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BPMAGAZINETHE INTERNATIONAL MAGAZINE OF THE BP GROUP ISSUE 3 2011

THE GLOBALSTANDARDBP Magazine reports on the company’s new globalwells organisation tasked with standardising theway its upstream business operates.

28 SPOTLIGHT: GLOBAL WELLS ORGANISATION

20 ACADEMICALLIANCESBP’s universitypartnerships

48 VENTURINGFORTH Investing ininnovation

54 GULF UPDATEEarly restorationin the US

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BP MAGAZINEThe international magazine of the BP Group – ISSUE 3 2011

BP Magazine is published quarterly for external readers around theworld, as well as past and present BP employees. Its content does notnecessarily reflect official company views.

The copyright for photographs and illustrations in BP Magazine is notalways owned by BP. Please contact BP Photographic Services for details.

managing editorDavid [email protected]

editorLisa [email protected]

distributionCarolyn Copland+44 (0) 20 7496 4340

designPhil Steed – Steed [email protected]

print managementWilliams Lea

image contributorsBP ImageshopAction Images

Welcome. Physicist Albert Einstein once said,“The important thing is not to stop questioning.”It is a philosophy that could easily be applied toBP’s upstream Developments division, whosehead, Bernard Looney, is currently visitingdrilling rigs around the world to find out what ison people’s minds and to see the operations forhimself. He talks to BP Magazine on page 6 aboutcreating an environment of continual enquiryand learning. On page 28, we find out how this isbeing put into practice with the creation of anew global wells organisation, which has beenset up to develop a set of standard processes andprocedures for drilling wells. Inquiring mindsare also on display on page 20, where we meetsome of the BP people working closely withacademia in internationally-renowneduniversities to tackle some of our biggest energychallenges. We also take a look at the role BP’sIntegrated Supply & Trading organisation playson page 42; find out more about the $1 billioninvestment programme to rebuild parts of TexasCity refinery on page 14; and meet WilliamSharman – another BP-supported athletepreparing for London 2012, on page 60. Lisa Davison> Editor

contents / issue 3 2011

© BP p.l.c., 2011

+ Features

06 In development BP’s head of Developments, Bernard Looney,talks about the hard work going on in his division to create anenvironment of constant enquiry and learning. By Lisa DavisonPhotography by Marcus Almeida Knoedt / BP Imageshop

14 Major turnaround The $1 billion investment programmethat has turned Texas City into a ‘new’ refinery. By Joe StrebelPhotography by Joshua Drake

20 Team effort Over the years, BP has developed a series ofconnections with universities around the globe that are providing new ideas on how to tackle energy challenges. By Jaclyn ClarabutPhotography by Marc Morrison

Cover story

28 Well placed The creation of a new global wells organisationis just one of the changes that BP is making to the way it runs itsupstream business, with the aim of driving a standard approachinto everything it does. By Nic Welsh Photography by Marcus Almeida Knoedt & BP Imageshop

32 Tourist season Building on its commitments to the GulfCoast, BP has provided funds to help boost tourism. And with the2011 season underway, the results are starting to show. By Ray Viator Photography by Marc Morrison

42 Double figures BP’s Integrated Supply & Trading organisationis celebrating its 10th anniversary, marking a decade as the company’ssingle face to the external market. By Lisa DavisonPhotography by Stuart Conway/Graham Trott/Marc Morrison/Joseph Lynch

48 Nothing ventured How corporate venturing is helping BPtackle issues such as greenhouse gas emissions and energy security.By Nick Reed Photography by Simon Kreitem

54 Restoration work The next stage of BP’s efforts to restore theGulf of Mexico is getting underway, following an agreement betweenthe company and 16 US government agencies. By Ray Viator Photography by Marc Morrison

60 Track and field British Olympic hopeful William Sharmantalks about why the Cultural Olympiad is so important, competing infront of a crowd and having other sports professionals in the family.By Amanda Breen Photography by Action Images & Richard Davies

+ Regulars

04 For the record A snapshot of BP news and statistics fromaround the world.

19 The Big Issue BP’s chief counsel discusses the implications of theUK’s new Bribery Act Illustration by David Lyttleton

40 Viewpoint Paralympian Shelly Woods models for aspiringartists at London’s National Portrait Gallery. Photography by Jon Challicom

47 BP Faces Sharon Rynders talks about her role as commercialmanager and relationship manager for the Energy BiosciencesInstitute. By Jaclyn Clarabut Photography by Marc Morrison

66 Archive Marking the 60th anniversary of the evacuation of stafffrom the Abadan refinery, in Iran. Photography by the BP Archive

70 Parting shot: sculpture celebrates 150 years of theMassachusetts Institute of Technology. Photography by Marc Morrison

Cover image: workers at the Khazzan 5 exploration well works.The Khazzan tight gas field is located in central Oman, around400 kilometres (250 miles) southwest of the capital of Muscat.


66

20 Livinglaboratory: BP’suniversity partnerships,such as the one at theUniversity of Illinois withits 320-acre energy farm(pictured), are helping BPtackle energy challengesof today and tomorrow.

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UK

US

Belgium

Angola

New Zealand

Russia

Trinidad &Tobago

Norway

UK

US

Belgium

Angola

New Zealand

Russia

Trinidad &Tobago

Norway

For the recordHighlights from around the globe > Autumn 2011

the quarter in numbers

31 The number of new blocks around the world to which BP has gainedaccess in the past year.

45The area, in squarekilometres, of the Valhallfield in Norway, that iscovered in seismic cables.The cables supplyimportant data that helpsBP understand how thereservoir is behaving.

100The number of real-lifedriving situations filmed tocreate eDrive – a computerapplication on sale at BPretail sites in New Zealandto raise motoring safetyawareness.

130,000The number of barrels ofoil per day that the newSchiehallion FPSO will beable to process and exportwhen production begins in 2016.

Announcing its second-quarter results, in July, BPtold investors that it expectsfuture cash flows generatedby its worldwide operationsto grow faster than output.This growth is expected inboth the upstream anddownstream businesses, asthe company delivers its

strategic priorities, increasesinvestment in future growthopportunities, and portfoliowork continues. BP reportedunderlying replacementcost profit of $5.6 billion forthe second quarter of 2011,an increase of 13% on thesame time last year. “BP ismaking rapid progress

Global: Second-quarter results

04 Issue 3 2011 BP MAGAZINE

against our priorities,” BPchief executive Bob Dudleysaid in July. “In February, wesaid we expected 2011 to bea year of consolidation, aswe reset the focus of thecompany. This is going well,while it is having theexpected near-term impacton our volumes and costs.”

Growth opportunities: theWeatherford rig 841 at thegiant Rumaila field in Iraq.

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BP MAGAZINE Issue 3 2011 05

US GoM settlementBP has reached agreementwith Weatherford US tosettle potential claimsbetween the companiesrelated to the DeepwaterHorizon accident in theGulf of Mexico. BP andWeatherford have agreed tomutual releases ofpotential claims againsteach other, and BP hasagreed to indemnifyWeatherford forcompensatory claimsresulting from the accident, including claimsbrought relating topollution damagestemming from theaccident. BP’s indemnityexcludes civil, criminal oradministrative fines andpenalties, claims forpunitive damages, andcertain other claims. Theagreement is not anadmission of liability byany party regarding theaccident.

RussiaCultural partnershipBP is to support MariinskyTheatre opera, ballet andorchestra tours in the UKover the next three years.The renowned St Petersburg opera andballet company will make aseries of trips to the UKuntil 2013 to perform at avariety of events, includingthe Mariinsky Balletresidency at the RoyalOpera House, London, inJuly/August 2011, andopera/orchestra tours toCardiff, London andBirmingham in 2012.Additional plans are beingdeveloped and will beconfirmed for 2012 and 2013.

UKRedevelopment plansAn agreement between BPand its co-venturers will seea major redevelopment ofthe Schiehallion and Loyaloilfields, located to the westof the Shetland Islands. Thetwo fields have producedalmost 400 million barrelsof oil since productionbegan in 1998, and anestimated 450 millionbarrels of resource is stillavailable. The investmentof around $5 billion willtake production out to2035, and possibly beyond.

BelgiumProduction approvalBP has entered intoagreements with JBF RAKLLC under which JBF willbuild a new 390,000 tonne-per-year polyethyleneterephthalate (PET)production unit in Geel,Belgium, subject torequired approvals. Theagreements give JBF theright to build and operatethe PET unit on BP’sexisting petrochemicalscomplex in Geel, adjacentto BP’s purified terephthalicacid (PTA) facility. BP will,in return, supply PTAdirectly to this new PET

manufacturing unit. Start-up of the unit is scheduledfor 2014.

AngolaParalympic supportBP Angola is to support theAngolan Paralympic teamon its journey to London2012, following anagreement with theAngolan ParalympicsCommittee. Under theagreement, BP will be theexclusive oil and gaspartner of the committeeand the official carbonoffset partner, via its TargetNeutral programme.

Trinidad and Tobago New access BP has been awarded twodeepwater exploration andproduction blocks inTrinidad and Tobago. Thecompany will have a 100%interest in Blocks 23(a) andTTDAA 14, both located indeepwater offshore eastcoast of Trinidad. Thesuccess follows detailedsubsurface research andevaluation by BP, whoseTrinidad operationsaccount for more than halfof Trinidad and Tobago’snatural gas output and12% of BP’s global oil and

gas production. The awardswill double the acreageheld by BP-controlledcompanies in Trinidad and Tobago.

USWind agreement BP Wind Energy hasentered into two long-termpower purchaseagreements (PPAs),totalling 105 megawatts(MW), from its proposedMehoopany wind farm inWyoming County,Pennsylvania. One PPA isfor 75MW with OldDominion ElectricCooperative, and a secondwith Southern MarylandElectric Cooperative Inc for30MW. The Mehoopanywind farm is expected togenerate up to 144MW of energy.

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Report> Lisa DavisonPhotography> Marcus Almeida Knoedt/ BP Imageshop


➔ upstream

Developments>Interview with Bernard Looney

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Since becoming executive vice president for BP’s newDevelopments division, Bernard Looney has spent much of histime visiting the company’s drilling teams around the world,to hear what is on people’s minds and inspect operations forhimself. As he explains to BP Magazine, it’s all part of his driveto create an environment of constant enquiry and learning.

In conversation:Bernard Looney talks to

members of staff onthe drilling floor, during

a visit to the DeepOcean Clarion rig inBrazil, August 2011.

COLLABORATIVEAPPROACH


Developments> Interview with Bernard Looney

We had a teacherat school who used to say that asking aquestion was the quickest way to learn. Butit would only really work if you wereprepared to truly listen to the answer.”

So recalls Bernard Looney, BP’s executivevice president of Developments – one ofthe three new upstream divisions createdby the company in November 2010. It’s alesson that has an acute bearing on what heconsiders the single most importantelement of his job – to create anenvironment that encourages constantenquiry and learning.

This is not surprising, given that Looneyis now responsible for the part of thebusiness in which last year’s tragic accidentin the Gulf of Mexico (GoM) occurred. Toshow he takes this responsibility seriously,Looney has spent much of 2011 visitingteams and carrying out inspections atoperating sites around the world.

“I wanted to listen to what is on people’sminds, to get a sense of how people arefeeling in the organisation, and understandwhat will help people do their jobs as wellas possible,” he says. “I also wanted toinspect the operations, to see for myself,

because how do I really know from myoffice in London?”

The question ‘how do you know?’ is onethat Looney believes every member of histeam should be asking all the time, when itcomes to safety and risk management.Many of the enhanced processes andsystems that are being put in place withinDevelopments have been created to helpprovide such assurance. By getting outonsite, Looney himself is demonstrating it’sokay to ask questions and that to do so canonly have a positive impact on the business.

What Looney has seen as he travelsaround BP’s operations has given him realconfidence, describing the teams he meetsas “amazing people doing extraordinarythings.” One of his big priorities is to ensurethat BP has the right skills in place over thelong term. “We’re going to hire around2,000 new people across upstream this yearand in Developments, we are recruitingspecialists with a range of capabilities. Mostimportantly, however, we need to makesure the 19,000 people who already workfor us have what they need to do their jobssafely and effectively and feel that we’resupporting them. We’re putting a lot of

“I wanted to listen to whatis on people’s minds andunderstand what will helppeople do their jobs as wellas possible. I also wanted toinspect the operations, tosee for myself, becausehow do I really know frommy office in London?”


“


work into understanding their careeraspirations and developing 10-year careerroad maps to help them reach their goals.”

As a driller by background and formerhead of BP’s North Sea business, Looneyknows the challenges that face his divisionand takes the responsibility of leading itvery personally. “I spent four months inHouston last year working with ourresponse teams, and I would say that havingbeen through such an experience has leftme with a very real emotional connectionto the journey we are undertaking. Thewhole team has a deep commitment tonever experiencing something like thatagain in our careers or our lives. So, first andforemost, my job is to make sure that ourwells and projects are built safely,” he says.

To do that, Looney is overseeing anumber of significant structural changes,including the way that wells are drilled forBP. For the past two decades, BP’s upstreambusiness has been organised on a regionalbasis, meaning that within an overallmanagement system, different localorganisations created their own systemsand processes for designing, constructingand managing wells. That, says Looney, has

been changed with the creation of theglobal wells organisation.

“Now, all our drilling and wells activity inthe world is conducted through one singleorganisation,” he explains. “We have a singlehead of the global wells organisation –Richard Lynch – who is there to drivestandardisation and compliance with ourstandards and procedures into everythingwe do. That is what we believe will make afundamental difference.”

In 2010, BP also created a centraldevelopments organisation, followingsuccess in driving consistency andstandardisation into the construction offacilities in regions, such as Trinidad andAzerbaijan. The decision was taken at theend of last year to expand the concept,creating the global projects organisation –led by Neil Shaw.

“This has changed the way BP’s majorprojects are delivered,” says Looney,“allowing the global projects organisationto implement a standard approach tocontract procurement, risk management,inspection and review, as well as creatingnew standard metrics to measure success.The global projects team is developing a

single local Operating Management System(LOMS), something the global wellsorganisation will emulate.

