BP 2010 Annual Report Download - page 23


Businessreview
Business review
Ourperformance
Performancein2010wasovershadowedbythe
wellblowoutandsubsequentoilspillintheGulfof
Mexico.Beyondthistragicevent,theongoing
underlyingperformanceofthegroupwasstrong.
Safety
InApril2010,followingawellblowoutintheGulfofMexico,anexplosion
andreoccurredonthesemi-submersiblerigDeepwaterHorizon,resulting
inthetragiclossof11livesandamajoroilspill.Therewerethreeother
contractorfatalitiesduring2010.Wedeeplyregretthelossoftheselives
andtheimpactfromtheoilspill.(See Gulf of Mexico oil spill on page 34 for
more information on the Deepwater Horizon accident.)
Ourpriorityremainstohavesafe,reliableandcompliantoperations
worldwide.Wehavesetupamorepowerfulsafetyandoperationalrisk
function.Asanimmediatestep,wehavereinforcedthelinkbetween
safetyperformanceandrewardinthefourthquarterof2010.Other
programmesarenowunderway,includingareviewofcontractor
managementandafreshlookathowwemanagerisksystematically
acrossBP.
WealsocontinuedtoembedourOMSwithinthegroup,withallof
ouroperatingsitestransitioningtothesystembytheendofFebruary2011.
Recordableinjuryfrequency(RIF,ameasureofthenumberof
reportedinjuriesper200,000hoursworked)was0.61in2010,compared
with0.34in2009and0.43in2008.Theincreasein2010wassignicantly
impactedbythenumberofincidentsarisingintheresponseeffortforthe
GulfofMexicooilspill,whichresultedinsignicantlyhigherpersonalsafety
incidentratesthanforotherBPoperations.
Thenumberofoilspillsgreaterthanonebarrelwas261in2010
comparedwith234in2009and335in2008.Thevolumespilledwas
dominatedbytheGulfofMexicoincident.SeeOilspillandlossof
containmentinSafetyonpage68.
Ourgreenhousegas(GHG)emissionsawere64.9Mtein2010,
comparedwith65.0Mtein2009.Wehavenotincludedanyemissionsfrom
theGulfofMexicoincidentandtheresponseeffortduetoourreluctance
toreportdatathathassuchahighdegreeofuncertainty.
People
During2010,wecontinuedtofocusonincreasingthelevelofspecialist
skillsandexpertiseacrosstheworkforce.Theexceptionalresponsetothe
oilspillwasareassuringexampleofthecapabilitiesandcommitmentof
ourstaff.
Thetotalnumberofnon-retailstaffwasbroadlystablein2010,
adjustingforstaffreductionsassociatedwithassetdisposals.Total
non-retailrecruitmentwasaround8,000.Thiswasoffsetbyaround7,700
staffleavingthecompanyplusafurther2,300staffleavingassociatedwith
assetdisposals.Thetotalnumberofemployees(includingretailstaff)was
79,700attheendof2010.





Operating and nancial performance
Ourresultsin2010weregreatlyimpactedbythechargerecordedfor
theGulfofMexicooilspillincident.Stepsweretakentostrengthenthe
balancesheet,includingaprogrammeofassetdisposals,withvery
goodprogressmade.Cashandcashequivalentsattheendof2010was
$18.6billionandthenetdebtratiowas21%.
Notableachievementsin2010include:
ExplorationandProduction
• R eplacingmorethan100%ofourprovedreserves,excluding
acquisitionsanddisposals,onacombinedbasisofsubsidiariesand
equity-accountedentitiesb.
• Takingnalinvestmentdecisionson15projects,withanexpectedtotal
BPnetcapitalinvestmentof$20billion.
• IncreasingproductionfortheRumailaeldinSouthernIraqbymore
than10%abovetherateinitiallyagreedbetweentheRumaila
OperatingOrganizationpartnersandtheIraqiMinistryofOilin
December2009.ThissignicantmilestonemeansthatBPandits
partnersbecameeligibleforservicefeesfromtherstquarterof2011.
• Accessingnewresourcesacrosstheglobe–inAzerbaijan,China,
theGulfofMexico,Indonesia,onshoreNorthAmericaandtheUK.
• MakingtheHodoadiscoveryinEgypt,therstOligocenedeepwater
discoveryintheWestNileDelta.
• TNK-BPincreasingitsproductionby2.5%in2010comparedwith2009.
• Securingagreementstodisposeofalmost$22billionofnon-core
assetsinlinewithourplansfollowingtheGulfofMexicooilspill.
ReningandMarketing
• Improvingoverallnancialperformancedelivery,primarilydrivenby
strongoperationalperformanceacrossallofourbusinesses,the
continuationofourprogrammetodeliverfurtherefcienciesanda
morefavourablereningenvironment.
• AchievingaSolomonreningavailabilitycof95.0%,whichisanincrease
of1.4percentagepointscomparedwith2009.
• Ac hievingrecordvolumesinpetrochemicalsandstronglubricants
performance.
• MakingsignicantprogressintheWhitingrenerymodernization
project.
• S tartingcommercialproductionatournewjointventureacetylsplant
inNanjing,China.
• Castrol’ssponsorshipofthe2010FIFAWorldCup™inSouthAfrica.
• SuccessfullyexitingfromourconvenienceretailbusinessinFrance.
• Completingthedivestmentofseveralpackagesofnon-strategic
terminalsandpipelinesintheUSEastofRockiesandWestCoast.
• Sellingour15%interestinEthyleneMalaysiaSdnBhd(EMSB)and
60%interestinPolyethyleneMalaysiaSdnBhd(PEMSB)toPetronas.
aSee
footnoteainEnvironmentonpage72.
bSeeExplorationandProduction–provedreservesreplacementonpage42formoredetailed
informationonreservesreplacementforsubsidiariesandequity-accountedentities.
cReningavailabilityrepresentsSolomonAssociates’operationalavailability,whichisdened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.
BPAnnualReportandForm20-F2010 21