Introduction from the Country President
President’s message
December 2010
The Deepwater Horizon tragedy has cast a shadow over BP and adversely impacted the Gulf of Mexico environment, its communities and businesses. However, we should never forget that this was a human tragedy and I would like to take this opportunity to offer my most sincere condolences to the families and friends of the 11 crew members who lost their lives when the rig exploded.
BP’s response to the incident was immediate. It was, and remains, an immense undertaking and we will do the right thing. We are committed to making good the environment, we will help affected businesses and communities recover from the effects of the spill and we won’t stop until the task has been completed.
It is too early to understand all of the causes and consequences of this tragedy. BP’s internal investigation which was published in September demonstrates the tremendous complexity of the events leading up to the accident and identifies eight key findings on the cause of the incident. The report concludes that no single factor caused the tragedy and multiple parties, including BP, Halliburton and Transocean were involved.
BP’s chief executive Bob Dudley responded by stating that the BP board has accepted all 26 of the recommendations from the report and is now working to determine how best to implement them. Since 20 April, we have incorporated a number of relevant safety assurances involving blow-out preventers, well control, pressure testing for well integrity, emergency systems and cement testing.
We are determined to learn the lessons for the future and will be implementing the recommendations from the report along with a broadscale programme to further improve safety in our operations. We will invest whatever it takes to achieve this and also ensure that all the lessons learned are shared fully throughout the Australian industry.
There is no doubt that the incident caused concern amongst staff, customers and regulators and BP Australia’s leadership was active in providing stakeholders with updates. In addition to the local leadership effort, senior managers who were directly involved in the response effort travelled to Australia to brief policy makers and industry representatives on the response and our investigation into the cause. We remain committed to sharing any lessons learned from the tragedy.
We are determined to learn the lessons for the future and will be implementing the recommendations from the report along with a broadscale programme to further improve safety in our operations. We will invest whatever it takes to achieve this and also ensure that all the lessons learned are shared fully throughout the Australian industry.
There is no doubt that the incident caused concern amongst staff, customers and regulators and BP Australia’s leadership was active in providing stakeholders with updates. In addition to the local leadership effort, senior managers who were directly involved in the response effort travelled to Australia to brief policy makers and industry representatives on the response and our investigation into the cause. We remain committed to sharing any lessons learned from the tragedy.
Despite the uncertainty caused by the incident, BP Australia has performed well and we remain an integral and important part of the BP group. Our capital programmes continue as planned as we pursue growth opportunities in all areas of our business.
In our Exploration and Production business we continue to invest in the North West Shelf Venture’s infrastructure. Looking to the future, we are involved in two Liquified Natural Gas (LNG) projects; the Jansz-Io development which is part of the Gorgon project and the Browse project, both of which are being progressed by their operators.
In the Refining and Marketing sector we are investing in our refineries to reduce risk and improve reliability. We are also investing in new storage and handling facilities including new capacity for bitumen and marine fuel oil in Queensland – to help us support our customers and gain access to growth opportunities.
In our Exploration and Production business we continue to invest in the North West Shelf Venture’s infrastructure. Looking to the future, we are involved in two Liquified Natural Gas (LNG) projects; the Jansz-Io development which is part of the Gorgon project and the Browse project, both of which are being progressed by their operators.
In the Refining and Marketing sector we are investing in our refineries to reduce risk and improve reliability. We are also investing in new storage and handling facilities including new capacity for bitumen and marine fuel oil in Queensland – to help us support our customers and gain access to growth opportunities.
Our strong performance, in the immediate aftermath of the global financial crisis, is a testament to the quality of our people, the robustness of our business model and the resilience of the Australian economy.
I am pleased to be able to inform you that in 2009-10 we managed our operations without a fatality and made improvements against a number of safety indicators. This result is driven by making safe and reliable operations our highest priority. It is a demonstration of the commitment of our employees, even when faced with major distraction, on striving to reduce the risk of our operations and to improve safety.
We have continued our efforts in Australia to raise awareness of the impacts of climate change, and continue to advocate policy that enables markets to function effectively. We believe that policy which stimulates innovation without creating local disadvantage is the best route to developing the low-carbon economy we all want. We believed that the introduction of the Carbon Pollution Reduction Scheme (the CPRS) would have been a positive step in the journey towards a low-carbon economy. The decision to postpone its implementation could, we believe, lead to a delay in achieving meaningful emissions reductions and increase the cost of transition and will prolong investment uncertainty.
I am pleased to be able to inform you that in 2009-10 we managed our operations without a fatality and made improvements against a number of safety indicators. This result is driven by making safe and reliable operations our highest priority. It is a demonstration of the commitment of our employees, even when faced with major distraction, on striving to reduce the risk of our operations and to improve safety.
We have continued our efforts in Australia to raise awareness of the impacts of climate change, and continue to advocate policy that enables markets to function effectively. We believe that policy which stimulates innovation without creating local disadvantage is the best route to developing the low-carbon economy we all want. We believed that the introduction of the Carbon Pollution Reduction Scheme (the CPRS) would have been a positive step in the journey towards a low-carbon economy. The decision to postpone its implementation could, we believe, lead to a delay in achieving meaningful emissions reductions and increase the cost of transition and will prolong investment uncertainty.
We have also contributed to policy debate in the area of energy policy and fiscal reform. Our submission to the Federal Government’s Energy White Paper process focused on four key areas: the challenge of Asian growth; the need to address domestic energy security; the need to address climate change; and the role of competition policy and Australia’s long-term growth rate. It is our contention that these factors are inter-related and of equal importance as we face the challenge of seizing the opportunities offered by Asian growth while continuing to enhance domestic energy security.
We also made a submission to the Federal Government’s review of taxation (The Henry Report). The report offered a blueprint of how the tax system could be developed over the medium to long-term. BP’s input was to recommend that the Government move to a cash flow basis for taxation over time for income tax and, as an interim step, introduce accelerated tax depreciation for gas plants. Current write off rates for gas plants are slow when compared internationally.
Over the years, I believe we in BP Australia have gained a reputation for the positive manner in which we manage the impacts of our business on the society and environments in which we operate. Clearly, events in the Gulf of Mexico have affected this reputation. Nevertheless, I believe this report provides an opportunity to re-engage with stakeholders and take some first steps in the process of rebuilding our reputation.
We welcome your scrutiny of this report. It will contribute to the ability of each part of our business to ensure that the choices we make contribute to making BP a sustainable business
We also made a submission to the Federal Government’s review of taxation (The Henry Report). The report offered a blueprint of how the tax system could be developed over the medium to long-term. BP’s input was to recommend that the Government move to a cash flow basis for taxation over time for income tax and, as an interim step, introduce accelerated tax depreciation for gas plants. Current write off rates for gas plants are slow when compared internationally.
Over the years, I believe we in BP Australia have gained a reputation for the positive manner in which we manage the impacts of our business on the society and environments in which we operate. Clearly, events in the Gulf of Mexico have affected this reputation. Nevertheless, I believe this report provides an opportunity to re-engage with stakeholders and take some first steps in the process of rebuilding our reputation.
We welcome your scrutiny of this report. It will contribute to the ability of each part of our business to ensure that the choices we make contribute to making BP a sustainable business
Attestation note