“OMS is a structure that works well,” hecontinues, “and will help us be moresystematic in the way we learn andimprove. We don’t want to just fix thingsonce. We want to be able to share acrossregions and projects. The whole principle isthat we improve every year, and that thoseimprovements sustain for decades.”

The benefits of this more centralisedapproach are already starting to show up inspecific projects. Over the next few years, BPexpects to install around 300 subsea‘Christmas trees’ – pieces of equipment thatare attached to the tops of wells to controlthe flow of hydrocarbons – in its operationsaround the world. It’s a huge piece of workand the first time that the global subseahardware team will be responsible forworldwide delivery of subsea equipment tothe project teams in each region. “I think thisis quite different for the industry and webelieve it’s going to mean significantstandardisation of processes across ourglobal operations. This will change thegame,” says Looney. »


Global perspective: remotely operatedvehicle controllers on the Deep OceanClarion rig in Brazil (opposite); a drilling rigon the North Slope of Alaska (left); at workon the Central Azeri rig in Azerbaijan (belowleft) and Bernard Looney in conversationwith staff onboard the Clarion (below).



Operating essentials: workerinspects risers onboard the DeepOcean Clarion, Brazil (opposite);Above, construction workers on theNorth Slope in Alaska. Below, adrilling rig at the Khazzan onshorefield in Oman.




Another area of significantimprovement is expected to come fromimplementation of the recommendationscontained in BP’s report into the DeepwaterHorizon accident. Published in 2010, thereport made 26 recommendations designedto help prevent an accident such as the Gulfof Mexico tragedy from occurring again.The recommendations relate to the work ofthe Developments division, and Looney hasultimate responsibility for ensuring theyare implemented. With 185 specific actionsand more than 700 milestones to meet, it’s abig task. So where do you start?

“You have to start with getting the rightteam in place,” he says. “Then, it’s aboutagreeing a plan and making sure we are allcrystal clear on the expected outcome. Sothat when the recommendation says ‘wemust do x’, we all actually understand whatx means and what actions need to be takento ensure that we’ve done what wasrecommended.”

BP’s newly-created safety andoperational risk (S&OR) team plays a keyrole in all this, helping the Developmentsdivision create standards of work, writeprotocols and eventually carry out auditsas it completes each action. The idea is thatif accountability for the standards lies withS&OR, then any decisions to allowdeviation can be taken by someone with anexclusive S&OR lens. “I think that’shealthy,” says Looney. “It ensures thatpeople making the final decisions are inthe best, and most informed, position.”

Looney’s top priority is to deliver safeand compliant wells, as well as safe designand quality-build projects. Clearly, well

“Implementing BP’sinternal reportrecommendations andcreating the global wellsorganisation are bothcrucial in mitigating thatrisk, but if the GoMaccident proved anything,it’s that we must beprepared with theappropriate equipmentand resources to respondquickly should anotherincident occur.”

control remains one of the division’s keyrisks. “Implementing BP’s internal reportrecommendations and creating the globalwells organisation are both crucial inmitigating that risk, but if the GoMaccident proved anything, it’s that we mustbe prepared with the appropriateequipment and resources to respondquickly should another incident occur.”

This is where BP’s new global responseteam comes in. Led by Richard Morrisonand reporting jointly to Looney and LamarMcKay, head of BP America, the team hasspent much of the past year travelling tomore than 20 countries to share the lessonslearned on relief well drilling, spill responseand how to manage thousands of potentialresponders.

The aim is to ensure that BP’s businessesaround the globe are even better equippedand ready to handle a worst-case scenario.Many have already begun turning thoselessons into physical action, transformingtheir ability to respond to a crisis. InAngola, for instance, agreements have beenexecuted ensuring access to vitalequipment and a full-scale capping stackhas been built and deployed in preparationfor drilling.

Meanwhile, a package of response toolshas been constructed and is now housed inHouston in climate-controlled facilities tomaintain the equipment’s integrity, withplans in place so that it can be deployedanywhere in the world within 72 hours.“We have contracts in place to make thathappen and we have others in the industrycoming to us asking for the specificationsso that they can do the same,” says Looney.

Offshore life: worker on thecommand bridge of the DeepOcean Clarion, Brazil (right).

Opposite page, BP’s Central Azeriplatform in Azerbaijan; the drill

bit on the Development Driller III,Gulf of Mexico; Bernard Looney

arrives on the helipad of the Deep Ocean Clarion.



BP has also been sharing its lessonslearned with governments around theworld in order to help make drilling safer.In May 2010, the Brazilian regulator –National Agency of Petroleum (ANP) –approved a deal between BP and DevonEnergy that will see BP move into eight ofthe country’s deepwater blocks. At thetime, ANP general director Harold Limasaid that “BP had proved itself to be one ofthe best-prepared companies today inoperational safety in deep waters.”

The Brazilian government’s vote ofsupport is key for a company that hadmade it clear that its future still lies in thedeepwater. As well as Brazil, BP hasannounced new deals in Australia, theSouth China Sea and India, all of themlocated in deep water. Meanwhile, it hasbegun drilling in both Brazil and Angola,and will drill a deepwater well in the UKnext year. BP is also in discussions with theUS government to demonstrate itscontinuing commitment to meeting all ofthe government’s requirements in order toget back to work. The Gulf of Mexicoremains a critical part of BP’s business.

In deep water or elsewhere, projectssuch as these send a strong signal that BP isdetermined to keep its promises, deliveringsafe, reliable operations that addshareholder value. “We will operate safelyand deliver on expectations,” says Looney.“We have wells we need to drill, andprojects to bring onstream and run reliably.History has taught us that those two thingsgo hand in hand – operate safely and wewill deliver good results for ourshareholders.” ■

“We will operate safely and deliver onexpectations. We have wells we need todrill, and projects to bring onstreamand run reliably. History has taught usthat those two things go hand in hand –operate safely and we will deliver goodresults for our shareholders.”

The role of the division:The Developments division is oftendescribed as the ‘construction arm’ ofthe upstream business and isresponsible for most of BP’s capitalinvestment. Once the Explorationteam has decided which sedimentarybasins BP is going to explore in,Developments – through the globalwells organisation – will provide theservices to drill an exploration well.If a discovery is made, the globalprojects organisation beginsconstruction work on the necessaryequipment, such as platforms andflowlines. Production wells will alsobe drilled by the global wellsorganisation. Once constructed, thewhole project is handed over to theProduction division.



Report> Joe StrebelPhotography> Joshua Drake


➔ refining and marketing Texas City> Safety focus

A FRESH OUTLOOKHow a $1 billion investment programme anda lot of hard work from staff is breathingnew life into BP’s Texas City refinery site.



New horizons: Mitchell Elgin, an operator on thefluid catalytic converter unit three, looks out over

Texas City’s east plant (main image). Inset fromtop: an operator inspects the steam system; a

process control technician ensures mechanicalintegrity at the distillate desulfurisation unit; and

the west plant aromatics unit two.



The phrase ‘turnaround’is a common one inbusiness, usually used todenote a reversal offortunes for the better.In the oil industry, it hasa very specific meaning,

describing a period of necessarymaintenance. Both descriptions apply to BP’sTexas City refinery, where its workers havehelped transform the way the site operates.

It’s been a tough few years for therefinery. In March 2005, tragedy struckwhen an explosion killed 15 people and leftmany others injured. It also destroyed amajor processing unit, resulting in millionsof dollars of damage. Later that same year,the arrival of Hurricane Rita forced therefinery to shut down as a precautionarymeasure, leaving it with difficulties duringthe subsequent restart.

Despite this, the refinery’s leadershipteam decided to take the opportunity to plota fresh course, embarking on a five-yearinvestment programme, totalling more than$1 billion. The project involved replacingand rebuilding equipment, improvingoperational efficiency, and strengtheningstaff training. The goal was to return to fulloperations, with greatly improved safetyand efficiency at the heart of the project.

The result has been remarkable, withsignificant improvements in safety,operations and finances, all while underthe most intense scrutiny. So, it wassomething of a surprise when BPannounced in February this year that it wasputting the refinery up for sale, along withits southern west coast US assets, whichinclude Carson refinery in California.

Although unexpected, theannouncement was a strategic one, saysRefining & Marketing chief executive IainConn, and not a reaction to the DeepwaterHorizon incident in the Gulf of Mexico.“We have been looking at every one of BP’spositions since 2009, and decided that wewant to invest in positions where refiningand marketing are integrated, flexible inthe feedstock they can run, and optimisedto turn them into high-value products.Texas City is not strongly integrated withBP’s marketing assets and we would need toincrease the footprint around it to improvelogistical issues.”

Nevertheless, there is no doubt in Conn’smind about the quality of Texas City as anasset for a new owner. “I am very proud ofthe team at Texas City and what they haveachieved as they faced the challenges of thepast four years. The refinery is also one of

Texas City> Safety Focus

work we do in normal turnarounds willcomplete the renewed refinery, buthardware improvements are only part ofthe ongoing changes,” he adds.

Texas City refinery has alsoimplemented BP’s Operating ManagementSystem (OMS), which, among othercomponents, identifies best operatingpractices and codifies them as the standardprocedures for operations.

Casey sees the results in both staffattitudes and operational performance. “At past employee meetings, I frequentlyfielded questions on whether the refinerywould survive. Today, I don’t get thosekinds of questions,” he says. “And incontrast to our experience with HurricaneRita in 2005, we successfully recoveredfrom Hurricane Ike in 2008 and, this year,managed a local area power outage withminimal operational disruptions.”

While equipment and systems are onepart of the renovation process, the refineryhas also improved its training of staff.People working at the refinery haveaveraged a cumulative 70 days of trainingto improve workplace safety and enhancecompetency. “We continue to look forward,even in developing our future workforce,”says Casey. “We have partnered with theUnited Steelworkers and the localcommunity College of the Mainland to

the largest and most capable ever built.Assets like Texas City rarely come to market.These are strategic decisions and not to dowith worries about its history,” he says.

History is something Texas City has inabundance. For more than three quarters of acentury, the refinery has supplied much-needed fuel to the US population. Today, it isthe third-largest refinery in the US, andhome to 2,000 employees, and up to 5,000daily contractors. It has the capacity to refine475,000 barrels of oil every day and canprocess 3% of the nation’s gasoline supply –enough to fill seven cars every second.

In many ways, the investmentprogramme of the past five years has turnedTexas City into a new refinery. Its scale is allthe more impressive given that much of itwas conducted while maintaining safe andreliable daily operations. “We were takingassets out of service for rebuilding sectionsthat were equal in size to the average USrefinery,” says Keith Casey, who became theTexas City business unit leader in 2007.“Over the five-year period, our Texas Cityteam and contractors were dedicated torebuilding the third-largest refinery in theUS. We are now set as a reliable andcompliant operation, with constantimprovements in safety and people, andassets that make this refinery an excitingprospect for a new owner.”

The refinery’s location on the Gulf ofMexico coast is another benefit, allowing itto bring in crude oil from multiple sourcesand transport refined products to a varietyof markets globally. In addition, therebuilding project has expanded thefacility’s flexibility to process almost anytype of crude oil into a full slate of fuelsand other products.

At the start of the rebuild, the leadershipteam decided to renovate the refinery’s 43 kilometre (27-mile) steam system,followed by a series of modernisations ofthe facility’s critical units, as well asoverhauling 100 major pieces of rotatingequipment and more than 1,000 pumps,turbines and compressors. In addition, twounits that did not fit Texas City’s strategicfuture were taken out of service. In all, thephysical rebuild programme, completed in2009, required more than 75 millionworker hours.

“Our completion of the projectscoincided with the beginning of a normalturnaround cycle, based on a five- or six-year schedule,” says Casey. Six unitssuccessfully completed turnarounds in2011 and several more are scheduled forcompletion by 2013. “The maintenance


develop a process technology degreeprogramme to train unit operators,” heexplains. “After successfully completing thetwo-year course, graduates are qualified tobegin work as apprentice operators.”

And while the refinery has madeextensive internal changes, it has continuedto make significant contributions beyondits gates in the local community.

The investments made since 2005 havebrought jobs and economic activity to thearea, says Don Gartman, president andchief executive of the Galveston CountyEconomic Alliance and Galveston CountyEconomic Alliance Foundation. “As thelargest private sector employer inGalveston County, BP in Texas City is avital economic engine for ourcommunities, providing good-paying jobsfor generations of area residents and spin-off benefits to county residents.”

This economic impact ranges from localrestaurants and catering businesses thatexperience a surge in demand for meals, to

construction crews, area welding shops,trucking firms, metal fabricators and othersmall businesses.

Texas City Mayor Matt Doyle lists aseries of projects where BP, through therefinery, has lent support. These includecommunity centres and a multi-use youthsports complex. “BP volunteers, along withfinancial support, have also helped usdevelop the 160 hectare (400-acre) CentralPark, which will provide a beautiful andsafe place for citizens to enjoy nature,” says Doyle.

While financial contributions andvolunteer participation in communityprojects are appreciated, communityleaders cite the active participation ofTexas City employees in day-to-daycommunity work as equally valuable.

“What’s impressive is the amazingdepth of talent that BP employees bring tothe community,” says Shawn Bailey,chairman of the Texas City-La MarqueChamber of Commerce. “In addition to the


“Over the five-year period, our Texas City team andcontractors were dedicated to rebuilding the third-largest refinery in the US. We are now set as a reliableand compliant operation, with constant improvementsin safety and people, and assets that make thisrefinery an exciting prospect for a new owner.”Keith Casey

Close inspection: turnaroundsassure process and mechanicalintegrity at Texs City (left);operators work together tofulfill procedures at thearomatics unit two.

two BP representatives on our board ofdirectors, we have citizens who work for BPon most of our city committees.”

One such employee has, in fact, beennamed Volunteer of the Year by theChamber in January 2011. John Amato is aprocess safety management coordinator atTexas City and a representative of refineryemployee commitments to the community,and was given the honour for hiscommitment to a range of organisationsand causes.

