Fit for the future
Our industry is changing at a pace not seen in decades. All forms of energy – fossil fuels and renewables – are becoming more abundant and less costly. Through new technologies, energy will be produced more efficiently and in new ways, helping to meet the expected rise in demand. And the world is working towards a lower carbon future.
We are evolving our strategy – allowing us to be competitive in a time when prices, policy, technology and customer preferences are changing.
Our strategic priorities help us to deliver heat, light and mobility solutions for a changing world.
Shift to gas and advantaged oil in the upstream
Invest in new large-scale gas projects, pursue quality oil projects in core basins and seek out new opportunities in selected regions.
How we do this
- Around 75% of our planned start-ups by 2021 are in gas projects.
- All of our planned oil start-ups out to 2021 are lower cost or around our existing basins.
- Maximize recovery, manage decline and extend the life of our existing oil and gas fields.
- Optimize our portfolio by making investments and divestments to deliver long-term value, with the potential to start increasing earnings or cash flow within a short time frame.
We renewed our interest in the Abu Dhabi ADCO onshore concession and signed a letter of intent for the future development of the Azeri-Chirag-Gunashli field - boosting our lower-cost oil production for decades to come. We also made deals to expand our gas exposure in China, Egypt, Indonesia, Mauritania and Senegal, and Oman.
Market-led growth in the downstream
Build competitively advantaged businesses in manufacturing and expand our marketing businesses
How we do this
- Strengthen the competitiveness of our refineries and petrochemicals plants.
- Grow our fuels marketing and lubricants businesses in existing and new markets.
- Create new fuels, lubricants and petrochemicals offers to meet the evolving needs of our customers and partners.
- Develop and prove new business models through partnerships with vehicle manufacturers and others.
We released BP fuels with ACTIVE technology, designed to fight engine dirt and protect against it building up. Now sold in 13 countries, this was our largest fuel launch in a decade. BP announced a strategic partnership with one of Australia’s largest supermarket retailers Woolworths to acquire, rebrand and operate their fuel and convenience sitesa.
a subject to regulatory approval
Venturing and low carbon across multiple fronts
Pursue new ventures and partnerships to meet rapidly evolving technology, consumer and policy trends, and develop cross-business solutions to create new opportunities or strengthen our existing relationships.
How we do this
- Optimize and grow our renewables activities.
- Partner with start-ups to broaden our options and use our ability to bring successful technologies to fruition on a large scale.
- Help customers offset their personal and business emissions through renewables generation or carbon trading.
- Deepen our understanding of future energy, technology and climate change trends through collaboration with academic and research institutions.
We established a presence in China’s fast developing emissions trading market, striking the largest deal yet. And we are partnering with Fulcrum BioEnergy – a company that produces lower carbon jet fuel from household waste – to help them bring biojet to the market at scale.
Modernizing the whole group
Simplify and modernize so we can continue to compete and seize new opportunities with our partners and stakeholders in a changing world.
How we do this
- Simplify our organizational structures and processes.
- Introduce digital solutions to enhance our productivity and services for our customers.
- Maximize value from our assets through our oil, gas, power and renewables trading activities.
- Transform how it feels to work for BP – motivating our people to perform at their best.
- Strive for ways to continue improving the safety and reliability of our operations.
We are using cloud-based platforms for rapid analysis and decision making with state-of-the-art visualization and predictive tools. We are introducing digital apps in our retail and aviation businesses that can improve customer service and convenience. Our new fleet of underwater robots are improving how we monitor the ocean environment and assess risks. And we have expanded our global business services organization, with plans to open our 10th BP centre in late 2017.
The foundations for strong performance
Safe and reliable operations, a balanced portfolio and a focus on returns provide the platform for growth which is critical to the successful delivery of our strategy. These build on our group business model: having the right people, partnerships, processes and technology in place to deliver value across all our activities.
Operational excellence is essential to our success. Good safety leads to reliable operation of our assets, greater efficiency and ultimately better financial results. Our operating management system promotes continuous improvement and systematic ways of working. And, we are using technology to produce energy more safely and efficiently.
Operating reliability and availability
Personal and process safety performance
In 2014 we set out our financial framework in response to the sharp decline in the oil price. We have reached our cash cost reduction target a year early and have now updated and extended the framework out to 2021.
|Principle||Looking ahead - 2018 to 2021|
|Optimize capital expenditure||We expect organic capital expenditure of $15-17 billion per year.
|Make selective divestments
||$2-3 billion of divestments as a result of active portfolio management.
|Payments related to the Gulf of Mexico oil spill
||Around $2 billion in 2018 and moving to annual payments of just over $1 billion from 2019 onwards.
|Maintain flexibility around gearing||Within the 20-30% band.
|Group ROACE||We are aiming to exceed 10% by 2021 at oil prices around $55/barrel.