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

Business reviewour review of all the plans, we are introducing additional requirements toenhance the mitigation of similar risks across our refining business.Operational planning and controlsEach BP-operated entity develops an annual plan drawing on the outputfrom the performance improvement cycle including the risk managementprocess. The plan is prioritized with the aim of continually driving reductionsin the level of risk at the sites. We plan our work taking account of thecapacity needed to deliver the safety-related activities required.Control of work has been an area of major focus in our refiningbusiness since 2008. We continue to see improvement in the executionof our maintenance planning, scheduling and work activities across ourrefining sites as the overall control of work process is better understood,learning shared and efficiency opportunities identified.Competence and capabilityRefinery leaders are experienced operations professionals with manyyears’ experience within the industry and have typically attended the BPOperations Academy. Each refinery, with S&OR direction and expertise,is developing a consistent competency framework against which safetycritical roles are assessed. The US refineries completed process safetycompetency assessments of over 3,500 employees in safety-critical rolesand developed gap closure plans in 2011.A key element within this competency development plan is thedevelopment of high fidelity process simulators. These will be used to trainoperators via simulations to respond to low probability, high consequencescenarios, similar to methods used with airline pilots.Measurement, evaluation and corrective actionRegional vice presidents conduct performance reviews at each refinery.We now use a set of common safety metrics that are standard across allsites to help us proactively identify opportunities for improvement.A quarterly assurance process has been introduced to enable S&ORto develop an ongoing, independent view of OMS conformance by thesites. Each site is assessed on their OMS self-assessment processes, thestrength of existing risk mitigations and progress on risk reduction plans.Periodic S&OR audits against OMS requirements provide valuable insightsfrom experts outside the site and result in actions to close identified gaps.In 2011, we strengthened and standardized our approach toincident learning in our refining business, issuing briefings and alertson lessons learned from incidents and near misses and requiring eachrefinery to assure that similar risks are assessed and appropriate actionscompleted.Reports of the US refineries’ Independent ExpertL. Duane Wilson was appointed in 2007 by the board as an IndependentExpert to provide an objective assessment of BP’s progress inimplementing the recommendations of the BP US Refineries IndependentSafety Review Panel (the Panel) aimed at improving process safetyperformance at BP’s five US refineries. Mr Wilson is expected to deliverhis fifth annual report in April 2012, and BP will publish it at bp.com/independentexpert. As in prior years, BP will have an opportunity to reviewand comment on Mr Wilson’s draft report for factual accuracy, but he issolely responsible for the report’s ultimate content.The Independent Expert conducts his assessment of BP’simplementation of the Panel’s recommendations both through samplingand in-depth monitoring, evaluation and confirmation. Mr Wilson visitedeach BP US refinery at least twice in 2011 and interviewed personnel atmany levels in the organization. He also engaged regularly with senior andexecutive management, both within Refining and Marketing and our safetyand operational risk function, to gauge implementation progress. Mr Wilsonalso reviews progress reports and other documentation from BP. Theseinclude implementation status reports, process safety performancereports, overtime reports (to monitor the potential for worker fatigue), openand overdue process safety action item reports, incident investigationsreports and safety audit reports.Mr Wilson reports to the board through the chairman of BP’s safety,ethics and environment assurance committee. In addition to an annualwritten report, he makes periodic oral reports of his observations tothe committee, in which he gives status updates on BP’s progress inimplementing the Panel’s recommendations.Safety performanceOil spills and loss of primary containmentWe monitor the integrity of our operations, tanks, vessels and pipelinesused to produce, process and transport oil and other hydrocarbons – withthe aim of preventing the loss of material from its primary containment.Accordingly, we record losses of material, including hydrocarbons, from ourassets, and losses or spills that reach land or water.The loss of primary containment metric below includes unplannedor uncontrolled releases from a tank, vessel, pipe, rail car or equipmentused for containment or transfer within our operational boundary, excludingnon-hazardous releases such as water.The US government and third parties have announced variousestimates of the flow rate or total volume of oil spilled from the DeepwaterHorizon incident. The multi-district litigation beginning in 2012 in NewOrleans will address the amount of oil spilled. See Financial statements –Note 36 on page 233 for information about the volume used to determinethe estimated liabilities.Loss of primary containment and oil spills (excluding DeepwaterHorizon oil spill in respect of 2010 volume)2011 2010 2009Loss of primary containment –number of all incidents a 361 418 537Loss of primary containment –number of oil spills b 228 261 234Number of oil spills to land andwater 102 142 122Volume of oil spilled(thousand litres) 556 1,719 1,191Volume of oil unrecovered(thousand litres) 281 758 222a Does not include either small or non-hazardous releases.b Number of spills greater than or equal to one barrel (159 litres, 42 US gallons).Process safetyBP uses a disciplined framework for managing the integrity of hazardousoperating systems and processes. We apply a combination of good designprinciples, engineering, and operating and maintenance practices to helpdeliver process safety performance and we monitor the number of processsafety events occurring across our operations. The recently introducedAmerican Petroleum Institute RP-754 standard, which sets out leadingand lagging process safety indicators, organized into different tiers is usedas the basis for our internal process safety-related reporting. API tier 1process safety events are the losses of primary containment of greatestconsequence – causing harm to a member of the workforce or costlydamage to equipment, or exceeding defined quantities. Seventy-four tier 1process safety events were reported in BP in 2011.Personal safetyBP reports publicly on its personal safety performance according tostandard industry metrics. In 2011, our overall reported recordable injuryfrequency (RIF) was 0.36, compared with 0.61 in 2010 and 0.34 in 2009.Our reported day away from work case frequency (DAFWCF) in 2011was 0.090, compared with 0.193 in 2010 and 0.069 in 2009. The 2010group personal safety data was affected by the Gulf Coast response effort.68 BP Annual Report and Form 20-F 2011