The five-year recovery and rebuildproject, enhanced employee trainingprogrammes, and a history of strongcommunity support are strong assets,adding to the strategic business location ofthe plant.

BP hopes to sell the refinery by the end of2012, subject to the necessary approvals, butuntil that happens, says Conn, thecompany’s commitment remains steadfast.“I’ve been very clear that they will not see adifference to the commitment to the assetsor the people while they are still a part of BP.”

And according to Mayor Doyle, BP hasmade a difference in the region. “I truly hopethat the new owner, as well as all industryplayers, will maintain the standards that BPhas set for refinery operations, corporateand, equally important, individualparticipation in our community.”



Team effort: Texas Cityemployees collaborate at thefluid catalytic converter unitthree (above); and a view ofTexas City’s complex steamsystem and east plant units.

Texas City> Safety Focus

TEXAS CITY REFINERYThe facility began operating in 1934 on a 485-hectare(1,200-acre) site on the Houston Ship Channel, around 50 kilometre (30 miles) south of Houston. In the yearssince, Texas City has grown to become the third-largestrefinery in the US.

The major rebuilding programme completed in 2010caps eight decades of changes, expansions and processimprovements at the refinery. These include inaugurationin 1940 of the first commercial hydroforming unit thatboosted yields of gasoline and other products. Althoughthe refinery processed only domestic crude oil until 1972, amassive conversion permitted it to run more than half ofimported feedstock by 1980. Other investments haveenabled the facility to produce upgraded gasoline blendsand low-sulfur diesel fuels.

The BP Texas City refinery employs more than 2,000full-time workers, supplemented by up to 5,000 contractemployees. With the capacity to process 475,000 bpd, thesite can produce more than 7 billion gallons of productsannually. The refinery supplies 3% of the entire USgasoline supply. ■


UK BRIBERY ACT: GOOD GOVERNANCE = GOOD BUSINESS On 1 July 2011, the UK government’s new Bribery Act came into effect,overhauling existing laws that date back as far as 1889. The Act creates anew corporate offence of failure to prevent bribery, either within a companyor by its associated third parties. BP’s group general counsel, Rupert Bondy,discusses the implications for BP.

The UK government has said it wants the country to take aleading role in the global fight against bribery. Certainly,its new Bribery Act is the most significant piece of

legislation on the subject to come out of the UK in decades. BP is determined to act in accordance with the highest standards

of ethical conduct and, for many years, we have taken a strong standagainst any form of bribery or corruption. In February 2002, forinstance, we banned all facilitation payments – small sums paid topublic officials to encourage them to provide goods and non-discretionary services to which you are entitled – and our Code ofConduct lays out simple rules by which we expect all our employeesto abide. We also adhere to the US Foreign Corrupt Practices Act.

But while the Bribery Act does not represent a sea change inthe way we do things in BP, it does highlight the need for constantreview of our anti-bribery compliance programme, and tocontinuously monitor its implementation. This newlegislation has thrown a spotlight on two key areas:corporate hospitality and third-party activity.

Relationship buildingMany organisations use corporate hospitality as a legitimateway to build and strengthen relationships with keycustomers, business partners and public officials, and BP is nodifferent. As a major sponsor of next year’s Olympic Games,we will, of course, take the opportunity to promote BP’sproducts, technologies and capabilities. It is also an opportunityto recognise and reward our employees, but we have to beabsolutely clear that this should never be used with theintent or expectation of business advantage in return, or eventhe appearance of it. We must be clear in our own minds thatwe are using this tool for legitimate relationship building, notto try and win specific business. To do that, we have very clearguidelines and structured processes that are all auditable,reviewed by external counsel and benchmarked against othersponsors. Forms must be filled in and the appropriateapprovals sought. With all eyes on the London Olympics, wehave taken our existing policies and procedures andcustomised them specifically for the event.

The second area of focus lies in our work with third-partysuppliers, contractors and, increasingly, joint ventures. For along time, BP has understood that it is not just the activities ofour employees that matter. I believe there is a growingunderstanding among our suppliers and joint venturepartners that we only want to work with those organisationswhose ethical commitments are of the highest standard.This is an ongoing challenge and we’ve tried to make it easierfor our employees to explain our policies and procedures in away that does not feel personal. For instance, in our shippingbusiness, we provide ship masters with BP-branded laminatedcards that explain it is the company’s policy not to pay bribes orfacilitation payments. But, like corporate hospitality, this new

legislation makes it crucial that we re-evaluate our own policiesto ensure that they are of the highest standard. As a consequence,we have a very specific project underway to look more carefullyat how we can influence non-BP-operated joint ventures, so thatthey follow principles that are aligned with our Code of Conduct.

We fully subscribe to the idea that corruption damageseconomies and communities, and BP is committed to theprinciples of good corporate governance. We were early torecognise the growing expectations of society and our differentstakeholders, and we pride ourselves on going beyond minimalcompliance with the law and acting as a responsible corporatecitizen – our employees expect no less of us. New legislationreinforces the need for constant vigilance, but, in the end, goodcorporate governance makes good business sense. ■

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Report> Jaclyn ClarabutPhotography> Marc Morrison


➔ technolog y Research> University partnerships

LEADING THE FIELD

BP has connections with internationallyrenowned universities across the globe, linkingthe oil company to fresh thinking on tacklingthe energy challenges of today – and tomorrow.



Field work: University of IllinoisPhD graduate student AndyWycislo (seated) gathers andtakes notes on samples ofMiscanthus – a species of tallgrass that can quickly grow tomore than three metres (10 feet)high in densely packed fields.The grass is grown at theUniversity of Illinois’s 130-hectare (320-acre) energy farmfor further laboratory testing inorder to explore its potential asan advanced biofuel.



Listening to far-reaching views is becomingmore important, as BP seeks ways to helpmeet the growing demand for energy, whilealso developing and delivering energy insocially, economically and environmentallyresponsible ways. BP’s head of research andtechnology, David Eyton, says: “What’sgreat about these relationships is the abilityto access scientific reasoning and ideas, andapply these to existing and potentialindustry challenges.”

BP has relationship managers who lookafter each university partnership, withmany embedded on campus, wherenecessary. Cockerill both directs BP’suniversity programme and is relationshipmanager, and resident, at the MIT. He likensBP’s ties with universities to a marriage,with the relationship manager acting asmarriage guidance counsellor between BP’sbusiness viewpoint and academicendeavour. He says, “With a marriage, you

Every day is a school day for BP. From Berkeley to Beijing, the company isengaging with distinguished academics at top universities on topics of globalimportance, from how to meet growing demand for energy to developing thefuels of the future. “No one group has the lock on brain power, we recognisethat,” says BP’s director of university relationships, Andrew Cockerill, wholeads the company’s engagement programme. With relationships that spanthe globe, from the University of California, Berkeley, to Tsinghua Universityin Beijing, China, and including such intellectual powerhouses as theUniversity of Cambridge, Imperial College London and the MassachusettsInstitute of Technology (MIT), “there’s a wealth of talent and forward thinkingin the energy world, and we want to hear those voices,” says Cockerill.

»

have to keep communicating to make sureyou’re both on the right path.” And with therelationship managers based onsite, he says,“You get the day-to-day contact neededthrough shaking hands and sharing a cup of coffee.”

While BP has relationships withindividual institutions, it also has projectsthat allow it to unite a number ofuniversities together in wider collaborations.

The Energy Biosciences Institute (EBI)was set up in 2007, with $500 million in BPfunding to be committed over 10 years. Itbrings together two world-class USuniversities, a national laboratory and BP asa multinational company, all working side-by-side in purpose-built laboratories. InBerkeley, there is the University ofCalifornia (UC Berkeley) and the LawrenceBerkeley National Laboratory. Meanwhile,3,200 kilometres (2,000 miles) away isUrbana-Champaign, home to the



Technology>University partnerships

Relationship manager: BP’s director of universityrelationships, Andrew Cockerill(opposite) in front of the Ray andMaria Stata Center for computer,information and intelligencesciences at the MIT campus. Mainimage, technician at the EBI useselectric charges to visualise andisolate fragments of MiscanthusDNA. Ethidium bromide is addedto the DNA, causing it tofluoresce under ultraviolet light.



By basing itself on campuses worldwide,BP is also gaining access to today’s topstudents. Recruiting these stars of thefuture against such stiff competition is oneof BP’s major challenges. At MIT, BP hasincreased its visibility on campus, with BP‘information nights’ and short courses onrefining, petroleum and bio-based fuels.

One student who made the switchfrom MIT to BP is mechanical engineerElliott Perez. “A lot of kids I studied withwent on to work on Wall Street,” he says.“Some went to graduate school and a feware working with start-up companies,who are always looking to hire freshtalent.” Perez chose BP after he’d spent asummer with the company. “It was areally interesting internship, working ona pipeline detection project. Seeing thesheer scale of BP’s work drew me to thecompany after graduating.”

With so many partnerships, BP hasaccess to many students who may notwork for the company in the future, butit’s the importance of the work they’redoing right now that could impact on itsfuture. Will Herbert is a PhD student atMIT working with Professor Schuh onthe corrosion research, while BosolaOladeinde is studying the genome ofMiscanthus at the University of Illinois.

BRINGING BRIGHTMINDS TO BP

University of Illinois, with its 130-hectare(320-acre) energy farm – the world’s largestbioenergy crop research centre. Together,their focus is mainly on developingtransportation fuels from non-food plants(lignocellulosic or next-generationbiofuels). From its inception, the EBI wasdesigned to take a broad interdisciplinaryapproach, covering not only the science,but also the potential socio-economic andenvironmental impacts of biofuels.

The two universities are situated milesapart, but it is no long-distancerelationship. Engineers and scientists fromBP are co-located at both universities andhave acted as a bridge, bringing the twocloser together.

BP’s Xiaomin Yang’s role is to work withscientists from the partner universities touncover and transfer technologies to themarketplace. It’s this multi-disciplinarywork that has led to a breakthrough in thedevelopment of a yeast strain that cansimultaneously use all of the major sugarsthat make up lignocellulose (plant matter).

At the moment, 70% of available sugarscan be used. Finding a process to release theadditional 30% of sugars makes for a moreabundant, sustainable and efficient fuelstock. It was while at a project review inBerkeley that Yang heard research resultsthat he thought could fit together with thework of a team at the University of Illinois– and it did.

EBI associate director Paul Willems says,“This is not only a great technical advance,but also we think, it is an outstandingexample of what we had hoped toaccomplish through multidisciplinarycollaborations in the EBI and the work hasbenefitted directly from the involvement ofa BP scientist.”

Having a team of engineers andscientists from BP living under the sameroof as the academics is one reason cited forthe success of the EBI, which, in its shorthistory, has published more than 120papers in scientific journals. But for EBImanaging director Dr Susan Jenkins,sometimes it’s the work that doesn’t hit the »

“What’s great aboutthese relationships isthe ability to accessscientific reasoning andideas, and apply theseto existing and potentialindustry challenges.” David Eyton




“MIT is very good at, and interested in, doingscience that has application potential. Andspeaking for myself and the team, we arecommitted to doing science that has a real impact.”Chris Schuh

Campus life: MITengineering graduatestudent Will Herbert(opposite) is conductingresearch in corrosion. Mainimage, an MIT sailboat onthe Charles River with thecampus in the background.Bottom left, graduateresearch student inchemical and biomolecularengineering Dawn Eriksenin the EBI laboratory at theUniversity of Illinois.Bottom right, researchersat the University ofIllinois’s energy farmgather samples ofMiscanthus grass.



headlines that is of real importance. Shecites research that shows increased carbonsequestration in the soil from plantingenergy crops. “To me, that’s a success,because it’s an important statement to beable to make.”

But that research would not be possiblewithout close ties and the absence of anysibling rivalry. She says, “We’ve succeededin demonstrating how you can havepartners at different campuses and workcollaboratively and everyone comes outahead in the end, because it isn’t acompetition.”

The strength of any relationship is testedduring a crisis and this was true for BPfollowing the Gulf of Mexico accident inApril 2010. As it already had longstandingrelationships with academics, it was theirsupport that helped get to the heart of theimpact of the oil spill. Dr Terry Hazen, of theLawrence Berkeley National Laboratory andthe EBI, was keen to gather scientific datathat would lead to a greater understanding

of the effects of the spill. In mid-May 2010,Hazen had quickly mobilised a team tocollect samples and carry out research onmicrobial biodegradation. With 200 fieldsamples collected from 17 deepwaterlocations over several weeks, a paper waspublished in the leading peer-reviewedjournal Science showing that naturallyoccurring microbes were consumingsignificant amounts of oil, both in the watercolumn and at the surface.

Any good relationship will involveequal amounts of give and take. Thebenefits for BP are abundant, but

what do its university partners get out ofthe deal? Undeniably, BP brings much-needed funding. For example, it aims toinject $10 million over five years into astrategic collaboration, which includesMIT and the University of Manchester, UK,to investigate science and technologyrelated to materials and corrosion. Oneproject is about understanding surfaces and

the complex chemistry at play, whileanother is about changing the surfacechemistry that can, for example, preventlocalised corrosion. This long-termresearch relationship aims to enhance BP’soperational integrity and reliability in itsupstream business.

But as well as funding, BP brings real-world problems for universities to grapplewith, which gives them a window to workbeyond their own research. MIT’s ProfessorChris Schuh is directing one of the jointprojects. He says, “We’re connected toexactly the right folks in BP who knoweverything there is to know aboutcorrosion. Frankly, in a university, it’s reallyeasy to get in a closed loop in an ivorytower, where you are talking to yourselfand your colleagues and maybe to otheruniversity professors and when you startboring down on scientific details, it’sentirely possible to go down a dead end.Connecting with people who know theproblems out in the field keeps us focused.”

