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BPMAGAZINETHE INTERNATIONAL MAGAZINE OF THE BP GROUP ISSUE 4 2011

FIRSTCLASSSERVICEBP Magazine reports on one of thecompany’s oldest businesses,learning more about Air BP’s long-standing relationships andits plans for the future.

32 SPOTLIGHT: AIR BP

08 BOWMAN’SCOUNSEL BP director talks safety

22 GAS GIANT Next stage forShah Deniz

48 TAKING THE LEAD BP supportsyoung leaders

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BP MAGAZINEThe international magazine of the BP Group – ISSUE 4 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 ImagesMagic TorchHeart AgencyDebut ArtRex FeaturesCorbis

Welcome. The founder of the US nuclear navy,Admiral Hyman G. Rickover, once said, “Youdon’t get what you expect. You get what youinspect.” According to Admiral Frank ‘Skip’Bowman, a former director of the nuclearsubmarine and carrier fleets and now non-executive director of BP, it is a principle that BP isnow implementing throughout its businesses.He talks about his 38-year career in the US Navyand its legendary reputation in the world ofsafety and risk management (page 8). He’s notthe only one with a long career behind him. Onpage 32, we find out why Air BP is still a giant inits field, 85 years after it first fuelled a deHavilland Tiger Moth flight from the UK toIndia. Elsewhere in the magazine, we review theactions BP has taken this year to implement itsstrategic priorities (page 15) and we visitAzerbaijan (page 22) to learn more about plansfor the full field development of the giant ShahDeniz gas field. Teamwork features prominentlyin this issue, too, with BP’s head of Production,Bob Fryar, and Olympic athlete Lizzie Armitsteadsharing their thoughts on what it means to workas a group. Lisa Davison> Editor

contents / issue 4 2011

© BP p.l.c., 2011

+ Features

08 Safe hands Skip Bowman, one of BP’s non-executive directors,talks about his 38 years in the US Navy, and what safety means to him.By David Vigar Photography by Graham Trott

15 Turning point A summary of the work BP has done in 2011 onsafety, restoring trust and pursuing growth in shareholder value, aswell as its 10-point plan for the future. Photography by BP Imageshop

22 High rise The Baku skyline is changing rapidly, thanks to therevenues being generated by Azerbaijan’s oil and gas industry. BP’s rolein that is about to expand, with plans to develop the full Shah Denizgas field. By Amanda Breen Photography by Mehmet Binay & Stuart Conway

Cover story

32 Flying high How Air BP is reinforcing its long-standingcustomer relationships as part of a focus on ‘disciplined growth’.By Nick Reed Photography by Aaron Tait & Richard Davies

40 Team player The head of BP’s upstream Production division, BobFryar, talks about leading his team and why it’s important for people tospeak their minds. By Lisa Davison Photography by Simon Kreitem, ChrisMoyse, Richard Davies, Marc Morrison, Stuart Conway & Kjetil Alsvik

48 Leading the way Meet a few of the young people taking partin the BP-supported Young Leaders programme in the run-up to theLondon 2012 Olympic and Paralympic Games. By Amanda BreenPhotography by Richard Davies

54 Banking on BP Having weathered the economic storm of 2008and the financial challenges following the Deepwater Horizonaccident, BP’s Treasury team is in a strong position to face growingglobal uncertainty. By Helen Campbell Illustration by Alex Williamson

58 Digital age The team of people dedicated to bringing newtechnologies into the company to help other parts of the business dotheir job more effectively. By Jaclyn Clarabut Photography by HarrisonMcClary, Richard Davies & Marc Morrison

64 Cycle diaries Road and track cyclist Lizzie Armitstead talks aboutpreparing for London 2012, working as a team, and the renaissance inBritish cycling. By Amanda Breen Photography by Action Images

70 Social network The Petroleum Society of Great Britain is asold as the UK’s North Sea industry itself and, with a new breed ofyoung geologists getting involved, its future looks very healthy indeed.By Helen Campbell Illustration by Jason Ford

