Examples of our performance in action throughout the year
We are simplifying and modernizing the way we work in BP to perform more efficiently in the current industry environment, and to support strong performance and growth into the long term. We now deliver many of the group’s business support activities – financial reporting, supplier payment, customer order and cash collection – from our global business services (GBS) organization. GBS develops standard processes and procedures and uses insight from data analytics, innovation and technology, to find ways to improve the way we do business. This allows us to drive efficiencies across BP, as well as offering significant economies of scale. The service offer has recently expanded to include human resources, tax, internal control and procurement activities, and we expect further growth in both existing operations and new areas. GBS has a network of nine centres, five run by BP, the others by Accenture, with about 5,500 staff around the world. We plan to open a new BP location in Szeged, Hungary in late 2017. Through operating and sourcing processes more efficiently, GBS is delivering significant value to BP.
BP joined forces with Det norske and Aker in 2016 to form Aker BP ASA. Listed on the Oslo stock exchange, Aker BP is now Norway’s largest independent oil and gas producer. The company’s strategy is underpinned by a blend of Det norske’s nimble business practices, Aker’s industrial experience and BP’s global scale expertise across the hydrocarbon value chain. By combining the assets of these companies, Aker BP has a strong balance sheet with the financial resources to support both ongoing investment in the business and distributions to shareholders. BP expects to apply the knowledge gained from Aker BP across its own businesses.
BP has a long track record in Egypt stretching back over 50 years with investments exceeding $30 billion – making us one of the largest foreign investors in the country. In addition to our strong incumbent position and progress with the West Nile Delta major project, BP purchased a 10% interest in the Zohr gas field from Eni and has plans to accelerate the development of three significant gas discoveries in the East Nile Delta area. The first of these – Atoll in the North Damietta offshore concession – has been approved for an early production scheme to bring up to 300 million standard cubic feet a day (mmscf/d) of gas to the Egyptian domestic gas market starting in the first half of 2018. And in our Nooros development, we ramped up production from zero in the first half of 2015 to 875mmscf/d gross in January 2017. We also made an important discovery in the area’s Baltim South development in 2016, which we are appraising to determine the full resource potential. If viable, we plan to utilize existing infrastructure to accelerate its development and achieve early production start-up. These achievements demonstrate our commitment to playing an ongoing role in helping to secure Egypt’s energy supply for many years to come.
By using an LNG train to convert natural gas into liquid form we make it more practical and commercially viable to transport by sea across countries. At our Tangguh LNG facility in Indonesia, we’ve supplied natural gas to two 3.8 million tonnes per annum (mtpa) LNG trains since 2009. And in line with our shifting focus to gas in BP, we are adding a third train that will bring total plant capacity to 11.4mtpa. We received approval for this expansion project with our production-sharing agreement partners in 2016. The project will also include construction of two offshore platforms and 13 new production wells, as well as an expanded LNG loading facility and supporting infrastructure. We expect train 3 to come into operation in 2020. Through this project we are supporting the country’s growing demand for energy. Around 75% of the LNG production from train 3 will be sold to the Indonesian state electricity company. The project will also help with economic growth in the area and is expected to provide 10,000 jobs over the project period.
We get the best value from our refineries when they run efficiently at full capacity. Across all of our refineries staff work hard to maintain safe and reliable operations, prevent unplanned shutdowns and optimize operational performance. Kwinana, just outside Perth in Western Australia, is the country’s largest refinery. It supplies virtually all the petrol and diesel demand in the country‘s south west and all jet fuel for Perth Airport. And for the last three years we’ve been implementing improvement works across the refinery – covering everything from sourcing good quality crude to effective planning and scheduling, and maintaining effective manufacturing operations. We are already seeing a difference at Kwinana, with the refinery improving its availability – the percentage of time process units are capable of running at full capacity – in 2016. And the refinery’s utilization – the difference between production capacity and what’s actually processed – places it in the top quartile of Asia-Pacific refineries based on the latest fuels study by Solomon Associates.
BP supplies fuel for more than 6,000 flights a day and we work to help our aviation customers reduce their emissions in a number of ways. At Oslo airport in Norway we helped to make biojet available through its normal supply infrastructure. As a result of Air BP’s collaboration, the airport won the 2016 Eco-Innovation environment award from Airport Carbon Accreditation. We also invested in Fulcrum BioEnergy® – a company that produces sustainable jet fuel from household waste. Our strategic partnership aims to help the company bring biojet to the market at scale. But our commitment doesn’t end there – in 2016 we achieved carbon neutrality for our into-plane fuelling services across a network of more than 200 Air BP-operated facilities. And we have made a 10-year commitment to retain our carbon neutral accreditation and aim to reduce emissions by 5% over this period. All of these changes contribute to the International Air Transport Association’s aim to achieve carbon neutral growth by 2020 and a 50% reduction in carbon emissions by 2050.
Engine technologies continually evolve. So we work to anticipate and understand these changes to make sure we develop fuels that complement the latest engine innovations – while continuing to benefit older engines too. We have rolled out our new BP fuels with ACTIVE technology in 13 countries including Australia, South Africa and the US. These fuels use an innovative formula designed to actively fight dirt in the car’s engine and protect against it building up. This helps keep engines running as intended by car manufacturers – smoothly and efficiently – and helps reduce the risk of unplanned maintenance.
When a facility is unexpectedly out of action, production revenues are lost and costs rise from unscheduled maintenance. But ‘plant operations advisor’, a new digital solution we are developing in collaboration with GE Oil & Gas, will help our engineers respond to issues in real time, reducing unplanned downtime and improving the reliability of operational facilities. The system identifies early warning signs of potential performance problems. It gathers machinery and plant data, analyses it and brings it all to a single screen so that engineers can troubleshoot quickly and resolve potential issues. We are now piloting the system at an offshore operating hub in the Gulf of Mexico.
Seismic data helps us see into reservoir rock and detect where hydrocarbon potential may lie. Achieving high-quality images in difficult terrains is costly and needs many people in the field with existing technology. In partnership with Rosneft and Schlumberger’s WesternGeco, we are developing innovative technologies to improve our surveys with faster, better-quality data, captured at a lower cost with less risk. Our project has the potential to expand the industry’s ability to image the subsurface, especially in challenging land environments across the world – and it also offers environmental and safety benefits when working in extreme climates and areas that are difficult to access.
People are increasingly choosing to live in cities, so roads have become much busier – meaning repetitive stopping, waiting and starting again. In fact, independent global research shows that drivers spend up to a third of urban journeys idling – and slowly, but permanently, this wears away critical engine parts. That’s why we’ve launched new engine oils containing our latest patented molecules, designed for the needs of today’s engines. Castrol MAGNATEC with DUALOCK contains molecules that lock together to form a powerful layer of engine protection. We’ve been helping to protect engines worldwide against warm-up wear for 20 years. Now our unique DUALOCK technology builds on that by reducing both warm-up and stop-start wear by up to 50%.