“We bring a western perspective to China – it’sa mix for creating fresh perspectives on thebig issues. Together, we are focused ondelivering some deep insights into how Chinawill handle its future energy based on the bestavailable data and the best possible tools.”Angelo Amorelli

Work and play: Bosola Oladeinde (top left)is studying the genome of Miscanthus at theUniversity of Illinois’s EBI laboratory. Above,

MIT track and field teams practise at theSteinbrenner ’27 Stadium, located on the

MIT campus. Right, professor Chris Schuhleans on a truck bumper – his corrosion

studies have led to the development of aprocess that prevents corrosion occurring soquickly on these bumpers. This is invaluable

for trucks that frequently travel through avariety of harsh environments.




One of the milestones of the project isset at five years, when it’s hoped a conceptwill be ready for scale and, ultimately,deployment. The idea of embarking on aunion that will one day spawn acommercial concept appeals to theuniversity. Schuh says, “MIT is very good at,and interested in, doing science that hasapplication potential. And speaking formyself and the team, we are committed todoing science that has a real impact.”

It’s not only the exchange of ideas thatreaps rewards, but also the exchange ofvalues. At Tsinghua University in

Beijing, China, where BP has a 10-yearprogramme underway, the Chineseacademics and researchers also value thecompany’s international outlook. BP’sAngelo Amorelli is the partnership’srelationship manager, most recentlyoverseeing the start-up of a five-yearprogramme to systematically model China’senergy system. “We are digging more deeply

into issues such as transport, powergeneration and unconventional gas. GivenChina’s record growth, the insights will notonly inevitably have an impact on theglobal energy system, but also BP’s strategicplanning,” he says.

“We bring a western perspective toChina – it’s a mix for creating freshperspectives on the big issues. Together, weare focused on delivering some deepinsights into how China will handle itsfuture energy, based on the best availabledata and the best possible tools.”

Amorelli also thinks the Chineseacademics place importance on hearingexternal views. “Our Chinese partnersvalue contact with internationalexperience. There is no shortage of Chineseperspectives, but there is a thirst to learnfrom people outside the country,” he says.

As the hunger for knowledge continues,creating ties that bind is fundamental tothe ongoing success of BP’s relationshipwith world-class universities. ■

While BP has direct relationships withmany universities, it also sees animportant role in making connectionsbetween universities where theirresearch overlaps. It has already donethis with the corrosion project, linkingMIT and the University of Manchester, aswell as with the creation of the EBI (seemain copy). However, it is now startingan ambitious project that brings togetherno fewer than 12 universities, separatedby geography, but joined in one aim: tomap tomorrow’s energy landscape. TheEnergy Sustainability Challenge is amulti-disciplinary research programme,headed by BP’s chief scientist, EllenWilliams, devoted to understanding howpressures on freshwater availability andincreasing competition for land andmineral resources may influence andguide BP’s policy and investment inenergy production technologies. TheUniversity of Oxford (UK) theInternational Institute for AppliedSystems Analysis (Austria) and StanfordUniversity (US) are helping BP navigatequestions about the relationshipbetween economic growth, populationincreases and energy demand. MIT andTsinghua University are looking at therelationships between water for use inthe energy sector and energy for use inthe water supply and treatment sector.The University of Cambridge, along withPrinceton (US) and MIT, are developingapproaches to assess the global water-land-energy system, so that for differentenergy mix scenarios, there exists ascientific basis for understanding thequantities of water, land and criticalminerals needed.

MAKING THECONNECTION



➔ upstre a m Business spotlight> Global wells organisation

THEGLOBALSTANDARDSince the tragic accident in the Gulf of Mexico, BP has made significant structuralchanges to the way it runs its upstream business. Perhaps the largest of these isthe creation of the global wells organisation – designed to deliver safe andcompliant wells across BP.

Report> Nic Welsh Photography> Marcus Almeida Knoedt & BP Imageshop

Whether an oil and gascompany is looking for new sources ofhydrocarbons, developing a new project toextract them, or already producing them,one thing is always present – the well thatbrings the hydrocarbons to the surface.

There are, of course, other, equallyimportant, disciplines that link each ofthese stages – geology and economicsamong them – but it’s fair to say that more

than a year after oil stopped flowing intothe Gulf of Mexico from the Macondo well,the drilling of wells is the area currentlyunder the most scrutiny.

Once the initial crisis response was overand the well capped, BP quickly madesignificant structural changes to the way itran its upstream business. Perhaps thelargest of these was the creation of theGlobal Wells Organisation (GWO).



Latest developments: worker onboard the Deep Ocean Clarion

drilling rig, in Brazil, movesdrilling pipe onto the rig.

Previously organised on a regional basis,with drilling teams reporting to separatebusiness heads, the new wells structure isnow led by a single vice president, whoreports directly to BP’s executive vicepresident for developments, BernardLooney (see page 6). The GWO’s remit: todeliver safe and compliant wells across BP.

Richard Lynch is the person tasked withdelivering this objective. “Having thissingle, global structure means that we canstandardise the way we operate,” he says.“Our aim is to be consistent and systematicin everything that we do.”

He’s not alone in the task, of course. Heoversees a team of experts around the worldand has divided his organisation into keyoperational and functional areas –including, among others, delivering the 26 recommendations from BP’s internalinvestigation report and restarting work inthe Gulf of Mexico, as well as technology,finance and organisational capability. Eachhas been assigned its own vice president,including area vice presidents for four keyoperational areas – Gulf of Mexico; onshore;offshore; and deepwater. Meanwhile, a vicepresident of engineering has been appointedto ensure consistency and conformance inthe organisation’s engineering standards,and to be accountable for making sure it has

the right skills in the right numbers in theright places around the world.

“By creating area vice presidents, we canput common operational activities together,so that they can learn from each other moreeffectively,” says Lynch. “It allows us tocontinually learn, and gives us the ability tolook at the common risks in each of thoseoperations. That way, we not onlyunderstand how best to eliminate the risk,but we can also create standard mitigationplans for similar styles of activities.”

Morty Denholm is one of Lynch’s areavice presidents, overseeing BP’s non-deepwater offshore activities, and is acutelyaware that this drive for standardisationdoesn’t simply mean creating a unique wayof doing things for each functional area.“Richard’s absolute intent is to firstconsider a standard approach no matterwhere we are in the world,” says Denholm.

This builds upon work BP had alreadydone to standardise the overall frameworkused in its operations to ensure all areas ofactivity – from safety and skills to financeand community relations – are monitored,managed and improved. This framework iscalled the Operating Management System(OMS).

“The whole idea of OMS is to besystematic in the way we run our

operations,” says Mike Zanghi, area vicepresident for the deepwater Gulf of Mexico.“That way we avoid inconsistent outcomesand ensure predictable ones.”

As the person responsible for wells in theGulf of Mexico area, Zanghi knows howimportant this predictability is. BP hasworked closely with the US regulator toenable restart of BP rig operations in theGulf of Mexico. The team is taking the timeneeded to make sure this is done right, buteach day brings a new milestone for one ofBP’s most important regions. “I always say topeople that if last year was the most difficultfor BP, this year is the most important,” saysZanghi. “Getting this year right, not justrestarting operations, but restarting them ina manner that is safe, compliant andsustainable, is critically important.”

Another milestone was reached in July,when BP wrote to the director of the USBureau of Ocean Energy Management,Regulation and Enforcement, MichaelBromwich, committing to enhancedvoluntary drilling standards in the Gulf ofMexico. The deepwater drilling standards gobeyond current regulatory obligations andreflect BP’s determination to apply thelessons learned from the Deepwater Horizonaccident. They include third-partyverification every time a subsea blowout »


Upstream>Global wells organisation


context behind the recommendation, liststhe activities required to support itsimplementation, and identifies theresources that a team will need to besuccessful. In addition, it identifies thechallenges associated with the work, areasof linkage between different work streams,and key milestones. Each recommendationhas its own programme manager to overseethe process, however, no action can bedeclared complete until the vice presidentof wells engineering approves it. But itdoesn’t end there – each action is thenindependently audited and verified by amember of BP’s new safety and operationalrisk team. Only then can an action beconsidered ‘closed out’.

“It’s vital that we are crystal clear fromthe very start of the process, so we’ve spenta lot of time getting our requirementsdefined upfront,” says Haden. “We thenhave a verification process for every singleaction that has been developed.”

The approach is already payingdividends, with one example foundin the way the GWO will enhance

its management of change (MoC) process,through more systematic application.Whenever significant changes occur in abusiness or operation, a MoC documentmust be drawn up. In the past, individualteams and regions would produce theirown documentation. However, everyone inthe GWO will use one common tool, withstandard documentation and training onhow to implement the process.

“We’ve built this process using examplesof best practice around BP,” says Haden, “sothat we can have one, consistent approach.That means we can then continuously

preventer is brought to the surface for testingand maintenance, and providing for the useof subsea blowout preventers equipped withno fewer than two blind shear rams and acasing shear ram when using rigs operatingin dynamic position mode.

Like Denholm, Zanghi knows that hemust think bigger than his own region.“One of my jobs is to ensure that we don’tcreate our own silo.” To that end, all thearea vice presidents confer on a regularbasis, sharing lessons learned, discussingrisk and helping to develop consistentprocedures and processes.

There is one very specific area that bindsall of GWO’s operations and that is BP’sinternal investigation report. Published in2010, it summarised BP’s four-monthinvestigation into the causes of theDeepwater Horizon accident and made 26recommendations designed to prevent arecurrence. BP immediately accepted all 26recommendations and it is now SteveHaden’s responsibility, as the vice presidentof wells engineering, to ensure that theyare implemented across the GWO. The idea– like everything else in GWO – is to take asystematic approach to the way they areembedded within the organisation.

Haden says: “By being systematic, wecan assure ourselves that the procedureswe are creating are of the highest quality,that they will be effectively implementedin the field, and that we can continuouslyimprove as an organisation, because nowwe’re following one way of doingsomething, not several.”

So, what does systematic mean? First ofall, a terms of reference is created for eachspecific recommendation, prior to anywork being carried out. This provides the

“Getting this year right,not just restartingoperations, but restartingthem in a manner that issafe, compliant andsustainable, is criticallyimportant.”Mike Zhangi



expect the frontline team to ask their ownquestions and have created a charter thatsays if someone is unsure about something,they ask. “We have to make sure peopleknow it’s okay to ask questions,” saysLooney. “In fact, I want them to feel that it’sactually part of their job to ask.”

Ultimately, it is the people who mustdeliver the processes andprocedures that will make the

GWO successful and Lynch knows it is vitalthat they feel engaged. “Each and everyperson we have in this organisation iscritical to our success. There’s a lot of workto be done and so we have a bigrecruitment campaign going on, but it’scritically important that we engage theworkforce we have today.”

To do that, Lynch and his team arecreating 10-year career roadmaps, designedto provide professional development foreveryone in the GWO. The team is also inthe early stages of forming a Global WellsInstitute, which will build on the lessonslearned from BP’s Operations Academy – adevelopment programme created inconjunction with the MassachusettsInstitute of Technology to support BP’soperational managers.

“We want to develop our professionals,”says Lynch. “We will take a proactive leadin actually creating a world-class, multi-curriculum facility, whether it be fortechnical, leadership, or business skills. It ismore than just training. It’s about deeperprofessional development. It’s reallyimportant that each and every one of ourpeople knows that they have an importantjob to do, all the skills to do it, and that theycan see where their future in BP lies.” ■

improve it as the organisation begins to useit.”

Talk to anyone in GWO and one wordwill keep coming back to you –sustainability. While BP has also put a lot of effort into developing crisis responseprocedures based on its experiences in theGulf of Mexico, no one wants to have toimplement them if they can prevent it everhappening in the first place. Long-termprevention depends on the measures thatare being put in place now enduring andbeing continuously enhanced in years tocome. OMS provides the framework for acycle of implementation, review andimprovement, designed to deliverthorough risk management on asustainable basis.

To be truly sustainable, though, Looneysays the whole team – starting with him –must feel personally responsible for thepiece of the business they work in. The onlyway do to that, he says, is to ask one question– how do I know? Many of the proceduresand systems in place are designed to helpprovide an answer, but sometimes, you can’tbeat the personal touch. So, like Looney,Lynch and his team spend a lot of timevisiting facilities to see for themselves howthe new organisation is working.

This could be a challenging experience,but the key is that the frontline remainsaccountable for delivering safe, compliantwells. “We cannot and should not micro-manage people,” says Zanghi. “Instead, I tellpeople that I want to have a ‘micro-interest’in what is going on, that we will be probinghow things are working, but being clear atthe same time that I expect them to retainresponsibility for conducting BP’s business.”

In turn, Looney and the GWO leadership

“It’s really importantthat each and every oneof our people knowsthat they have animportant job to do, allthe skills to do it, andthat they can see wheretheir future in BP lies.”Richard Lynch

Global operations: the helipadand derrick on the DevelopmentDriller III in the Gulf of Mexico(above); workers at the onshoreKhazzan field in Oman (top left),where BP’s expertise in drillingtight gas is helping the countryaccess new reserves; and BP’sNorth American onshore gasdrilling facilities include theArkoma basin in Oklahoma.



➔ Gulf of Mexico

Ongoing response> Tourism

BACK TO THE BEACH

Report> Ray Viator Photography> Marc Morrison

Holiday season: visitors enjoy thesunshine at Panama Beach, Florida,on 8 July 2011. The state’s tourismindustry has worked collaborativelyin order to draw people back to thecoast for their vacations.



The message from the tourism industry alongthe US Gulf Coast is very clear and consistent:“The water is clean. The beaches are beautiful.Come back to the Gulf.” And this year, it seemsthat the tourists agree. Following the massiveclean-up operation after last year’s oil spill,thousands of visitors have flocked back to thebeaches during 2011, once again eager to enjoythe many amenities and entertainmentoptions that the coast has to offer.

Jan Freitag of Smith Travel Research, says the outlook for the GulfCoast tourism industry is promising, based on research that hisfirm conducts on hotel trends across the US, including its surveyof almost 1,700 hotel properties with more than 175,000 roomsalong the Gulf Coast. “Collectively, they have been consistent insaying ‘it’s safe to come back to the beaches along the Gulf Coast.’The advertising has done a good job at keeping the Gulf Coast onthe forefront when families are planning vacations.”

