BP Works Towards Increased Safety

As BP announced its financial results for the third quarter of 2011, group chief executive Bob Dudley has set out details of BP's future direction and strategic priorities, saying the company had reached a clear turning point. Progress made through 2011 in reshaping and focussing the company is creating a stronger and safer BP, able now to deliver both sustainable growth and higher shareholder returns.  

 

Dudley said that the financial picture for BP today is very different from a year ago. "We are today reporting replacement cost profits for the first nine months of this year of USD15.9 billion, compared to a USD9.5 billion loss for the same period in 2010, which was driven by the USD40 billion charges we had taken with respect to Gulf of Mexico spill related costs." The reported replacement cost profit for the third quarter of 2011 was USD5.1 billion.

 

Dudley said that BP will focus its investment on the company's distinctive strengths, where it has proven capabilities and long experience. These include exploration, where the company intends to double its investment; operations in the deep water; the management of giant fields; and building gas value chains. It will also continue to develop its competitively strong downstream businesses. The company will continue to build alliances with major resource holders and apply advanced technologies to its upstream activities.

 

The company will re-invest in quality, higher-growth opportunities, mainly in exploration and production, while divesting low-returning assets.

 

Dudley expects said this sharper focus, together with new projects coming online in both the upstream and downstream and the completion of Gulf of Mexico Trust Fund payments, to significantly boost BP's annual operating cash flow.

 

BP has made, according to him, good progress in embedding enhanced safety and operational risk management throughout the company's operations with the introduction of the new Safety & Operational Risk organisation. He also highlighted the new drilling standards that have been introduced for the Gulf of Mexico and globally, that all operations were under a single Operating Management System, and that most of the 48 major upstream turnarounds were now complete.

 

He expressed that BP was severely tested by the Deepwater Horizon accident. It is now over a year since the well was finally sealed and the company has continued to respond with a sense of corporate responsibility. Dudley said to believe BP is living up to the commitments in the Gulf; learning, applying and sharing the lessons of the accident; restructuring BP and putting safety and risk management at the absolute heart of the operations. During 2011 BP has settled all claims related to the Deepwater Horizon accident with Anadarko and MOEX, its co-owners in the MC252 lease, and with Weatherford and is applying the settlement payments totalling USD5.1 billion to the Gulf of Mexico Trust Fund. BP's payments into the Trust Fund are now expected to be complete by the end of 2012.

 

BP has begun drilling rig operations once more in the US Gulf of Mexico with three deepwater rigs at work on plugging and abandonment activities and last week received approval for the exploration plan for the Kaskida field.