BP Annual Report and Form 20-F 2011 - Company Reporting

Our current strategic priorities are set out in our 10-point plan (see pages38‐39). Among other things, this aims to target investments and disposalsefficiently, renew and reposition our portfolio and deliver our major projects toplan. As part of managing the risks to delivery of the 10-point plan we conductregular planning and performance-monitoring activity, including the planningof disposals; we focus on the delivery of major projects; and we pursue thedevelopment of continued technological advances and innovation.The diverse locations of our operations around the world exposes us to awide range of political developments and consequent changes to the economicand operating environment. For example, our investments in Russia could beadversely affected by heightened political and other environment risks. As such,we try to actively manage our relationships in Russia, including with the Russianfederal government and with TNK-BP. We also seek to manage the group’sexposure in Russia through our development of BP’s overall portfolio.Many of our major projects and operations are conducted through jointventures or associates and through contracting and sub-contracting arrangementswhere BP may not have full operational control. We seek to manage such jointventure and contractor relationships actively, and this may include monitoringcompliance with applicable standards.As a result of the Deepwater Horizon oil spill there is significant uncertaintyregarding the extent and timing of costs and liabilities relating to the incident,the impact of the incident on our reputation and the resulting possible impact onour licence to operate including, among other things, our ability to access newopportunities. In addressing these risks we seek to co-operate with investigatorsand we encourage the application of responsible and objective scientific analysisin determining outcomes. We always seek to comply with local regulations and,in some cases, our required practices will exceed regulations if our assessmentof the operating risk indicates it would be beneficial to do so. We seek to engagewith local communities in order to foster improved relationships and reputation.Business review: Group overviewLeft Bernard Looney, BP’sExecutive Vice President,Developments, on boardthe Deep Ocean Clarionrig in Brazil.Above Work at BP’sTangguh facility, WestPapua, Indonesia; wheregas is collected anddistributed to energymarkets via ship.BP Annual Report and Form 20-F 2011 45