Armed in part with $179 million in tourism grants andcommitments from BP, the four states most affected by the2010 Deepwater Horizon spill – Florida, Alabama, Mississippiand Louisiana – have launched high-profile tourismcampaigns, aimed at attracting visitors to the Gulf Coast.

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Florida With a background in marketing andhaving successfully run other businessorganisations, Dawn Moliterno was excitedabout being recruited to become theexecutive director of the South Waltontourism development council in the springof 2010. Ironically, she officially started thejob just two days after the DeepwaterHorizon incident in April 2010 and had to quickly switch into crisismanagement mode.

She says the crisis helped to pull peopletogether along the Florida coast. “It hadbeen a long time since we had reallycollaborated as a region,” says Moliterno,who believes the region’s tourism industrywill benefit from the new-found co-operative attitude for years to come.“Florida is a strong brand for tourism and

northwest Florida’s whole economy isdriven by tourism. While we are sevendistinct areas, we share the same coast.”

As chairwoman of the newly formedseven-county northwest Florida tourismcouncil, Moliterno says she has worked toencourage her colleagues in other tourismdevelopment councils (TDCs) to sharetheir marketing plans and strategies witheach other. The non-profit organisation isresponsible for managing the $16 millionthat BP is funding to promote tourismalong the northwest Florida coast.

Moliterno says the goal is to use thefunds as efficiently and effectively aspossible. The challenge, she adds, is finding

the right balance between promoting theentire northwest Florida coast as adestination, while at the same timeallowing each area to highlight theirunique attributes.

Part of the group’s effort is aimed atraising general awareness of thespectacular beaches in northwest Florida.

“Many people in the US feel like theyneed to go to the Caribbean to find whitesand beaches and emerald green waters.The reality is that they don’t have to leavethe US. They can find all of that here.”

To attract returning guests, as well as newvisitors, Moliterno believes the Florida TDCsmust be assertive in correcting perceptions

“Many people in the US feel like they need to go to theCaribbean to find white sand beaches and emerald greenwaters. The reality is that they don’t have to leave the US.They can find all of that here.”Dawn MoliternoExecutive director, South Walton tourism development council

Gulf of Mexico> Tourism



about the impact of the spill. She believesthe images of the spill were misleading interms of the amount of oil actually affectingthe Florida coast. “Television got us into thisand I believe television will get us out of it.”As a result, Moliterno’s group is buyingtelevision air time to run commercialsfeaturing recent images of Florida’s sugar-white sandy beaches.

“Without the BP funds, we would not beable to afford to buy television air time,”Moliterno says. With a strong call to actionin the advertising, the commercials arehaving an impact, she says.

In addition, the group is pursuing onlinemarketing. “In the past, 60% of ouradvertising would have been traditionalmedia and only about 40% online. Now,those figures have reversed.”

The online efforts are aimed atnurturing customer communities on »

Facebook and other social media. “It’s beenvery valuable, because our guests arereading about Florida from real people, intheir own words.”

Through mid-summer 2011, all thesigns were very encouraging, Moliternosays. “We had a very strong spring breakseason, Memorial Day weekend was good,and we had an incredibly solid Fourth ofJuly week. We’re seeing the return of ourcore customers, our guests who come hereyear after year.”

Alabama In Alabama, Mike Foster, vice president ofmarketing for Gulf Shores and OrangeBeach Tourism, believes the state made animportant strategic decision early in theprocess, when state leaders decided to

direct the majority of the tourism fundsfrom BP to the coastal areas.

While tourism on the coast felt thegreatest impact from the spill, the decisionto funnel money to the coast was alsobased on the realisation that the coast isboth a magnet and driver for tourismacross the state. “We are fortunate to have avery progressive state tourism director whorecognised that as the Gulf Coast goes, sogoes tourism throughout the state.”

As Foster notes, the beaches andamenities of Baldwin and Mobile countiesand the Dauphin Island area draw visitorsto southern Alabama and during theirdrive south they spend money in otherlocations.

“We know our audience very well,” saysFoster, who has been involved in Alabamatourism for more than 13 years. “There istremendous brand loyalty. In fact, 70% ofour visitors are repeat visitors. They cometo the beaches of Alabama year after year.They have grown to know us and love us.”

As a result, the tourism campaign forOrange Beach and Gulf Shores has soughtto capitalise on its loyal customer base.

“Our advertising is built around themessage that ‘everything you remember isstill here, so come on back.’”

Alabama officials also recognised theneed to expand their market base. “Werealised that there are lots of people whohave never been here before and who didn’teven know that Alabama had sugar-whitebeaches and other amenities,” Foster says.“With the funds from BP, we have been ableto reach people that we haven’t in the past.”

Foster’s group has also taken theopportunity to promote tourism along theGulf Coast in “refreshing, unique and

Florida statistics ($ million)

$32min tourism grants for 2010

$30min tourism commitments

for 2011-13

Active lifestyle: children (far left) carry asurfboard up the beach at Gulf Shores,Alabama, 9 July 2011. Above, a fishermanat Grand Isle, Louisiana.



»

creative ways that we would never havebeen able to do in the past. We want themto sit up and take notice.”

In addition to expanding the geographicreach of its tourism campaign, Foster’sgroup also implemented both traditionaland digital programmes, to entice itsgreatest sales force: current visitors.

During the 2010/11 ‘snowbird’ season,when thousands of visitors descend on theGulf Coast from the cooler US Midwest andnorthern states, Alabama officials distributed30,000 coffee mugs stuffed with postcards.

Foster says snowbirds love gettingfreebies – and news about giveaways quicklyspreads throughout this visitor segment.

“We offered them free coffee mugs, withonly one request: that they mail thepostcard to a friend back home to tell themthat they were having a great time here.”

Foster’s inventory of mugs was soonexhausted, and postcards extolling goodtimes on the Alabama coast were on theirway to friends and families around the US.

The same basic strategy of encouragingvisitors to share their beach experienceswas also applied online. Through Facebookand online programmes, such asFoursquare, Foster’s expanded team ofonline specialists sought to encouragevisitors to share their advice on the bestplaces for seafood, quiet walks on thebeach, or favourite fun things to do.

Foster says it’s amazing how willingpeople are to share their stories onFacebook and elsewhere online.

Looking back, Foster says he first began

to feel good about the recovery in Alabamatourism when he visited with the first groupof snowbirds to arrive last winter. “Theywere happy, eating well and having fun.”

Perhaps the biggest sign that tourismwas returning to the Alabama coast wasthe hugely successful Hangout MusicFestival in late May. The festival, which wassponsored in part by BP, drew more than30,000 attendees and “brought in manypeople who had never been to the Alabamacoast before.” To keep that momentumgoing and attract more visitors, anotherdozen or more concerts are scheduled thisautumn and into 2012.

If the new visitors return at the samerate of the current tourism base, thenFoster believes Orange Beach and GulfShores will be able to continue to expandits tourism business in the coming years.

LouisianaAs Louisiana’s official tourism ambassador,Lieutenant Governor Jay Dardenne isleaving no stone unturned in his efforts toattract more tourists to the state.

Since taking office in November 2010,Dardenne, along with other state tourismleaders, has introduced a new tourismmarketing theme for the state, worked thenational media circuit in New York City,expanded the use of online advertising, andbegan writing his own tourism blog.

The state’s biggest tourism challenge,Dardenne says, is correcting the lingeringmisperceptions about the safety ofLouisiana seafood, especially among peopleoutside the region. That’s why, among otherthings, he has led two marketing trips toNew York City to meet with national media,as well as food and travel writers. Duringone trip, he conducted 28 radio andtelevision interviews in one marathonmorning session.

He and other tourism officials are alsoworking closely with the LouisianaSeafood Promotion and Marketing Boardon a variety of programmes aimed atpromoting the safety of Gulf seafood.

Dardenne says the two most significantdevelopments in Louisiana’s approach totourism promotion are the launch of a newmarketing campaign theme – ‘Pick YourPassion’ – and a significant increase inonline advertising and promotion.

In introducing the new marketing theme,“our thinking was that we are a passionatepeople about food, music and festivals.”

He says that festivals are drivers fortourism throughout the state. “Festivals are

“There is tremendousbrand loyalty. In fact,70% of our visitors arerepeat visitors. Theycome to the beaches ofAlabama year after year.They have grown toknow us and love us.”Mike FosterVice president, Gulf Shores andOrange Beach Tourism




Party atmosphere: with its extensiveseafood menu and a successful musicfestival held in May this year, theHangout restaurant and music venue(above and far left) is popular withholidaymakers. Below, the Natchez is oneof two steam-powered steamwheelers totravel up and down the Mississippi. It’sdaily two-hour jazz cruises depart fromnear New Orleans’s French Quarter.

Alabama statistics ($ million)



for 2011-13

Louisiana statistics ($ million)



for 2011-13



a way for us to celebrate the culture andway of life in Louisiana. In fact, we havemore than 400 festivals in Louisiana, andwe like to say that if it walks, flies or swims,we have a festival to celebrate it before wethrow it in a gumbo.”

The state also enhanced its tourismwebsite, adding a virtual visitor centre anda blog written by Dardenne. He says thestate is focusing both BP funds and otherstate tourism funds to advertise moreintensively online.

“This is a new marketplace for us,”Dardenne says, and the state’s tourismgroups are working to better understandhow people decide where to vacation andhow they search for information.” The stateis also placing broader emphasis on socialmedia as a marketing tool.

Since most tourists immediately thinkof New Orleans when they think aboutvisiting Louisiana, Dardenne says he seesan opportunity for the rest of the state tocapitalise on the Big Easy’s prominence as atourist destination.

“We work in concert with New Orleanson tourism. They have a large budget andactive marketing plans, so we look for waysto complement what they are doing,” as

well as encourage visitors to New Orleansto add extra days to their trips to see otherparts of Louisiana.

Visitors come to New Orleans, in largepart, for the unique culture and the food,Dardenne says, but “we want them to havethe complete south Louisiana experience,”including fishing, swamp tours, tours offormer plantations, birding and otheroutdoor experiences.

Another focus for Louisiana tourism,Dardenne says, is the recreational fishingindustry. “From a pure tourism perspective,the recreational fishing industry sufferedthe most from the oil spill, so we areworking to dial it up a bit and help thatindustry grow again.”

Looking forward, Dardenne sees signsthat the tourism industry is recoveringmore quickly than first expected.

“The pace of recovery is good, but thereis still work to be done,” he says. Theinfusion of BP funds has enabled the stateto accelerate its advertising and marketingefforts aimed at correcting misperceptionsabout the safety of Louisiana seafood.

The state’s tourism marketing effortincludes targeting Louisiana’s traditionalmarkets such as Texas, Arkansas and parts

of Florida, as well as efforts to attractvisitors from new markets, such as Atlantaand Memphis.

Helped in part by BP tourism funds,Dardenne also hopes to invest in nationaladvertising opportunities on targetedtelevision networks in 2012, where hebelieves there is a natural interest andreceptiveness to messages about Louisianaculture, food and other attractions.

“Our greatest asset is the authenticityand diversity of our people. It’s what makesus unique and different from other travelexperiences.”

MississippiIn Mississippi, John McFarland, marketingdirector of the Biloxi Sun-Herald, believesthe most significant development intourism has been the creation of a regionalapproach to tourism marketing.

Noting that the individual tourismdevelopment councils in the three countiesalong the Mississippi Gulf Coast are eachrelatively small with limited funding, “thiswas the first time the Mississippi GulfCoast region worked together,” McFarland

Culture and food: many people visitNew Orleans’s French Quarter (left)for its jazz and seafood. Above, crabfishing on Wolf River in Gulfport,Mississippi, is a popular pastime.Right, kitesurfing in Biloxi,Mississippi, 19 May 2011.




even though they were expecting to findeverything under oil because of all thenegative media coverage.

When surveyed again in October 2010,he says, most visitors had changed theirperceptions about conditions on the beach.By the third round of research in February2011, “most people didn’t even mention theoil spill.”

The group also discovered that manyvisitors were surprised by how much thereis to do in the area. “They told us that ourads don’t brag enough about everythingthere is to do on the Mississippi coast.”

As a result, area business leaders havebegun looking at how it can better promoteall of the region’s tourism assets. As anexample, McFarland cites the fact that thePascagoula River is the longest undammed

says. “The BP tourism funds have given usan opportunity to do things we have neverbeen able to do before.”

With the first round of BP funds, theregion developed an advertising campaign,built around the theme of ‘wish you werehere’. The campaign created measureableresults, and helped the region better defineits strategy.

To manage the second round of BPtourism funding, area leaders created theMississippi Coast Regional TourismPartnership, a non-profit tourismmarketing organisation, comprisingrepresentatives from each of the threecounties. The group also led thedevelopment of a strategic tourism plan,brought in tourism professionals andbeefed up its online efforts.

The group also invested in research tobetter understand the region’s tourismcustomers and their views about visitingMississippi.

During three rounds of interviews with2,000 people who came to the Mississippicoast, the research showed changes invisitor perceptions over time. In July 2010,McFarland says, many visitors cameprimarily to show support for the region,

river in the country. “The Pascagoula Rivercan be a focal point for ecotourism, whichis one of the fastest growing segments ofthe tourism industry.”

In addition to its 42 kilometres (26 miles) of beaches, the region’s 12casinos and 14 major golf courses havebeen the primary magnets for tourism. But McFarland and other area leaders seeopportunities to also promote the region’swealth of festivals and events.

