A letter from our group chief executive
Our aim is to keep building a BP that is well matched to the world's evolving energy needs.
- Bob Dudley, Group Chief Executive, BP
Whenever I visit a BP site, I am struck by the wide range of people involved in, and affected by, what we do. From employees, partners and suppliers to governments, investors and those who live next to one of our facilities – everyone has high expectations of this company. We must fulfil those expectations, and meet our range of responsibilities, as we work to create a stronger, safer BP.
Our responsibilities include helping to address the world’s growing need for energy. Some 100 years ago society consumed energy at a rate of around two million tonnes of oil equivalent a day. Today the figure is closer to 32 million and we expect that could rise to as much as 45 million by 2030, if current trends continue.
Behind these big numbers you find a story of human progress. Reliable and affordable sources of energy can help to improve many things, from living standards to life expectancy. Around the world, a growing supply of energy is helping to lift people out of poverty and increase opportunity.
From safety comes trust
BP has an important contribution to make to the changing world I have just described. But we can only play our part if we start from the solid foundation of safe and reliable operations. Following the Deepwater Horizon incident, our employees have worked systematically to enhance safety and risk management. And we have turned the insights gained into new oil spill response plans and technologies, which we are adopting within BP and sharing with others.
As someone who has worked in the oil and gas industry for more than 30 years, I know that risk can never be entirely eliminated. But it can be managed effectively, and in increasingly sophisticated ways. The events of 2010 were a tragic reminder that trust can take years to earn and just moments to lose. I am determined this company will earn back and keep people’s trust.
We continue to meet our commitments to the people of the Gulf states in the US. In 2012 we made the final payment into the $20-billion trust fund, of which $9.5 billion has been distributed to date. We continued to support environmental research, and provided funding for the local tourism industry, with many areas having record years in 2012. We reached settlements with the Department of Justice and the Securities and Exchange Commission, and are working with the Environmental Protection Agency to resolve suspension and debarment issues. As I write, legal proceedings are ongoing in New Orleans.
The Gulf of Mexico is very important to BP. Our commitment to the restoration of affected areas and long-term investment in the region will continue.
Working around the world
Wherever we operate around the world, BP keeps working to develop strong relationships with governments and local communities. The socio-economic development, environment and other issues covered in this review are important to BP and to me personally. They are essential in determining whether people trust BP to operate in their area.
2012 marked a significant change to our relationships in Russia when we agreed to sell our 50% shareholding in TNK-BP to Rosneft, and take our holding in Rosneft to 19.75%. On completion, the transaction will enable us to maintain a strong position in the world’s largest oil and gas producing country. We aim to share our expertise with the Rosneft team as they work to transform the company’s asset base, management processes and corporate governance.
I would like to reflect, with great sadness, on the terrible events that took place at the In Amenas joint venture facility in Algeria in January 2013. Our thoughts are with the families and friends of those who lost their lives in the attack. We are working with government agencies and others to determine what can be learned from this shocking incident.
Making choices for BP
We have made many changes to what we do and how we do it, turning lessons learned into action. We have reorganized and refocused. The sale of $38 billion of assets is helping us to reduce complexity and risk, and concentrate investment on our areas of distinctive strength. And we have set a new direction for the company based on a clear strategy.
Our aim is to keep building a BP that is well matched to the world’s evolving energy needs. Collaboration and systematic rigour will be increasingly important as we tackle the tough technical, environmental and social challenges ahead in areas such as deepwater, giant fields and unconventional gas. In unconventional gas, for example, hydraulic fracturing can provide a safe and secure source of energy if undertaken in the right way.
Along with providing much needed energy today, BP is helping to address longer-term issues related to energy use. For example, we apply a carbon price to some of our new projects, and require existing operations to consider and implement cost-effective efficiency measures. We inform debate by conducting analysis and supporting research. We invest in biofuels and wind because we think they can play an important role in the diverse energy mix required.
Informing the big decisions
Just as BP is taking important decisions about its strategic priorities, so the wider world must make choices about future energy supply and use. How should a growing demand for energy be balanced with the need to address rising greenhouse gas emissions? Is there the necessary political will to set a universal price for carbon? Will the research, development and deployment of important lower-carbon energy technologies be given adequate support? These and other questions must be considered as governments, business, non-governmental organizations and the public work together to set the right direction.
There are no easy answers and there is unlikely to be agreement on all sides on every point, but it is essential that our debates and decisions are based on a deep understanding of the issues involved, not sentiment. This is why, for example, BP is funding the Energy Sustainability Challenge, a consortium of academics that is analysing the complex relationships between energy and natural resources. Energy literacy is the key to making the right choices for the future.
I believe a stronger and safer BP can make a vital contribution to growth and progress as the world develops over the coming decades. There is plenty to do, as we work on our priorities of enhancing safety and risk management, earning back trust and creating value. We intend to play a positive role in shaping the long-term future of energy. This Sustainability Review is part of a wider commitment to engage with the world on what we do and how we do it. We aspire to communicate openly about our responsibilities, our actions and our perspectives on global energy issues as we move forward.