BP 2012 Annual Report Download - page 34

Cautionary statement
This document contains certain forecasts, projections and forward looking statements
– that is, statements related to future, not past events – with respect to the financial
condition, results of operations and businesses of BP and certain of the plans and
objectives of BP with respect to these items. These statements may generally, but not
always, be identified by the use of words such as ‘will’, ‘expects’, ‘is expected to’,
‘aims’, ‘should’, ‘may’, ‘objective’, ‘is likely to’, ‘intends’, ‘believes’, ‘anticipates’, ‘plans’,
‘we see’ or similar expressions. In particular, among other statements, (i) certain
statements in the Chairman’s letter (pages 8-9), the Group chief executive’s letter
(pages 10-11), the Business review (pages 3-99) and Additional disclosures (pages
161-175), including but not limited to statements under the headings ‘Energy outlook’,
‘Our strategy’, ‘Outlook’ and ‘Looking Ahead’, with regard to expectations regarding
BP’s agreement with and prospective shareholding in Rosneft, including BP’s
expectations regarding its representations on the Rosneft board, the composition of
the board of directors, expectations regarding our strategy and strategic priorities
including our Upstream and Downstream strategies and our longer term objectives,
plans to deliver shareholder value, plans to continue to simplify the organization and
portfolio, plans to focus on efficient execution and use of capital, plans to prioritize
value rather than seeking to grow production volume for its own sake, prospects for
the settlement of outstanding claims related to the Gulf of Mexico oil spill, plans to
continue to meet commitments in the Gulf Coast region, plans to implement the
recommendations of the Bly Report, plans to appoint two independent monitors and
an independent auditor, BP’s intention to prioritize operating cash flow and
replacement cost operating profit over barrels of production, plans to work to focus and
improve the business, plans to enhance safety and earn back trust, anticipated
increases in regulation and taxation of the energy industry and energy users,
projections regarding the ability of renewable energy sources to meet total energy
demand, expectations regarding investments in proprietary technology, expectations
regarding LoSal technology, plans to sell assets and entities, expectations regarding the
future level of capital expenditures through the end of the decade, expectations
regarding the amount of divestments per year, the expected level of gearing,
expectations regarding the ‘10-point plan’, expectations regarding future dividend
payments and BP’s plans to continue to pursue a progressive dividend policy, BP’s
outlook on global energy trends to 2030 and beyond, BP’s outlook on its ability to meet
the growing demand for energy, the intention to make $2-3 billion in disposals per
annum on an ongoing basis, BP’s plans to grow operating cash flow and margins by
2014 and the expected quantum of growth, plans for the use of expected improved
cash flow, plans to grow free cash flow in Downstream, expectations regarding the
level and types of investments and divestments, expectations regarding the Shah
Deniz consortium, BP’s plans for involvement in growth markets, the anticipated timing
for completion of the disposition of certain BP assets and entities and estimates of the
final proceeds therefrom, future production levels including expectations for an
increase in high-margin production, the timing and composition of future projects
including expected Final Investment Decisions, start-up, construction, commissioning,
completion, timing of production, level of production and margins, expectations for
drilling and rig activity in the Gulf of Mexico, the timing of measures taken to improve
efficiency and margin quality, expectations for the number of rigs in operation, the
timing of the delivery of new tankers and rigs, expectations regarding turnover time
and the volume of proved undeveloped reserves held for more than five years, the
estimated cost of the settlements with the Plaintiffs’ Steering Committee in MDL
2179, the expected amount, source and timing of payments under any settlements
related to the Gulf of Mexico oil spill, expectations with regard to the terms of any
settlements and BP’s compliance therewith, the anticipated effect of accounting
changes on BP’s earnings and cash flow, the timing of the positioning of well cap
systems and dispersant application equipment packages, expectations regarding
employee training, expectations for an increase in the carbon intensity of operations,
expectations regarding environmental research, plans regarding the launch of BP’s
human rights policy, expectations regarding regulation and taxation of the energy
industry and energy users, BP’s expectations with regard to employee diversity and
inclusion, the timing for completion of and prospects for the High-Performance
Computing centre in Houston, prospects for debarment of BP entities and the
expected duration and consequences of any such debarment, the timing of the
commissioning of the LNG train at Tangguh, plans to retain the petrochemicals
manufacturing plants at Texas City, expectations regarding future levels of capital
investment, plans regarding Project 20K, the expected impact of the expiry of the
Abu Dhabi onshore concession, plans regarding environmental restoration of the Gulf
Coast, future global refinery capacity and utilization, plans and timing for the
completion of the upgrade to and start-up of the Whiting refinery, plans regarding
upgrades to the Cherry Point refinery, expectations regarding oil price movements in
2013, expectations regarding the gas market in 2013 and the expected drivers thereof,
prospects for the persistence in a large gap between US and European gas prices in
2013, BP’s plans to license back the ARCO brand, prospects for Upstream’s
contribution to BP’s plans to increase operating cash flow by around 50% by 2014,
expectations regarding the unit operating cash margins of new upstream projects, BP’s
strategies with regard to optimizing value across the business, plans regarding BP’s
PTA project, the timing of a review of BP’s assets and estimation processes, plans
regarding the implementation of enhancements to BP’s risk management system,