“There is a festival or cultural eventalmost every weekend along theMississippi coast, from Cruisin’ the Coast,which features 4,000 vintage cars, tofishing tournaments, music festivals andMardi Gras. The Mississippi Gulf Coast has so much more to offer than manyvisitors expect.” ■

Mississippi statistics ($ million)



for 2011-13

“There is a festival or cultural event almost everyweekend along the Mississippi coast, from Cruisin’the Coast which features 4,000 vintage cars tofishing tournaments, music festivals and MardiGras. The Mississippi Gulf Coast has so much moreto offer than what many visitors expect.”John McFarlandMarketing director, Biloxi Sun-Herald



An art room isn’t the first place you’d expect to find one of the UK’s top wheelchair racers, but this summer,Paralympian Shelly Woods took time out from her hectic training schedule to model in a drawing class fora group of aspiring young artists. Fifteen young people from across London attended the first of two free BP-supported Summer Schools at the National Portrait Gallery. Over the three-day event, the artists were givensupport and advice on all aspects of portraiture from previous BP Portrait Award winners, including JaneAllison, who won in 1993. Shelly spent an afternoon with the group, sharing some of her experiences as anathlete, before holding a series of poses from which the group could sketch. Those sketches were laterturned into full portraits. “I was very open-minded about the experience,” says Shelly. “They’re all verytalented and my job was to hold each pose for as long as possible. It was fascinating to see how differentpeople honed in on different aspects, and to see how they interpret you.” The Summer Schools are part ofBP Portrait Award: Next Generation, a three-year project to encourage young artists of the future, and is partof the London 2012 Cultural Olympiad. “BP is delighted to be supporting this extension of the BP PortraitAward,” says Des Violaris, BP’s arts and culture director. “We want to provide opportunities for youngpeople to work with practising artists to explore portraiture. Who knows, we might have a future BPPortrait Award winner in our midst.” ■

The model sportswoman

Viewpoint> BP Portrait Award: Next Generation



PHOTOGRAPHY: JON CHALLICOM


➔ business spotlig ht Integrated Supply & Trading> 10th anniversary


TRADINGFACES

Ten years after it was first set up, BP’s Integrated Supply& Trading organisation is still playing a vital role inensuring the company has constant access to its coremarkets at competitive prices, while making sure itsrefineries and retail sites are fully supplied.


Report> Lisa DavisonPhotography> Stuart Conway/Graham Trott/Marc Morrison/Joseph Lynch


Gas matters: a gas trader at workat BP’s Canary Wharf offices,London. The IST organisation

markets several times more gasthan BP’s upstream businessproduces in North America.


customers to buy. Trading also helpsanticipate regional needs. To return to theJapanese earthquake, IST quickly realisedthat with Fukushima offline, the countrywas going to need more LNG imports in2011. “We were able to reconfigure oursupply programme in a month and getextra cargos to them,” says Reed.

Likewise, during the US hurricaneseason, refineries along the Gulf Coastsometimes close, and, in the past, IST hasbrought in extra gasoline cargoes at shortnotice, to assist in adequately supplyingthe affected area. Providing this liquidity tomarket also helps smooth out pricevolatility caused by such events.

Nevertheless, there are risks associatedwith trading, as in any business, and in2006, IST faced its own crisis, when BP andfour of its traders were charged withmanipulating and attempting tomanipulate prices in the US propanemarket in 2003-04.

It was a difficult moment for theorganisation. At the time, Reed wasresponsible for BP’s European oil trading,but was sent to the US to respond to thesituation, which he describes as “a hugewake-up call. We realised we had toimprove our compliance framework.”

BP eventually settled with the USregulator and set about taking a ‘root andbranch’ approach to the problem,completely redesigning its complianceframework, with the aim of creating aculture where everyone at every level ofthe organisation is focused on control andcompliance. The changes were significant,including substantially increasing thescope and scale of BP’s complianceprogramme, rolling out new globaloperating standards, and implementingrigorous training programmes. Theindependent US trading monitor –compliance expert and highly experienced

Reed. “We had to buy crude and helpdevelop a traded market.”

Today, it is IST’s job to ensure BP’s oiland gas production has constant access to amarket at competitive prices, and that itsrefineries and marketing outlets are fullysupplied. Or, as Reed puts it: “We selleverything that BP gets out of the groundand we buy everything that Refining &Marketing [R&M] puts into its refineries,airports and retail sites. We then sell anyexcess product from the refineries that isn’tgoing into one of BP’s fuels value chains.”

But it isn’t just about oil and gas anymore.The type of products that IST trades hasexpanded over the years to include foreignexchange, power, precious metals forcatalysts used in BP’s refineries, and chemicalplants, agricultural products for biofuels, andcarbon dioxide emissions credits. “Anythingthat is traded on an open market comesthrough us,” says Reed. “That gives us a viewof the entire market and enables us to takeentrepreneurial positions.”

Volatile businessThe challenge, of course, is that commoditytrading can be a volatile business,particularly since the credit crunch in2008, during which time oil prices havefluctuated massively.

But, says Reed, those flucuations do nothappen because a trader is speculating onprice. “Oil is a volatile commodity, it candrop just as quickly as it goes up.” This wascertainly true in May this year, when theprice fell $10 – the largest single day dropin the history of oil prices. “Drops like thatare usually caused by something like waror hurricanes,” says Reed. “On this occasion,no single event was the catalyst.”

Reed believes that trading helps create atransparent price that reflects demand andsupply, so that countries and companiesknow at what level to sell their crude and

When a magnitudenine earthquake and tsunami hit Japan inMarch 2011, it caused widespreaddevastation, knocking out the coolingsystems at the Fukushima nuclear plant,and causing meltdown at three of itsreactors. The impact of this second disasterhas been felt around the globe, withGermany cancelling its nuclear programmeand other governments delaying decisionson the future of nuclear in their country. Allof this, says Paul Reed, head of BP’sIntegrated Supply & Trading (IST)organisation, has fundamentally changedthe liquefied natural gas (LNG) market forthe next 20 years. “With so many othercountries reconsidering their nuclear plans,suddenly, the long-term market for LNG hassignificantly shifted,” he says.

This is just one of dozens of examples ofhow world events can have a dramaticeffect on the way that energy supplies arebought and sold around the world. Thosedoing the buying and selling have to adaptquickly to keep the supplies moving to theright places.

It was partly this need for flexibility thatled to BP setting up its IST division 10 yearsago, in July 2001. Prior to this point, thecompany’s oil, gas, power, chemical andfinancial supply and trading activities hadbeen conducted by individual teams andbusinesses, creating numerous processes andsystems, as well as presenting many differentfaces to the external traded markets.

The wider industry was changing aswell, with banks and funds increasing theirpresence in commodity-trading operations,fuelling rapid growth in this market. Theintention was that IST would act as a singleface to the market, creating a streamlinedservice, with common standards oncontrol, compliance and risk management.

History has left BP less integrated thansome of its main competitors, having lostmuch of its production in a wave ofnationalisations, in the late 1970s. Withrefineries around the world and little crudeto fill them, BP was forced to become moreentrepreneurial in its thinking. “Theindustry model was to be highly integratedacross upstream and downstream, and,suddenly, we were non-integrated,” says


“Anything that is traded on an open market comesthrough us. That gives us a view of the entire market,and enables us to take entrepreneurial positions.”Paul Reed

Integrated Supply & Trading>10th anniversary

»

Global operations: BP hastrading operations spread

around the world, including itsfour main hubs in Houston,

Chicago, London and Singapore,all pictured opposite.


TRADING TERMINOLOGY

Physical – the tangible commodity, forexample, crude, gasoline, soya Paper – financial derivatives, forexample, futures, swaps and optionsBullish – the belief that market priceswill riseBearish – the belief that market priceswill fall Long – to benefit from prices risingShort – to benefit from prices fallingCargo – a standard size of crude orproduct traded on a market Bid – the price at which you areprepared to buy Ask/offer – the price being quoted atwhich to sell Exposure – the extent to which a pricechange in the market affects your profitor lossFutures – a contract for the purchase orsale of a commodity that is traded forfuture delivery at a price or pricingformula agreed at the time the contract isentered intoLiquidity – a market is said to be liquidwhen it has a high level of tradingactivity, allowing buying and selling ofcommodities with minimum pricemovementPosition – taking a position is to close afirm contract to buy crude oil orproducts, or to secure capacity, such asrefining or shippingSwap – a paper contract for a specifictime period, quantity and grade,according to specified terms – forexample, ‘swapping’ a fixed price for afloating price, or creating a payout basedon the relationship of the price of afeedstock, versus the price of a product it createsHedging – to mitigate risk, for example,using offsetting futures contractsArbitrage – to trade the dislocation ofprices between geographical areas ortime periods




needs of the wider corporation, it also usesits expertise to provide similar services forother smaller producers and refiners. Manydo not have their own marketing division,so they call upon IST to manage theprocess for them. In natural gas, forexample, IST markets several times moreproduct than BP’s upstream businessproduces in North America.

IST also offers price risk managementservices to a range of customers worldwide.These allow an independent producer, forexample, to lock in its prices for a fixednumber of years, in order that a bank mightlend it money to drill a well, or an airline toagree a fixed price for the coming year, toreduce price volatility for its customers.

“IST is all about relationships,” says AlanHaywood, IST’s head of commercialdevelopment. “We’re always looking forsolutions for our customers. Thosesolutions have to work for BP as well, but Ithink our skill in trading is recognised inthe external world and people want towork with us because of it.”

Certainly, this seems to be the case inBP’s new partnership with RelianceIndustries in India. As well as upstream co-operation, the two companies are set tocreate a joint marketing company. “One ofthe things we emphasised to Reliance wasthe skills we have honed in the European,Asian and American markets and how wecan bring that to bear in the nascentmarkets of India,” says Haywood. “I thinkthat was very appealing to them.”

It’s a model IST hopes to replicate, as itlooks to continue growing its business. LikeBP’s upstream business, renewal is criticalto IST’s ongoing success. Old contractsexpire, and new ones must be forged. “Weare always in growth mode,” says Reed. “Thechallenge is to grow new business fasterthan the old contracts expire.”

lawyer Bart Schwartz – who was appointedto review and monitor the effectiveness ofIST’s compliance controls, played a key rolein supporting IST, as it embedded the newcompliance culture.

The impact of those events has lefteveryone deeply aware of the importanceof working with the industry regulators.And while the two sides may not agreefrom time to time, both share an interest inmaking the market work. “If theregulations change, and we have to changethe way we do business to remain incompliance, then we will adapt,” says Reed.

Market changesNot only has IST changed dramatically, butso have the markets in which it operates.This is particularly true of natural gas.Demand for gas has risen as powercompanies have recognised its economicbenefits in creating electricity, with fewergreenhouse gas emissions thanconventional coal generation. This hasmeant an increase in the amount of gasthat IST handles. Unlike crude oil markets,which tend to focus on a couple of keymarkets, such as Brent and West TexasIntermediate, gas is traded through manyregional hubs, with more than 20 in NorthAmerica alone. “This is because there wasregional volatility in gas prices,” says Reed,“and trading mechanisms developed toreflect that.”

LNG has made it easier to move gasaround the world, but the market for it istraditionally less ‘liquid’ than oil. “LNGhistorically relied on 30-year ‘life-of-field’contracts,” says Reed. “So, gas would movefrom one region to another in a very fixedmanner, unlike oil, which is sold flexiblyon loading to its highest-value market. It isstarting to change, though.”

While IST’s primary role is to service the

IST also has particular areas of focus onwhich it plans to concentrate. “First isgeographical expansion,” says Haywood. “Weneed to recognise the growth occurring inthe eastern hemisphere, while remainingfocused on the western hemisphere.Nonetheless, we need to be mindful of wherethe trade flows are going, and, increasingly,they are moving east. We also want tocontinue extending into new markets,particularly in biofuels, power and emissionstrading. Finally, we want to do more tradingof our financial products, and expand ourhedging services for third parties.”

Competitive edgeThis growth is vital if IST is to stay one stepahead of an increasing number ofcompetitors. “There is no doubt that overthe years, we have seen a lot more peoplecome into our markets,” says Reed. “Oilcompanies like us, utilities, trading houses,banks – they’re all looking to expand intothis space. So, the key is to be able to re-invent yourself rapidly.”

But reinvention must never come at thecost of compliance. “We want to ensurethat this is a robust business, that we aremaking money, but that we are also usingour resources wisely, that this is a placewhere people want to work and that wekeep our focus on safe, controlled andcompliant operations,” Reed concludes. “Ifwe get that right, then it naturally creates aplatform for growth, both for BP and IST.”With that in mind, there’s every reason tobelieve IST will still be going strong inanother 10 years. ■

Deal makers: a gas trader atBP’s offices in Canary Wharf,

London (top left); and a traderbased in its offices in Singapore.

Integrated Supply & Trading>10th anniversary


Sharon Rynders Commercial and relationship manager, Energy Biosciences Institute (EBI)Sharon Rynders’ calendar is full of birthdays, and her contact book bulges with the names of her co-workers’ pets.It’s just one way, she explains, of maintaining and building close relationships with the people she works with.And, she works with hundreds of people in her role, as both commercial manager and relationship manager forthe EBI, the $500 million BP investment that spans laboratories and farms from the University of California,Berkeley, to the University of Illinois. “Building relationships is a contact sport. If you spend time getting to knowsomeone up front, then you find people are more willing to help when you need them,” she says.

Her commercial role covers the financial planning and communications side of the EBI, which is dedicated tousing biology to find fuels of the future. But what motivates her most is using her technology background tobring together university researchers and subject experts in BP.

“I like making the connections – it’s what I get out of bed for in the morning,” she says. “I get a real kick out ofconnecting the technology I see in the field to the BP business, or seeing work that I know could really helpsomeone else to make advances in their area.”

Making connections and seeing how the pieces fit is also a clue to one of Sharon’s hobbies outside work.“Jigsaw puzzles keep my mind active. People ask whether there’s a particular type I like, but I don’t care – I justlike seeing the picture come together in the end.” ■

MAKING CONNECTIONS

Photography> Marc Morrison

BP Faces


“I get a real kick out of connecting thetechnology I see in the field to the BP business,or seeing work that I know could really helpsomeone else to make advances in their area.”

BP_MAG_SD371_47.qxd:Layout 1 30/8/11 12:37 Page 1


➔ corporate ventu ring Innovation> BP Ventures

BP has embraced the concept of ‘corporateventuring’, making $125 million of investmentsover the past five years. Today, the company seesthis activity as an important way to plug intoinnovation across its full spectrum of operations,acting as a catalyst for change in shaping itsfuture strategic landscape.

