BP 2015 Annual Report Download - page 40

Refining
At 31 December 2015 we owned or had a share in 13 refineries producing
refined petroleum products that we supply to retail and commercial
customers. For a summary of our interests in refineries and average daily
crude distillation capacities see page 225.
In 2015, refinery operations were strong, with Solomon refining availability
sustained at around 95% and utilization rates of 91% for the year. Overall
refinery throughputs in 2015 were flat compared to 2014, with reduced
throughput from ceasing refining operations at Bulwer refinery, offset by
increased throughput at the Whiting and Kwinana refineries.
2015 2014 2013
Refinery throughputsathousand barrels per day
USb657 642 726
Europe 794 782 766
Rest of worldb254 297 299
Total 1,705 1,721 1,791
%
Refining availability 94.7 94.9 95.3
Sales volumes thousand barrels per day
Marketing salesc2,835 2,872 3,084
Trading/supply salesd2,770 2,448 2,485
Total refined product sales 5,605 5,320 5,569
Crude oile2,098 2,360 2,142
Total 7,703 7,680 7,711
a Refinery throughputs reflect crude oil and other feedstock volumes.
b Bulwer refinery in Australia ceased refining operations in 2015. The Texas City and Carson
refineries in the US were both divested in 2013.
c Marketing sales include sales to service stations, end-consumers, bulk buyers and jobbers (i.e.
third parties who own networks of a number of service stations) and small resellers.
d Trading/supply sales are sales to large unbranded resellers and other oil companies.
e Crude oil sales relate to transactions executed by our integrated supply and trading function,
primarily for optimizing crude oil supplies to our refineries and in other trading. 87,000 barrels per
day relate to revenues reported by the Upstream segment.
Logistics and marketing
Downstream of our refineries, we operate an advantaged infrastructure and
logistics network that includes pipelines, storage terminals and tankers for
road and rail. We seek to drive excellence in operational and transactional
processes and deliver compelling customer offers in the various markets
where we operate. In early 2016 we agreed the disposal of our Amsterdam
oil terminal. We also announced our intention to enter into joint ventures
on certain midstream assets in North America and Australia to increase our
competitiveness and enable growth in these regions.
We supply fuel and related retail services to consumers through company-
owned and franchised retail sites, as well as other channels, including
dealers and jobbers. We also supply commercial customers within the
transport and industrial sectors.
Number of retail sites operated under a BP brand
Retail sitesf 2015 2014 2013
US 7,000 7,100 7,700
Europe 8,100 8,000 8,000
Rest of world 2,100 2,100 2,100
Total 17,200 17,200 17,800
f Reported to the nearest 100. Includes sites not operated by BP but instead operated by dealers,
jobbers, franchisees or brand licensees under a BP brand. These may move to or from the BP
brand as their fuel supply or brand licence agreements expire and are renegotiated in the normal
course of business. Retail sites are primarily branded BP, ARCO and Aral. Excludes our interests
in equity-accounted entities that are dual-branded.
Retail is the most material element of our fuels marketing operations and
has good exposure to growth markets. In addition we have distinctive
partnerships with leading retailers in six countries and plan to expand
elsewhere. Retail is a significant source of growth today and is expected to
be so in the future. This year we began rolling out our new BP fuels with
ACTIVE technology in Spain and we plan to continue this roll-out in
additional markets in 2016.
Supply and trading
Our integrated supply and trading function is responsible for delivering
value across the overall crude and oil products supply chain. This structure
enables our downstream businesses to maintain a single interface with oil
trading markets and operate with one set of trading compliance and risk
management processes, systems and controls. It has a two-fold purpose:
Improving operations
Our Castellón refinery in Spain has been ranked among the best
refineries for availability in the world by Solomon international standards.
Since 2009 the refinery has had an ongoing programme in place that is
focused on unlocking local employee knowledge to find efficiencies and
improvements to safety and operations.
Using BP’s continuous improvement methodology, the programme has
captured more than 2,500 ideas, with contributions from around 80% of
the refinery’s employees. Ideas have covered everything from reducing
risks, improving efficiency, increasing margins, reducing costs and
increasing plant availability to improving staff engagement. All of these
have been analysed to draw out underlying issues and develop actions
that address these.
By April 2015 around 1,000 ideas had been implemented and the benefits
of the programme are being realized with reduced break-even margins,
improved safety ratios and increased plant availability and utilization.
The programme has contributed to the improvement in Castellón’s
break-even margin by more than $2 per barrel between 2009 and 2015.
The refinery has also seen that steps to improve safety go hand-in-hand
with improving operational reliability. Since the programme began, there
has been a steady reduction in tier 1 and 2 process safety events –
those with the potential to cause the most harm to people and property.
Over the same time, the refinery’s utilization – a measure of how much
crude is being processed – improved, up from 78% in 2009 to 93% in
2015.
Downstream provides strong cash generation for the group.
BP Annual Report and Form 20-F 201536