BP 2015 Annual Report Download - page 17

A relentless focus on safety remains the
top priority for everyone at BP. Rigorous
management of risk helps to protect the
people at the front line, the places where we
operate and the value we create. We
understand that operating in politically
complex regions and technically demanding
geographies requires particular sensitivity to
local environments.
Our strategy
We prioritize value over volume by actively
managing a high-value upstream and
downstream portfolio and investing where
we can apply the distinctive strengths,
capabilities and technologies we have built
up over decades.
We aim to create shareholder value by
growing sustainable free cash flow and
distributions over the long term.
We are pursuing our strategy by setting clear
priorities, actively managing a quality portfolio
and employing our distinctive capabilities.
Clear priorities
First, we aim to run safe, reliable and
compliant operations – leading to better
operational efficiency and safety performance.
We target competitive project execution to
deliver projects as efficiently as possible.
Making disciplined financial choices focused
on capital and cost discipline allows us to
maximize free cash flow and increase the
resilience of our portfolio to changing price
environments.
Quality portfolio
We undertake active portfolio management
to concentrate on areas where we can play
to our strengths. We focus on high-value
upstream assets in deep water, giant
fields, selected gas value chains and
unconventionals★. And, in our downstream
businesses, we plan to leverage our upgraded
assets, customer relationships, brand and
technology to continue to grow free
cash flow.
Our portfolio of projects and operations is
focused where we believe we can generate
the most value, using our commercial agility
and technical capability. This allows us to
build a strong pipeline of future growth.
Distinctive capabilities
Our ability to deliver against our priorities
and build the right portfolio depends on our
distinctive capabilities. We apply advanced
technology across the hydrocarbon value
chain, from finding resources to developing
energy-efficient and high-performance
products for customers. We work to develop
and maintain strong relationships – with
governments, partners, civil society and others
– to enhance our operations in more than 70
countries across the globe. And the proven
expertise of our employees comes to the fore
in a wide range of disciplines.
Innovative customer offers Collaborative partnerships Pioneering commercial arrangements
We provide our customers with a broad range
of premium products, tailored to meet their
needs. Our Castrol brand has a long history
of product innovation and industry firsts, such
as our recently launched Nexcel oil-change
technology. In retail, our combination of quality
brands creates a highly differentiated offer. For
example, in the UK this includes our partnership
with Marks & Spencer, a market-leading loyalty
programme with Nectar, the Wild Bean Café
and Apple Pay®.
We have considerable experience of managing
the complexities of large projects with multiple
parties. For example, BP is leading the Shah
Deniz Stage 2 and Southern Corridor projects,
in partnership with 10 other national and
international oil companies, to construct one of
the world’s longest pipelines from Azerbaijan to
Italy. Our history of working with governments,
international agencies, communities and
partners has proved invaluable in establishing
the route between the landlocked Caspian Sea
and the Mediterranean.
We find innovative and mutually beneficial ways
of working. The Rumaila oil field in Iraq is one of
the world’s largest by production, although this
had fallen after years of conflict and under-
investment. In 2009 BP and China National
Petroleum Corporation committed to work
with Iraq’s South Oil Company to modernize
operations and increase production. BP
recovers costs, irrespective of oil price, and a
fee per barrel of incremental production above a
defined threshold.
★ Defined on page 256.
Industry context
See how we are responding to the
lower price environment on pages
18-19.
Our key performance indicators
See how we measure our progress
on page 20.
Risks
Find out how we manage the risks to
our strategy on page 51.
BP Annual Report and Form 20-F 2015
Strategic report
13