+ Regulars

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

06 Science made simple Extracting hydrocarbons and turningthem into useful products is what BP does every day, but ever wonderhow the oil and gas forms in the first place? By Nic Welsh Illustration by Magic Torch

20 Viewpoint Inside BP’s Houston monitoring centre. Photography by Rocky Kneten

74 Archive A look at some of Air BP’s historical moments over thepast 85 years. Photography by the BP Archive

78 Parting shot Building a traditional mudhif at the giantRumaila field. Photography by Ian McGregor

Cover image: Air BP’s Michael Rodda replenishes a customer’sBeechcraft King Air during the last light of the day, Brisbane,Australia. Photograph by Aaron Tait

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48 Flying highTommy Seagull and threeother young people talkabout their experiences inthe BP-supported YoungLeaders programme.

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UK

US

Japan

Brazil

Eygpt

Netherlands

Canada

For the recordHighlights from around the globe > Winter 2011

the quarter in numbers

3The number of gasdiscoveries BP has nowmade in the North El Burgoffshore concession inEgypt’s Nile Delta.

32,650 sq kmThe total acreage that BP now has in Angola,following new access tofive more deepwaterexploration andproduction blocks.

$1 millionThe prize money for TheQueen Elizabeth Prize forEngineering. BP is one of12 companies backing thenewly-createdinternational award.

$1.67 billionThe amount that PlainsMidstream Canada is topay BP for its Canadiannatural gas liquidsbusiness.

BP and its partners are todevelop four new oil andgas projects in the UK’s oilindustry that have acombined total investmentof almost £10 billion. Thework will take place overthe next five years and willhelp maintain BP’sproduction from the NorthSea for decades to come. At

a press conference at BP’soffices in Aberdeen,Scotland, the UK primeminister, David Cameron,announced that the UKgovernment has granted BPand its partners – Shell,ConocoPhillips andChevron – approval toproceed with the £4.5 billion Clair Ridge

UK: North Sea investment

04 Issue 4 2011 BP MAGAZINE

project, the second phase ofdevelopment of the giantClair field, west of theShetland Islands. “I amdelighted to give the go-ahead for this project; thisinvestment is great newsfor Aberdeen and thecountry, and provides amassive boost for jobs andgrowth.”

Major investment: BP’s BobDudley (centre left) and theBritish Prime Minister DavidCameron (centre right) at BP’soffices in Aberdeen, Scotland.

“I am delighted togive the go-aheadfor this project; thisinvestment is greatnews for Aberdeenand the countryand provides amassive boost forjobs and growth.”David Cameron

BP MAGAZINE Issue 4 2011 05

US Permit approval BP has been awardedpermits to resume pluggingand abandonmentactivities in the Gulf ofMexico. It has also obtaineda permit to drill a newappraisal well at theKaskida prospect. Drillingbegan in November.

Global Board appointmentBrian Gilvary (above) hasjoined the BP board andbecome the company’s newchief financial officer(CFO). He succeeds ByronGrote, who first took theposition in 2002. Gilvaryhad been BP’s deputy groupCFO and head of financefor almost two years. Grote,meanwhile, will take up anew role as executive vicepresident of corporatebusiness activities. He willalso continue as a memberof the board.

USClaims settlement BP has reached agreementwith Cameron InternationalCorporation, the designerand manufacturer of theDeepwater Horizonblowout preventer, to settleall claims between thecompanies related to theDeepwater Horizonaccident and spill. Underthe settlement agreement,Cameron will pay BP $250 million. BP will

immediately apply thepayment to the $20 billiontrust it established to meetindividual, business andgovernment claims, as wellas the cost of the naturalresource damages. See page15 for more on BP’sactivities throughout 2011.

