BP 2013 Annual Report Download - page 12

Group chief executive’s letter
Dear fellow shareholder,
For BP, 2013 was a year of good progress in building a safer, stronger and better
performing company. We made new discoveries, started up new operations, strengthened
our portfolio and secured a new future in Russia. We also maintained our investment in the
US while standing up for what we believe to be right.
Within BP, sadly, 2013 will also be remembered for the terrorist attack in Algeria in
January, when four staff members and 36 colleagues from other companies were killed.
Those who died had many friends in BP and our thoughts remain with their loved ones,
and with those who survived that terrible ordeal. I was proud of the way people in BP
responded – with great compassion, but also with great fortitude.
This report contains a wealth of information on our performance. I would like to draw out
a few of the year’s highlights, all of which demonstrate how we are implementing our
strategy, with its emphasis on clear priorities, a quality portfolio and distinctive capabilities.
Clear priorities: safety, capital discipline, project execution
The first of our priorities is to run safe and reliable operations. In 2013 we made good
progress overall, but unfortunately we also suffered two driving-related fatalities as well as
the loss of the four employees murdered at In Amenas. Our thoughts are with those who
have been bereaved. We will implement the lessons learned.
In terms of general safety performance, however, we saw some encouraging progress.
The number of tier 1 process safety events – the most significant incidents – fell to 20
from 43 in 2012 and 74 in 2011. We are definitely heading in the right direction, but there
is always more to do and we remain vigilant.
We also saw improvements in measures that reflect the underlying health of our business.
For example, in upstream BP-operated plant efficiencya reached 88%, and refining
availability in downstream averaged 95.3% – the highest level for 10 years. These numbers
reinforce my view that safety and value have the same roots: systematic, disciplined
operations, undertaken by people who respect each other and work as one team.
In terms of capital discipline, in 2013 we invested $24.6 billionb, which kept us within our
$25-billion limit, and we expect to keep capital expenditure broadly the same in 2014. We
know we have to invest wisely so we maintain our shareholders’ trust.
Turning to project execution, we saw three upstream major projects start up in 2013 – in
the Gulf of Mexico, Angola and Australia. Three more followed closely in the first months
of 2014 – the Chirag oil project in Azerbaijan and the Mars B and Na Kika Phase 3 projects
in the Gulf of Mexico.
Quality portfolio
Beyond these start-ups, we extended our portfolio as a platform for growth in several
other ways.
For example, we grew our exploration position by participating in seven potentially
commercial discoveries, in Angola, Brazil, Egypt, India and the Gulf of Mexico. We also drilled
17 exploration wells, more than in the previous two years put together. BP has built up great
skills in finding oil and gas and we are seeing the results of investing in our explorers.
95.3%
2013 refining availability.
129%
Reserves replacement ratio, excluding the impact
of acquisitions and divestments.
See footnote b on page 14.
We made new discoveries,
started up new operations,
strengthened our portfolio
and secured a new future
in Russia.
Bob Dudley
BP Annual Report and Form 20-F 20138