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

Our performanceIn the UK North Sea, we announced plans for investments totalling approximately$14 billion – with our partners – in major new project developments.In Iraq, working with our partners in the Rumaila Operating Organization,we met a major milestone in reaching initial production targets agreed for theRumaila field.Refining and MarketingReplacement cost profitbefore interest & tax aFuelsLubricantsPetrochemicalsBP average refining marker margin ($/bbl)$ billion $/bbl1086420-22007 2008 2009 2010 2011aSee Financial statements – Note 6 on page 200.See also Financial and operating performance onpage 94.201612840Refining and MarketingReplacement cost profit before interest and tax for 2011 was $5,474 millioncompared with $5,555 million in 2010. Strong refinery operations enabled us tocapture the benefits of BP’s location advantage in accessing WTI-based crudegrades and, compared with 2010, the result also benefited from a higher refiningmargin environment and a stronger supply and trading contribution. Thesebenefits were partly offset by a significantly higher level of turnarounds in 2011than 2010 and negative impacts from the increased relative sweet crude prices inEurope and Australia, primarily caused by the loss of Libyan production, and theweather-related power outages in the second quarter. See Refining and Marketingon page 94 for further information on the segment’s financial results.Operating performance was strong, with Solomon refining availability of94.8% and utilization rates above the industry average. We made significantprogress on the modernization of our Whiting refinery in the US, which is expectedto come onstream in the second half of 2013. This project will significantly increasethe capability of the refinery to process heavy crude and provide it with access tocrude from the Gulf of Mexico, the mid-continent US and Canada.We achieved strong performance in our lubricants business, despitea difficult marketing environment and increasing base oil prices. In ourpetrochemicals business we received local government approval for our proposed1.25 million tonnes per annum purified terephthalic acid (PTA) plant in Zhuhai,China, and are now seeking final central governmental approval.Left Air BP is one ofthe world’s largest andbest‐known aviationfuels suppliers.Above The SECCOfacility is BP’s singlelargest investment inChina and has a capacityof 3.2 million tonnesof petrochemicalsper year.50 BP Annual Report and Form 20-F 2011