US Asset sale BP has agreed to sell itsinterests in the Pompanoand Mica fields in thedeepwater Gulf of Mexicoto Stone Energy Offshore.Under the agreement,Stone Energy will pay BP$204 million in cash. Theagreement includes the saleof BP’s 75%-operatedworking interest (WI) inthe Pompano field andassets, and 50% non-operated WI in the Micafield, together with a 51%-operated WI in MississippiCanyon block 29 andinterests in certain leaseslocated in the vicinity ofthe Pompano field.

JapanDream partnershipJapan’s largest airline, AllNippon Airways (ANA), is touse BP’s turbine lubricantsfor the engines andauxiliary power units on its

new Boeing 787 Dreamlineraircraft. ANA is the world’sfirst commercial customerfor Boeing’s new aircraft,having taken delivery inSeptember 2011 of the firstof 55 planes ordered.

BrazilAppraisal successBP has lodged a ‘notificationof discovery’ with theBrazilian National Agencyof Petroleum for the Itaipu-2 pre-salt appraisal well,located in the deepwatersection of the Camposbasin. The well, locatedapproximately 130kilometres (80 miles)offshore Brazil, was drilledto a total depth of 4,877metres (16,000 feet) in 1,420 metres (4,660 feet)water depth.

UK Cultural partnershipsBP has renewed andextended its long-standingpartnership with four ofthe UK’s major culturalinstitutions – the BritishMuseum, the NationalPortrait Gallery, the RoyalOpera House, and TateBritain. In total, BP willinvest almost £10 millionin the four partnershipsover the next five years.

USWind dealBP Wind Energy has signedwind turbine supply andmaintenance agreementstotalling more than $750 million to continuegrowing its wind portfolioin the US. A total of 350wind turbine units will bedelivered to BP projects.Once operational, theadditional turbines willhave a combined powergeneration of 560megawatts (MW). Some 88turbines will be deliveredto BP’s Mehoopany windfarm located on a 3,640-hectare site in WyomingCounty, Pennsylvania.

BrazilAir expansionAir BP is expanding itsBrazilian footprint with thepurchase of aviation fuelassets at seven Brazilianairports from Shell BrasilHolding BV and Cosan SAIndústria e Comercio foraround $100 million. Oncompletion, Air BP will bepresent at 18 Brazilianairports which togetheraccount for some 66% ofaviation fuel demand inBrazil. For more on Air BPsee page 32.

➔ science made simple

In formation

il and gas are produced fromorganic matter that has beenconcentrated and preservedwithin specific layers ofrock, referred to as ‘source

rocks’. The organic matter is commonlyknown as kerogen, which has manydifferent forms, depending on theenvironment in which it was deposited.Most oils come from algal and marineplanktonic remains that are deposited inanoxic conditions (see glossary), ensuringtheir preservation. Most gases are derivedfrom terrestrial plant matter that has beendecomposed by bacteria and fungi undersuboxic conditions.

In order to generate oil and gas, theorganic matter must then be ‘cooked’. Thisprocess breaks down the kerogen intohydrocarbons. Cooking the materialrequires time and a rise in temperature,which is achieved by burying the sedimentsbelow the ground surface. Typically, thefirst oil is expelled from the source rocks ata temperature of 100ºC (210ºF). As thetemperature rises, the fluids expelled evolveinto progressively lighter oils, then gas.

As hydrocarbons are generated, theymigrate out of the source rocks towardsother rock layers. In general, they moveuphill through porous and permeablerocks (reservoirs). In some instances, theywill keep rising until they seep out ontothe ground surface. Indeed, humans haveused oil from these natural seepages forcenturies. Many ancient religions, such asZoroastrianism, incorporate the fires ofnaturally ignited seeps into theirceremonies and beliefs. More recently, BP’s

first discoveries in Iran were made, in part,following investigations based on naturalseeps in the Zagros Mountains.

