Germany for which the income is reported in our fuels business.
Replacement cost profit before interest and tax for the year ended
31 December 2012 was $2,846 million, compared with $5,474 million for
the previous year. The full-year results included a net loss for non-operating
items of $3,174 million, compared with a net loss of $602 million in 2011.
The non-operating items in 2012 mainly related to impairments. (See
page 37 for further information on non-operating items.) In addition, fair
value accounting effects had an unfavourable impact of $427 million,
compared with a favourable impact of $63 million in 2011. (See page 37
for further information on fair value accounting effects.)
After adjusting for non-operating items and fair value accounting effects,
Downstream reported record underlying replacement cost profit before
interest and tax in 2012 of $6,447 million.
The fuels business delivered an underlying replacement cost profit
before interest and tax of $4,996 million for the year; compared with
$3,643 million in 2011. This reflects strong operations that enabled us to
capture the favourable refining environment, partly offset by a reduction in
the supply and trading contribution for the year compared with 2011. The
following table summarizes the volume, by region, of crude oil and
feedstock processed by BP for its own account and for third parties.
Utilization data is also summarized.