SEEDFUNDING



Report> Nick ReedPhotography> Simon Kreitem

Meticulous work: a scientist atMendel Biotechnology extracts

seeds from Miscanthus grass fortesting. Mendel is one of a

number of companies in which BP Ventures has invested.



Innovation> BP Ventures

Few great things are achievedwithout innovation. And precious littleinnovation is achieved without peoplesharing ideas, risks and opportunities.

That’s the simple philosophy behind‘corporate venturing’, a term used todescribe the investment by large companiesin smaller, ‘growth-stage’ businesses, to helpfund the development of new products ortechnologies. The mutual benefit isobvious: the recipient of the investment hasthe financial backing it needs to acceleratethe development, while the investor hasaccess to the resulting innovation.

BP’s corporate venturing arm wasestablished in 2006. Now called BPVentures, the team comprises a cross-functional group of around 12 venturingprofessionals, based in the UK, US, Chinaand India. Twenty-four investmentstotalling around $125 million have beenmade in the past five years, with furtherinvestments in the pipeline.

The head of BP Ventures, Justin Adams,explains that the team is playing anincreasingly important role in shaping thecompany’s future strategic landscape. “Theindustry is under pressure, like neverbefore, to find new solutions and newopportunities in areas such as climatechange, energy security and green jobs. But the days when our own researchlaboratories could experiment broadlyhave gone,” he says. “By investing insmaller, entrepreneurial companies, thatare nimble and can move quickly, we areable to create deep strategic insight for thecompany around how the future mayevolve, and develop long-term options,particularly in the lower-carbon space.

“Looking at these possibilities not only

means analysing the opportunities thatmay emerge to help build new growthplatforms, but also identifying the threatsto the group’s core businesses so that itslong-term value is protected.”

According to Adams, the group is morethan just another business. “It’s a discipline,an attitude, a way of thinking, interactingand behaving,” he says. “As a group, BP’scollective mindset has long been one ofextending what we know. In today’s energylandscape, among other things, this meansfocusing on new areas and activities,adjacent to oil and gas, which leveragemany of our existing skills, capabilities andassets, but in different ways. In short, to actdifferently, we must think differently.”

Acknowledging that it should beinvesting in, and partnering with,companies and investment funds at thisinnovative frontier of energy is one thing.The big question is which companies?

The team scans around 1,000 businesseseach year, rigorously evaluating theopportunities for investment against twoclear and equally important criteria – thestrategic value to BP and the commercialpotential. In selected areas, such as energyefficiency, energy storage and low-carbonalternatives, initial experiments will be run– a small equity investment will be made inan entrepreneurial company to learn how atechnology is evolving, for example, orparticipation in a third-party pilot project.

“Only then, when we have learned allwe can and we are sure that it is right forBP, will we be confident that we can investto build and scale a business,” Adams says.BP will typically invest $1 million to $5million to acquire a minority stake in acompany – rarely more than 20% – and »

“By investing in smaller, entrepreneurial companies,which are nimble and can move quickly, we are able tocreate deep strategic insight for the company aroundhow the future may evolve.”Justin Adams



INVESTMENT PORTFOLIOBP’s portfolio of strategic venturing investmentspans three broad areas: carbon innovation, bio-energy and electrification. This includes a rangeof specialised innovations and technologies, suchas waste-heat recovery, energy storage, carbonfunds and land-carbon projects, new solartechnologies, biofuels and bio-based products,and many other areas.

One example is Scotland-based Heliex Power, aspin-off from City University London, which isusing its expertise in screw compressor technologyto develop new waste-heat recovery solutions, thatcould offer significant power generationopportunities at refineries and other industrialsites where the potential is normally lost.

Around 50% of the primary energy consumedby BP operations is ‘lost’ as heat, which, ifconverted to electrical energy, would have avalue of at least $650 million per annum. TheHeliex Power technology is ideally suited torecovering useful energy from waste heat.

“BP’s investment has entirely enabled us to getthe project going – setting up premises, hiringappropriate people, and getting to the point wherewe have almost completed our first machine,” saysHeliex chief executive Dan Wright.

“Just as importantly, when we launched theproject at this year’s Power-Gen Europe show inMilan, we were able to use the BP badge on ourstand. The credibility that gave us is reallyimportant in generating interest and futurefunding.”

Another BP venturing investment is inMendel Biotechnology of California, which ispioneering world-leading genetic and chemicalsolutions to enhance agricultural systems –boosting crop yield or improving droughttolerance, for instance. The company also has abioenergy seeds division, which is developingnew varieties of highly-productive energy grassesthat won’t compete with food.

“BP is potentially a large customer for Mendelin the emerging biofuel space,” says JustinAdams. “This project illustrates the role ofventuring in helping to develop a feedstock foruse by BP Biofuels, and for the emergingbiopower and bioproduct sectors.”

The organisation has also developed animportant new partnership with LubriGreenBioSynthetics, also of California, which isworking to develop the world’s first trulyeffective bio-based automotive engine oils. Thisis BP Ventures’s first project with Castrol, BP’slubricants business in Refining & Marketing.“Our investment is helping LubriGreen grow, sothat, ultimately, it can supply Castrol withfeedstock products for its new ‘green’ line oflubricants,” Adams says.

Wider application: BP’s corporate venturinginvestments now span the full spectrum of

its operations. Above, a LubriGreentechnician examines a reaction in the

development of a vegetable-based bio-oil.Below, California-based biotechnology

company Verdezyne is developing uniquefermenting processes for producing

renewable fuels and chemicals.



then help its partner top up this with third-party capital, as necessary, through futurefundraising.

“Of course, there’s an element of riskinvolved with this kind of investment,because the project might not fulfil itsinitial potential,” Adams says. “But ourrigorous appraisal process and portfoliomanagement means we are able to use ourmoney wisely.”

Corporate venturing has enjoyedsomething of a renaissance in recent years,as companies realise they have neither theresources nor the speed to keep up with theblistering pace of innovation. Investmentin the ‘clean tech’ sector specifically hassoared over the past decade, going fromalmost no investment even five years ago,to $250 billion today. Venture capital has

played a crucial role in that rise.Innovation in the upstream is also rife,with several venture funds focused oncommercialising innovative explorationand production (E&P) technologies, andseveral E&P companies and large servicecompanies boast active venturing arms.Energy start-ups are now playing a crucialrole in challenging the status quo, throughnew technologies and business models.

The energy sector is critically differentfrom other industries where venturecapitalism has been so successful in thepast, however. The bill for transitioning toa sustainable energy future will run intotrillions of dollars, is long term and, just asimportantly, the large-scale innovation andorganisational change required will needthe sophistication, scale and reach of largecorporates, says Adams.

“Everyone jumped on the clean energybandwagon, but a lot of people just didn’tunderstand the time-frames and costsinvolved in bringing these newtechnologies to market,” he continues. “To a large extent, the venture capitalcommunity believed it would be the same

“The key for us is to keep our finger on the pulse. If wecan continue doing that, we can be a catalyst for changewithin BP and the entire energy industry.”Justin Adams



as the internet boom, and there would behuge returns in a short space of time. But,that will never happen in the energysector, so many start-ups are struggling toget to scale and many venture funds arenow sustaining losses on theirinvestments.

“This makes the role of corporateinvestment increasingly important in thisarea. BP understands that it will take manydecades to transform the energy sector,overall, and that innovations today couldtake 10 years to get to the market. But bybeing involved early, we can understandhow the innovation might fit with ourbroader business. The energy sector is usedto taking a long-term view. Having saidthat, we also expect to see the first of ourinvestment projects coming to market in2012, and the beauty is that, eventually, thecash flow generated by our investmentswill make BP’s venturing activity entirelyself-funding.

“The key for us,” he concludes, “is to keepour finger on the pulse. If we can continuedoing that, we can be a catalyst for changewithin BP and the entire energy industry.” ■

“These days, corporate strategy is aboutchange, not stability, and the role ofmanagement is about industry leadershipand the vision to drive change.”Heidi MasonManaging partner, Bell Mason Group

INNOVATION STRATEGYThe need for innovation and venturing as a means ofcorporate growth is becoming increasingly critical, spurred byglobalisation and the ubiquity of technology advancements.

That’s the view of Heidi Mason, co-founder and managingpartner of the Bell Mason Group, which has helped numerouscompanies build effective and measurable innovation andventuring programmes.

“Innovation strategy is now the cornerstone of every boardmeeting, as corporations think through their targets forgrowth in the next decade and figure out how to‘operationalise’ innovation as a means to that end,” she says.“These days, corporate strategy is about change, not stability,and the role of management is about industry leadership andthe vision to drive change.

“Teams such as BP Ventures are leading the charge toeliminate corporate silos and establish internal innovationnetworks.

“Working together with external partners, they targetcustomer-centric opportunities and applications in adjacentmarkets, as well as platforms that can spawn multiplebusinesses and breakaway ventures. These have the potentialto extend the runway of the established businesses, and createfuture business divisions for the parent company.”

Investment opportunities:BP Ventures has made anumber of investments,including Heliex Power (far left top), which hasapplications in any processthat produces waste heat;Mendel Biotechnology (far leftbottom and left); LubiGreen,which is developing bio-basedautomotive engine oils (facingpage); and Verdezyne, whichuses proprietary technologyto create and improvemetabolic pathways for theproduction of ethanol andadipic acid (middle left).

Innovation> BP Ventures


Report> Ray ViatorPhotography> BP Imageshop


➔ Gulf of Mexico

Early restoration

An agreement between BP and 16 government agenciesthat will see up to $1 billion pumped into early restoration

projects across the four states affected by the DeepwaterHorizon tragedy last year, marks the next stage in the

company’s efforts to restore the Gulf.

RESTORATIONWORK GETSUNDERWAY



Environmental efforts: a workerfrom the Bon Secour Natural

Wildlife Refuge in Alabama studies acrab covered in oil (below) in June

2010. Left, volunteers worked withthe Coalition to Restore Coastal

Louisiana, planting vegetation onElmer’s Island to assist in stabilising

and capturing sand to help builddunes, October 2010.



It allows projects important to the Gulf’srecovery to begin this year, rather thandelaying restoration until the assessmentof natural resource damages (NRD) iscompleted. Early restoration projects willundergo public review before they arefunded, and priority will be assigned toprojects that offer the greatestimprovements in wildlife habitat andpopulations and the greatest increase inopportunities for recreational use of theGulf.

BP believes early restoration will resultin measurable improvements to wildlife,habitat and recreational uses in the Gulf,says Lamar McKay, chairman andpresident, BP America Inc. “Our voluntarycommitment to this process is the best wayto get restoration projects moving as soonas possible.”

McKay says BP’s voluntary agreement toaccelerate restoration projects builds uponthe co-operative approach BP has taken inworking with Gulf communities andregulators since the Deepwater Horizonaccident in 2010.

Public participation is an important partof the NRD process, and people living incoastal communities have beenencouraged to submit ideas for earlyrestoration projects. Meetings have beenheld in every Gulf coast state to explainhow NRD works and the types of projectsthat would be considered eligible for earlyrestoration funding.

People have responded with suggestionsthat include rebuilding coastal marsh anddune habitats, conservation of sensitivehabitats, and building recreationalfacilities, such as fishing piers. BP’s website

(www.bp.com/nrda) also provides a link formembers of the public to submit theirideas to their respective states.

Restoration is not required by OPA atthis stage of the NRD assessment process.OPA directs the federal and state Trusteesto study potential damage, complete areport that identifies the injuries resultingfrom the incident, and develop restorationplans to address the identified injuries. Theprocess typically takes years to complete.

Shortly after the incident occurred, BPbegan working co-operatively with federaland state agencies to collect data needed toassess damages to natural resourcesthrough the natural resource damageassessment (NRDA) process. More than 100co-operative studies are underway toevaluate the potential for injury to all typesof wildlife and habitat in the Gulf ofMexico, and to understand baselineconditions (the condition the Gulf wouldbe in if the spill had not occurred).

BP also began discussions in 2010 witheach of the designated Trustees, to explorehow the company could accelerate therestoration process.

Under the expedited restorationframework made possible by thisagreement, and to allow restoration tobegin as quickly as possible, the Trusteeswill use the study data collected to date toidentify injuries that are evident now. Theywill propose plans to restore thoseresources at the earliest opportunity,focusing on projects that can begin in 2011and 2012. This will have the effect ofspeeding up restoration work thatotherwise likely would have been deferred,potentially for several years, while the

The final selection of projects that will beimplemented under the early restorationagreement will be a joint decision by allof the NRD Trustees and BP.

State and federal trustees are in theprocess of developing their own lists ofproposed projects that the Trustees andBP will then discuss based on severalcriteria, including the extent to whichthe proposed project will restoreresources, their cost, and the timeline forproject construction and completion.

An important criteria, Robin Bullocksays, is whether proposed projects willoffer multiple benefits to wildlife,habitat, and other impacted resourcesand services. “An example of a projectwith multiple benefits is one that createsa wetlands habitat that also provides abird habitat, and which might also havepublic use opportunities.”

Once the initial list of projects hasbeen identified, the Trustees will seekpublic input from communities acrossthe Gulf Coast.

NRD TrusteesThe NRD trustees who are party to theearly restoration agreement includerepresentatives from all five states andfederal government agencies: ● Alabama (Alabama Department of

Conservation and Natural Resources,Geological Survey of Alabama);

● Florida (Florida Department ofEnvironmental Protection);

● Louisiana (Louisiana CoastalProtection and Restoration Authority,Louisiana Oil Spill Coordinator’sOffice, Louisiana Department ofEnvironmental Quality, LouisianaDepartment of Wildlife and Fisheries,Louisiana Department of NaturalResources);

● Mississippi (Mississippi Department ofEnvironmental Quality);

● Texas (Texas General Land Office, TexasParks and Wildlife Department, TexasCommission on EnvironmentalQuality);

● The US Department of Commercethrough the US National Oceanic andAtmospheric Administration (NOAA);

● The Bureau of Indian Affairs;● US Department of the Interior (DOI)

through the US Fish and Wildlife Service;● US Department of Defense.