Often, though, the hydrocarbons hit animpermeable rock layer, known as a ‘seal’,and sometimes the combined geometry ofthe seal and reservoir forms a trap (seeglossary) – some form of upside-down bowlthat prevents the hydrocarbons from risingfurther.

So, what does a reservoir look like? It is,in fact, rock with millions of tiny holes – orpores – that fill with oil and gas. Thesepores act as storage spaces. The type of rockin the reservoir will determine the rock’sporosity and a reservoir can look likeanything from a chunk of airport runway –in other words, extremely compacted, withmicroscopic pores – to coarse sandstone,with pores that are visible to the naked eye.

This variation is caused by the grainsizes within the rock and by the depth atwhich the reservoir rock is buried. Thedeeper the rock, the higher thetemperature and pressure, causing the rockto compact, and cement to form betweenthe grains.

The nature of the reservoir’s pores, or,more precisely, how connected they are –its permeability – is important when itcomes to removing the hydrocarbons fromthe subsurface. The size of the poresdetermines the rock’s ability to store oiland gas, while the permeability determinesthe rate at which oil and gas will flow fromthe rock into a wellbore.

A geologist’s job is to create a picture ofwhat is underground in order to makeinformed decisions on where the oil and

gas might lie, and where best to drillexploration wells. The trouble is, it can be abit like sitting on the top floor of a high-risebuilding and trying to determine wheresomeone is sitting several floors below. Youmay have an idea of the general floor plan,and you may predict that your target ismore likely to be sitting at a desk thanstanding at the coffee machine, butwithout actually visiting the floor, you’llnever know for sure. Technology hasplayed a vital role in helping geologists, notleast through seismic imaging, whichtransmits soundwaves into the earth andthen uses the echoes to build an image (seeBP Magazine Issue 1 2009 for more onadvanced seismic techniques). Even today,though, with all the seismic techniquesand other technology available, you veryrarely know for sure whether there is oil andgas in the ground until you drill a well. ■

We use products made of oil and gas every day,but have you ever wondered how thesehydrocarbons were formed in the first place? And what about how and where they are trappedunderground? These are complex questions thathave driven geologists for more than a century, intheir ongoing search for new sources of energy.

O

Report> Nic WelshIllustration> Magic Torch


Glossary

• Seal – an impermeable layer ofmaterial, such as shale, salt, limestoneor anhydrite, that traps oil and gas andstops it from continuing its verticalmigration.• Trap – a reservoir/seal geometrythat prevents oil and gas frommigrating to the ground surface. In itsmost basic form, a trap is a concave-downward shape (e.g. a fold or adome).• Porosity – a measure of the void(i.e. ‘empty’) spaces in a material. It isexpressed as a fraction of the volumeof voids over the total volume.• Permeability – the capability of aporous rock or sediment to permit theflow of fluids through its pore spaces;basically, a measure of the size of theconnections between pores.• Anoxic conditions – water withno oxygen content, thus preventingorganic matter from rotting. Thisoften occurs in very restrictedseaways, where there is little watercirculation. The deep Black Sea is onemodern example.• Suboxic conditions – water thatis low in oxygen content and,therefore, yields very slow decay rates.


Not to scale.


Interview> David VigarPhotography> Graham Trott

With 38 years in the US Navy – the past eight as the man responsiblefor overseeing the safe reactor operations of more than 80 nuclear-powered submarines and 12 nuclear-powered aircraft carriers –Admiral Frank ‘Skip’ Bowman knows a thing or two about keepingpeople safe. He talks to BP Magazine about his experiences and hisnew role on BP’s board, as one of its non-executive directors.

FRANKBOWMAN

AN INTERVIEW WITH

➔ inte rview


Interview> Frank Bowman

Since the 1960s, the US Navy’s nuclear subshave travelled 231 million kilometres (144 million miles) and clocked up 6,200‘reactor years’ without an accident, in anextreme, high-hazard environment.