expectations regarding refining margins, expectations regarding the market for
lubricants and petrochemicals, expectations regarding Downstream capital
expenditures, expectations regarding the reduction of net debt and the net debt ratio,
the expected future level of depreciation, depletion and amortization, the completion of
planned and announced divestments, expectations regarding the announced disposal
of TNK-BP to Rosneft and acquisition of an 18.5% shareholding in Rosneft, BP’s
intentions to use part of the cash proceeds from the planned disposal of TNK-BP to
offset any dilution to BP’s earnings per share, expectations about BP’s future
investments and operations in the North Sea, expectations regarding reported
production and underlying production in Upstream, expectations regarding Vivergo, the
timing of the completion of the Angola LNG plant, the timing for the completion of the
Mad Dog spar, and the level of future turnaround activity; (ii) the statements in the
Business review (pages 3-99), Corporate governance (pages 101-126), the Directors’
remuneration report (pages 127-145), and Shareholder information (pages 153-159)
with regard to the board’s goals and plans stemming from the board’s annual
evaluation, expectations regarding the timing of events with investors, plans to
continue the ongoing process of embedding OMS and to ensure joint venture partners
follow principles similar to those of the OMS, plans and timing for the implementation
of the Bly report recommendations, plans regarding investments in research, the
timing of projects, programs and initiatives, intentions to continue monitoring process
safety at TNK-BP, intentions to implement group-wide practices for oil spill
preparedness and response and crisis management, plans to spend $700 million on
certain refinery-related safety measures, plans to implement enhanced and
standardized technical practices across the refining business, the timing of, cost of,
source of payment and provision for future remediation and restoration programmes
and environmental operating and capital expenditures, plans to halve US refining
capacity, plans and expectations with regard to the remuneration, pensions and other
benefits of executive directors, expectations regarding the impact of various
regulations upon BP’s business and expectations regarding greater regulation and
increased operating costs in the Gulf of Mexico in the future; (iii) the statements in the
Business review (pages 90-93) with regard to future dividend and optional scrip
dividend payments, future capital expenditures and capital expenditure commitments,
taxation, intentions to maintain a significant liquidity buffer, future working capital and
cash flows, gearing and the net debt ratio, BP’s intention to maintain a strong cash
position, expectations regarding taxes due upon repatriation of cash into the UK,
expectations regarding total capital expenditure, expected payments under contractual
and commercial commitments and purchase obligations, and including under ‘Liquidity
and capital resources – Trend information’, with regard to production in Upstream, the
expected financial impact of refinery turnarounds, expectations regarding
petrochemicals margins and the average quarterly charge for Other businesses and
corporate, estimated levels of capital expenditure in 2013 and to the end of the decade,
estimated amount of divestments, intentions regarding net debt ratio and the expected
level of depreciation, depletion and amortization, and the expected level of underlying
effective tax rate; and (iv) certain statements in Additional disclosures (pages 161-175)
regarding the anticipated timing of trial proceedings, court decisions and potential
investigations and civil or criminal actions by US state and/or local governments; are all
forward looking in nature.
By their nature, forward-looking statements involve risk and uncertainty because they
relate to events and depend on circumstances that will or may occur in the future and
are outside the control of BP. Actual results may differ materially from those expressed
in such statements, depending on a variety of factors, including the specific factors
identified in the discussions accompanying such forward-looking statements; the
receipt of relevant third party and/or government approvals; the timing of bringing new
fields onstream; the timing of certain disposals; future levels of industry product
supply, demand and pricing, including supply growth in North America; OPEC quota
restrictions; PSA effects; operational problems; general economic conditions; political
stability and economic growth in relevant areas of the world; changes in laws and
governmental regulations; regulatory or legal actions including the types of
enforcement action pursued and the nature of remedies sought; the actions of
prosecutors, regulatory authorities and courts; the actions of the Claims Administrator
appointed under the Economic and Property Damages Settlement; the actions of all
parties to the Gulf of Mexico oil spill-related litigation at various phases of the litigation;
exchange rate fluctuations; development and use of new technology; the success or
otherwise of partnering; the actions of competitors; the actions of contractors; natural
disasters and adverse weather conditions; changes in public expectations and other
changes to business conditions; wars and acts of terrorism or sabotage; and other
factors discussed elsewhere in this report including under ‘Risk factors’ (pages 38-44).
In addition to factors set forth elsewhere in this report, those set out above are
important factors, although not exhaustive, that may cause actual results and
developments to differ materially from those expressed or implied by these
forward-looking statements.
Statements regarding competitive position
Statements referring to BP’s competitive position are based on the company’s belief
and, in some cases, rely on a range of sources, including investment analysts’ reports,
independent market studies and BP’s internal assessments of market share based on
publicly available information about the financial results and performance of market
participants.
Business review: Group overview
BP Annual Report and Form 20-F 2012
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