THE ROLE OF TRUSTEES

»

In an agreement that has been described as‘unprecedented’, ‘ground breaking’, a‘milestone’ and ‘a great step forward’, 16government agencies and BP have jointlyannounced plans for BP to provide up to $1 billion to accelerate projects to restoreareas of the Gulf of Mexico that were affectedby the Deepwater Horizon accident. This isthe largest restoration agreement enteredinto under the US Oil Pollution Act (OPA).



Gulf of Mexico>Early restoration

“Our voluntary commitment tothis process is the best way toget restoration projects movingas soon as possible.” Lamar McKay

Capturing data: many types of data wererecorded during the response, includingcollecting and examining sea turtles(below, September 2010) and testingwater quality (bottom, Dauphin Island,Alabama, May 2010). Below left,barracuda photographed close to theDiscoverer Enterprise – one of the manyvessels involved in the subsea response –in July 2010.



NRDA continues to look for evidence ofinjury.

“We know that oil reached some parts ofthe shoreline and that some resources inthe Gulf were affected. We also know thatpeople did not have access to some of therecreational areas of the Gulf Coast wherebeaches were closed and where there werefishing bans,” says Robin Bullock, NRDdirector for BP’s Gulf Coast RestorationOrganization. “The extent of those injuriesis an outstanding question, but we believethere is sufficient information to allow theTrustees to focus on the areas of knowninjury, and begin developing projects tohelp mitigate those losses.”

As part of the NRD process, federal andstate government agencies serve asTrustees for natural resources that thegovernment owns or manages for thepublic’s use and benefit. At state level,these agencies have resource managementresponsibilities for fish and wildlife, stateparks, state beaches and coastal waters,within the state’s jurisdiction.

The federal government is responsiblefor federal parks and other land owned bythe federal government, federal waters, andthe resources within them, includingmigratory birds, marine mammals, fish andother biological species that cross severaldifferent areas. For the Deepwater Horizonspill, the federal Trustees include the USNational Oceanic and AtmosphericAdministration (NOAA) and the USDepartment of the Interior.

“Each of the Trustees and BP wanted tofind a way to begin restoring the Gulf asquickly as possible. There was an incrediblesense of momentum to work co-operatively, to achieve significant,meaningful restoration of naturalresources in the Gulf of Mexico,” saysBullock. Under the agreement, data thathas been collected in the co-operativeassessment process will be used to developplans to restore impacted resources at theearliest opportunity. ■

SELECTION PROCESSProjects will undergo public review before they are funded. Priority will be assigned toprojects that offer the greatest benefits to wildlife, habitat, and recreational use. The public is invited to submit ideas for restoration projects at:http://www.gulfspillrestoration.noaa.gov/2011/05/suggest-a-restoration-idea/or at www.bp.com/nrda

Taking flight: US Fish and WildlifeService workers release more than60 pelicans, following rehabilitationat Louisiana’s Buras wildliferehabilitation facility, 27 June 2010.

Gulf of Mexico>Early restoration



WHAT TRUSTEES AND ENVIRONMENTAL GROUPSARE SAYING ABOUT EARLY RESTORATIONThe agreement was welcomed by several environmentalgroups and in a joint statement, the Environmental DefenseFund, National Audubon Society, National WildlifeFederation, Ocean Conservancy, Oxfam America, and TheNature Conservancy noted that “restoration of thesethreatened resources simply cannot wait,” and described BP’scommitment to early Gulf restoration as unprecedented:

“This milestone agreement will allow us to jump-startrestoration projects that will bring Gulf Coast marshes,wetlands, and wildlife habitats back to health after the damagethey suffered as a result of the Deepwater Horizon spill.” Ken SalazarUS Secretary of the Interior

“One year after the largest oil spill in our history, we take amajor step forward in the recovery of the Gulf of Mexico, for theenvironment and the people who depend on it for theirlivelihoods and enjoyment.” Jane LubchencoUS Under Secretary of Commerce for Oceans and Atmosphereand NOAA administrator

“Ecosystem restoration is vital to the economic vitality of theAlabama Gulf Coast. Obtaining funding for these restorationprojects is a major step forward in addressing the oil spill’sdamage to our precious natural resources.”Robert BentleyGovernor of Alabama

“Florida will be able to use this early restoration money to initiategreatly needed environmental restoration projects. Because wehave worked diligently to assess the environmental damageresulting from the spill, we are well positioned to be able toquickly begin performing important restoration projects, and useFlorida’s share of the early restoration funds to assist our coastalcommunities with their continued recovery from the spill.”Herschel VinyardSecretary, Florida Department of Environmental Protection



London 2012 Olympic & Paralympic Games

High hopes: William Sharmanat the Aviva World Trials andUK Championships, AlexanderStadium, Birmingham, UK, 11 July 2009.

BP is supporting six British athletes as they prepare for the London 2012Olympic and Paralympic Games. The 110-metre hurdler, William Sharman,began his career in the multi-event discipline, the decathlon, but laterchose to concentrate on the sprint hurdles and made his Team GB debut in2006. Away from the track, he is a trained classical pianist and cornetplayer, and a former member of the BBC Youth Orchestra. He has amaster’s degree in banking and finance, while he also appearedon the small screen as the timekeeper in the UKtelevision show, Gladiators.

WILLIAMTHE CONQUEROR

➔ BP in partnership



Report> Amanda BreenPhotography> Richard Davies & Action Images

WILLIAM SHARMANSport: athleticsEvent: 110-metre hurdlesAge in 2012: 28 Main achievements: silver medal in XIXCommonwealth Games2010, in Delhi; personalbest performance inMadrid at 12.9 seconds(wind assisted), in July2010; and fourth place atthe 12th IAAF WorldChampionships, in Berlin,in 2009.



On the countdown toLondon’s openingceremony…

The excitement around theOlympic Games hasdefinitely increased here inthe UK, and when wereached the ‘year to go’mark this summer, it was apublic milestone. But forathletes, the milestones inour careers are the majorchampionships and onceyou’ve cleared one of thosecompetitions, then you seethe next. This year, hasbeen all about the WorldChampionships in Daegu,South Korea. Once they’reover, everyone will turntheir thoughts to London[BP Magazine went to pressjust as the WorldChampionships began].

What I’m looking forwardto most about next year isthe sense of familiarityand the support thatcomes from competing athome. It’s the feeling thatyou’re not there fightingon your own, you’ve gotthe whole nation behindyou. I don’t think that canbe emphasised enough,how much it helps.Looking back in history, thehome nation has alwaysexceeded expectations,because of that support.

Silver medallist: at the AvivaBritish Grand Prix, GatesheadStadium, 31 August 2009.Sharman finished second.



On performing in astadium in front ofthousands…

There’s plenty to learnfrom competing at the bigcompetitions, where yourace in huge venues andthrough several rounds.For me, the lessons havebeen about how to dealwith those early races andhow I warm up. I also thinkthe experience you takeaway comes from the sizeand capacity of thestadium – once you’ve hada taste of it, on the nextoccasion, you’re not in somuch awe of the roars andscreams of the crowd,because you’ve seen itbefore.

everyone to participate inthese Games. I’ll be showingthe movie to my little boy tosee whether he likes it; he’sonly two, so it might be touchand go as to whether he’ll sitstill for the half hour!

Tracing the Olympic Gamesback to their origins, for theGreeks, it wasn’t just aboutsport – arts and culture weremajor parts of the event aswell. I think it’s vital todevelop this aspect in themodern Games, and throughthe activities of the CulturalOlympiad, we involve morepeople. The Olympic Gamesare the biggest sporting eventin the world and by creating alegacy through art andculture, we’re opening up to awider audience – it’s not justfor sports fans, but foreveryone.

It was really an honour to beinvolved with the Tate MovieProject as The Itch of the GoldenNit is a Guinness WorldRecord holder, with the mostindividual contributions to ananimated film. The fact thatit has been made by childrencaptures the essence of theCultural Olympiad – allowing

On why the Cultural Olympiad is important…

Competitive spirit: Sharman (left) races Terrence Trammell of the US (centre) and RyanBrathwaite of Barbados at the Berlin World Athletics Championships, 20 August 2009. Below,Sharman (left) is pictured with fellow British winners Andy Turner (centre) and LawrenceClarke (right) at the Commonwealth Games in New Delhi, 8 October 2010.



On having other sports professionals in the family…

My older brother, Richard, is a bobsledder and pushes for Team GB, and my dad, David, playedrugby for Northampton Saints. I found that having other members of the family involved in theworld of sport has meant that everyone is always very understanding of what is required tomake it to the top of your game – things like needing early nights and a good diet. I’ve alwayshad people at home who understand what you go through with the various trials andtribulations in sport.

I first got into athletics at school, but as the curriculum was limited, I developed by visiting the localathletics club with Richard. His enthusiasm for track and field was passed on to me and I neverlooked back. At first, I was a high-jumper and then moved into multi-events. I think it’s importantfor children at a young age to try a whole array of events, to see where their talents will lie.


BP AND LONDON 2012As the official oil and gas partner for the London 2012 Olympic and Paralympic Games, BP willprovide fuels and engine oils for more than 5,000 official vehicles, as well as bottled gas for cateringfacilities at venues. BP is also a sustainability partner, with a key role in creating a lasting legacyafter the Games end. Advanced fuel options will help power the Games’ fleets and vehicle carbonemissions will be offset by BP’s Target Neutral programme.

Arts, culture and education have played important parts in the Olympic movement since itsfoundation in ancient Greece. Through BP’s role as a premier partner of the London 2012 CulturalOlympiad, it continues the long-time support of these areas, during events such as the London2012 Open Weekend and the Tate Movie Project.

● Further details of BP’s London 2012 activities can be found at www.bp.com/2012

On how BP’s support makesa difference…

It’s a huge advantage for meto have BP’s support; not onlydoes it increase my profile asan athlete, but it alsoprovides me with manyopportunities. Knowing thatyou have a solid brandbehind you makes adifference, so when I step outon the line, I’m not just doingit for me, but for a wholeteam of people. They aregenuinely interested in myprogress and how I’mperforming. I also considerBP’s fuel support and theoffsetting of my carbonemissions to be invaluableassets.


Cultural connections: Sharmanraces Dayron Robles of Cuba at theWorld Athletics Championships inBerlin, 20 August 2009 (opposite).Below, Sharman is interviewed byAndy Akinwolere from the Tate MovieProject during the Open Weekend.


Photography BP Archive

SHIPPING OUTARCHIVE

This year marks the 60th anniversary of the first evacuation ofBP’s – then known as the Anglo-Iranian Oil Company – Abadanrefinery. Located in Iran, the refinery was the world’s largest oilprocessing plant. An entire community had sprung up aroundthe site, with BP building some 21,000 staff homes. However, in1951, Iran nationalised its oil facilities and all expatriateemployees had to leave, with the last 10 men shipping out on 4October 1951. It would be three years before BP returned to thecountry and production resumed.




Opposite: British staff leave Abadan in October1951. Some 268 people were transported toBasra in Iraq onboard HMS Mauritius, beforebeing flown back to England. Around 300employees from India and Pakistan sailed forhome on a steamship. Above: locals remove anilluminated sign at Anglo-Iranian’s informationoffice in Tehran, June 1951. Left: papersconcerning the employment of John Law Gibb, amember of staff at Abadan. Below: stafffamilies return to England, June 1951.



ARCHIVE

Top left: a commemorative tankard belonging to Mr D.R.Y Gibson – one of the last 10 people toleave Abadan. This group became known as the ‘Sixty-Six Pounders’, after their evacuation baggageallowance. The tankards were inscribed with quotes from BP management, the British governmentand the Prime Minister of Iran. The cutting above the tankard is from the February 1953 edition ofThe BP Magazine about Mr Gibson. Above: David Gibson photographed in Iran. He is seen crossing ariver by raft with three local Iranians. Below: staff gather at the Gymkhana Club in Abadan, beforeboarding HMS Mauritius. Below left: more papers from John Law Gibb, this time a letter from theNational Iranian Oil Company requiring him to leave the country by 4 October 1951.



Main image: changing the plaqueat the entrance to the company’sheadquarters at Britannic House,London, December 1954. The Anglo-Iranian Oil Company was nowknown as British Petroleum.



Numbers game

Photography> Marc Morrison

Parting shot

BP Magazine photographerMarc Morrison visited theMassachusetts Institute ofTechnology (MIT) campusfor the feature on BP’suniversity partnerships(page 20). While there, hephotographed Spanishsculptor Jaume Plensa’sAlchemist, currently onloan to the university aspart of the celebrations to mark its 150thanniversary. Specificallycommissioned for thecommemorations by ananonymous MIT alumnus,the piece is formed ofnumeric symbolsarranged in human form.Plensa created Alchemistas a homage to all theresearchers and scientistswho have contributed to scientific andmathematical knowledge.

BP_MAG_SD371_70.qxd:Layout 1 30/8/11 12:45

BP Magazine was printed using vegetable based printinginks and low alcohol damping on press. The paper was

manufactured using 50% de-inked post consumer wastefibre and 50% virgin fibre pulp sourced from well managed

forests at a mill accredited for EMAS, ISO14001 and FSC.

BP p.l.c Chertsey Road

Sunbury-on-Thames Middlesex TW16 7LN

United Kingdomwww.bp.com/bpmagazine

The next edition of BP Magazine will be out in January 2012.

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Publication: BP Internal Mag

Artworker: Proof: DATE:HL 1 22.08.11

Page 1FONTS: Univers LT Std

Stef Reid, Runner

At BP, we’re dedicated to fuelling the success of the 2012 Olympic Games in London. We’re supporting athletes

like Stef Reid and also working to provide some of the official vehicles with advanced, lower carbon fuels made

from energy grasses. Find out more at bp.com/2012

London 2012. Fuelling the Future.

Providing advanced biofuels for London 2012.

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