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

Business reviewPromoting tourism along the Gulf CoastTo support economic restoration in the impacted Gulf Coast communities,BP entered into three-year agreements with the states of Alabama, Florida,Louisiana and Mississippi to promote tourism, monitor seafood safety andpromote Gulf seafood.During 2011, BP made commitments of $92 million in total overthree years to support tourism promotion within the four affected states.This is in addition to $87 million in tourism grants provided by BP in2010. Each state is using its tourism funds to develop specific marketingprogrammes.The proposed settlement announced on 3 March 2012 with thePlaintiffs’ Steering Committee in MDL 2179 includes a fund to supportcontinued advertising that promotes Gulf Coast tourism.Seafood testing, monitoring and promotionFederal and state officials continue to collect and test seafood from theGulf of Mexico, and the results of these tests have indicated that Gulfof Mexico seafood meets the US Food and Drug Administration (FDA)safety guidelines. The National Oceanic and Atmospheric Administration(NOAA) and the FDA are conducting widespread scientific evaluation ofseafood samples to protect and reassure consumers. Since May 2010,more than 6,000 seafood samples have been collected by the FDA, NOAA,and state agencies in Louisiana, Mississippi, Alabama, and Florida. TheFDA has also visited over 100 seafood processors and wholesalers acrossthe Gulf Coast, collecting seafood samples and inspecting processingplants for biological, chemical, and physical hazards. Levels of residues ofoil contamination in seafood have consistently tested between 100 and1,000 times lower than the safety thresholds established by the FDA.Test results from NOAA, the FDA, and the Gulf of Mexico states arepublicly available.Recreational fishing showed signs of recovery in 2011. To raisepublic awareness of Gulf of Mexico seafood, BP has committed $34 millionfor Gulf of Mexico states to conduct seafood testing and $48 million tomarket Gulf of Mexico seafood.Rig Worker Assistance FundBP established a $100-million Rig Worker Assistance Fund through theBaton Rouge Area Foundation (the Foundation) to support unemployed rigworkers experiencing economic hardship as a result of the moratorium ondeepwater drilling imposed by the US federal government. In 2011, theFoundation awarded $5.8 million to an expanded pool of applicants, afterawarding $5.6 million to nearly 350 rig workers in 2010. With less than2,000 applying for funds, the Foundation granted $18 million of the BPcontribution to community-based organizations through its Future for theGulf Fund. At the end of 2011, the Foundation was assessing additionalfunding requests from organizations assisting those impacted by the spill,and has said it hopes to complete the distribution of the BP contribution bythe end of 2012.Environmental restorationWe made progress during 2011 on multiple fronts as part of theongoing efforts to assess and address injury to natural resources in theGulf of Mexico.We continued to support and participate in the Natural ResourceDamages (NRD) process. Work has been completed or is under way onmore than 150 cooperative studies with federal and state agencies togather data on potential impacts and injuries to birds, turtles and mammals;fish and shell fish; near shore and shoreline habitats; and the Gulf ofMexico water column and sediment.We also worked with the Natural Resource Damage Assessment(NRDA) trustees to begin assessing the potential lost human use of theseGulf Coast natural resources. Additional studies focused on the potentialimpacts on historical and archaeological resources and endangered species.During the year we also supported two emergency restorationprojects and made a major commitment to fund early restoration projects.In addition, the National Fish and Wildlife Foundation funded severalprojects during 2011 using funds provided by BP in 2010 from the sale ofoil recovered from the spill.We are working with NOAA to prepare and provide access tosummaries of the studies completed and data gathered during thecooperative assessment process. We also prepared and participated in avariety of scientific publications and seminars as part of our efforts to sharelearnings from the oil spill as broadly as possible.NRD process under wayIn 2011, we continued to work with scientists and trustee agenciesthrough the NRD process to identify natural resources that may havebeen exposed to oil or otherwise impacted by the incident, and to look forevidence of injury.As part of the NRD process, trustees from each state and thefederal government held a series of public meetings during 2011 in each ofthe five states affected by the Deepwater Horizon oil spill. Thesefocused on the status of potential injury assessments and of potentialrestoration process. To date, BP has paid over $600 million for NRDassessment efforts.Public comments were collected as part of the ProgrammaticEnvironmental Impact Statement (PEIS) process, which will inform one ofthe core planning documents for restoration. A final PEIS is scheduled tobe released by the trustees in late 2012.Emergency restoration projectsEmergency restoration projects are defined under the Oil Pollution Act of1990 (OPA 90) as preventative measures or actions undertaken to stopcontinuing injuries to resources and to mitigate potential effects of thespill. During 2011, two emergency restoration projects were completedalong the Gulf Coast in support of birds and turtles. A third project is in theplanning phase for submerged aquatic vegetation and is scheduled to beimplemented in 2012.Early restoration projectsUnder an agreement signed with federal and state trustees in April 2011,BP voluntarily committed to provide up to $1 billion to fund projects thatwill accelerate restoration efforts in Gulf Coast areas that were impacted bythe Deepwater Horizon oil spill.The agreement enables work on restoration projects to begin atthe earliest opportunity, before all of the studies under the NRDA processare complete, and before funding is required by OPA 90. Priority will beassigned to projects aimed at improving areas that offer the greatestbenefits to wildlife, habitat, and recreational use that were impacted as aresult of the incident.In December 2011, state and federal trustees unveiled the first setof early environmental restoration projects that are proposed for fundingunder the agreement. The eight proposed projects are located inAlabama, Florida, Louisiana and Mississippi. Collectively, the projects willrestore and enhance wildlife, habitats, the ecosystem services providedby those habitats, and provide additional access for fishing, boating andrelated recreational uses. More early restoration projects are anticipated inthe future.Funding for the early restoration projects will come from the$20-billion Trust. Additional information about the projects, projected costsand proposed credits can be found on the NOAA website.Environmental studies and reportsBP is committed to sharing and providing access to the numerous studiesand reports generated during the course of the response. In total, sinceMay 2010, more than 150 NRDA studies have been completed or are inprogress throughout the Gulf. As the studies are completed, summariesare expected to be published as appropriate either on BP’s website or ongovernment websites. Our website also contains numeroustechnical reports and documentation on a variety of environmental andhealth-related topics.National Fish and Wildlife Foundation projectsIn 2010, BP donated $22 million from the net revenue of the sale of oilrecovered from the spill to the US National Fish and Wildlife Foundation(NFWF) which used the funds to quickly implement several conservationprojects along the Gulf Coast.In 2011, the NFWF announced that it issued $6.9 million ingrants from the Recovered Oil Fund for Wildlife for 22 new projects. The78 BP Annual Report and Form 20-F 2011