A note from the President
This annual update focuses on our view of the most significant issues affecting our business in 2008-09 and details our performance across a range of indicators, ahead of our next full report which will be produced in 2010.
Before examining our performance, it is worth reflecting on two issues which, over the past twelve months, have dominated the world’s business, political and news agendas – the global financial crisis (GFC) and climate change policy.
The GFC led to recession in many economies. While the Australian economy was less affected than many by the crisis, we did see a slow-down in economic activity and this, combined with a drop in international oil and gas prices, impacted on demand for our products.
While debate around climate change, nationally and internationally, continues, BP’s position is clear. We support action on climate change and believe that an emissions trading scheme should be central to Australia’s response. Furthermore, we believe that any trading scheme should be supported by measures that drive the uptake of large-scale, low-carbon technologies. In responding to many Government policy proposals and inquiries, we have continued to argue that the Carbon Pollution Reduction Scheme (CPRS) is generally well-designed, and have highlighted the need to provide transitional assistance to industries like refining and Liquefied Natural Gas (LNG) production that are trade-exposed and emissions-intensive.
We continue to improve our safety and environmental performance with over 25% reduction in recordable injuries and over 50% reduction in the number of spills. We have also seen over 20% reduction in potable water consumption, predominantly from improved processes at our refineries. There has, however, been an increase in waste due to piping and tank upgrades at retail sites and soil remediation activity at the refineries. In October 2009, we completed our first report under the new National Greenhouse and Energy Reporting Act. Our reported greenhouse gas emissions have increased, predominantly as a result of aligning our established reporting methodologies with the requirements of the new legislation.
In our upstream business we reached agreement with our partners to develop the Jansz-Io field as part of the Gorgon LNG Project. This is an important step forward in adding additional volumes to our existing LNG production. The proposed Browse development achieved a milestone when the Government of Western Australia, Woodside Energy Limited and the Kimberley Land Council reached a Heads of Agreement with in-principle support for an onshore location in the Kimberley region. The Joint Venture is now evaluating this as one of two options for the development of LNG facilities.
In our upstream business we reached agreement with our partners to develop the Jansz-Io field as part of the Gorgon LNG Project. This is an important step forward in adding additional volumes to our existing LNG production. The proposed Browse development achieved a milestone when the Government of Western Australia, Woodside Energy Limited and the Kimberley Land Council reached a Heads of Agreement with in-principle support for an onshore location in the Kimberley region. The Joint Venture is now evaluating this as one of two options for the development of LNG facilities.
In November 2008 we announced the closure of our Homebush solar manufacturing plant with the loss of 198 jobs. This decision clearly had regrettable implications for employees, but BP Solar is now focusing on operations at larger scale plants in lower cost manufacturing countries. Our sales and marketing activities in Australia continue.
Government scrutiny of the petroleum industry continues. In December 2007, the Australian Consumer & Competition Commission was directed to monitor prices, costs and profits relating to the supply of unleaded petrol products for three years. Their 2008 report noted that Australian petrol prices are directly related to international prices and that there is active competition in the retail market.
Finally, another significant milestone was achieved in 2009 with BP celebrating its centenary. I believe that if we are to prosper for another 100 years, then constructive engagement with stakeholders will be one of the key levers. Your feedback on the issues and performance presented in this update is an important part of this process and I believe it will improve our future decision making.
Government scrutiny of the petroleum industry continues. In December 2007, the Australian Consumer & Competition Commission was directed to monitor prices, costs and profits relating to the supply of unleaded petrol products for three years. Their 2008 report noted that Australian petrol prices are directly related to international prices and that there is active competition in the retail market.
Finally, another significant milestone was achieved in 2009 with BP celebrating its centenary. I believe that if we are to prosper for another 100 years, then constructive engagement with stakeholders will be one of the key levers. Your feedback on the issues and performance presented in this update is an important part of this process and I believe it will improve our future decision making.
Gerry Hueston
President – BP Australia
December 2009
President – BP Australia
December 2009
Attestation note
The information on this page has been reviewed by Ernst & Young.