Naval submarines are like three-storeybuildings, just nine metres (30 feet) wide,but as long as one or two football pitches.They are powered by nuclear reactors, andsome are armed with nuclear missiles. Eachsub carries more than 100 people deepbelow the ocean’s surface, for months at atime. They are dependent on complextechnology that has to be expertly operatedaround the clock.

As director of the US Naval NuclearPropulsion Programme – known asnaval reactors or ‘NR’ – Bowman

was responsible for overseeing the safereactor operations of more than 80 nuclear-powered submarines and 12 nuclear-powered aircraft carriers for eight years, upto 2004. This was the culmination of anaval career that included serving asdirector of political-military affairs and asthe chief of naval personnel, as well ascommanding a nuclear submarine, the USSCity of Corpus Christi.

Given its record, it’s easy to see why theworld’s most hazard-prone industries have

endeavoured to emulate NR’s process andprocedures. NASA, for example, adopted anNR-type programme after the Columbiaspace shuttle accident. Admiral Bowman,in fact, testified before the US Congress onNR’s culture and procedures following thattragedy.

More recently, the nuclear navy’s‘SUBSAFE’ system was held up as a rolemodel of process safety in the report of thePresidential Commission into theDeepwater Horizon accident in 2010.

Largely through the link with Bowman,BP’s leaders have gained indepthunderstanding of the processes, standardsand attitudes underpinning NR’s multi-decade safety record. Bowman served onthe panel that investigated BP’s USrefineries after the Texas City explosion in2005, led by former secretary of state JamesBaker. He then became a member of thecompany’s US advisory council; and inNovember 2010, he joined the main boardas a non-executive director. He has visitedall of BP’s US refineries, as well as twooffshore platforms and the company’sHouston-based learning centre, designed toprovide on-site learning and developmentfor upstream staff. He has also led a sessionat BP’s Operations Academy at theMassachusetts Institute of Technology.

Much of the work now being done in BPby Bob Dudley’s team, particularly thesafety and operational risk (S&OR) divisionunder Mark Bly, has strong echoes of NR’sapproach. Three concepts in particularstand out – standardised systems, third-party inspection, and developing the skillsand attitudes of individuals.

Bowman says: “The submarine nuclearnavy has a set of risk management systems

“The overarching culture among submariners is one thatinvolves a questioning attitude, a healthy scepticismabout how things are. Nothing is taken for granted.”

»

When Admiral Frank ‘Skip’ Bowman talks to BP’sleaders about safety, they listen very closely – and withgood reason. Bowman spent 38 years in the US Navy,eight of them as director of naval reactors for both thenuclear submarine and carrier fleets, an organisationwith a legendary reputation in the world of safety andrisk management.


– for reactors, for submarine integrity, forweapons, for navigation, and so on – andsafety comes from verbatim compliancewith the rigorous set of procedures thatmake up each system.” The SUBSAFEsystem praised by the PresidentialCommission is designed to preventflooding and to ensure operation of thesystems to recover from flooding. Thesystem contains procedures for design,materials, fabrication and testing, and forwork controls throughout life. Bowmanbelieves the framework is directlyapplicable to oil and gas facilities.

“But the systems and procedures aloneare not enough,” he adds. “The overarchingculture among submariners is one thatinvolves a questioning attitude, a healthyscepticism about how things are. Nothingis taken for granted.”

The questioning attitude is backed upby formal processes of scrutiny andoversight. Submarines are overseen

by an independent technical authority andan independent safety and quality assuranceauthority, focused on safety and compliancerather than operational mission concerns.

Bowman says: “You need to have a systemof inspections without creating distrust. This

is not about distrust. It is simply separate setsof eyes looking at each process.”

BP is following similar principles, withS&OR professionals inspecting operationsand external experts being brought in tocertify critical equipment and processes,such as blowout preventers on drilling rigs.As Bowman observes, BP is implementingthe principle articulated by the founder ofthe nuclear navy, Admiral Hyman GRickover: “You don’t get what you expect.You get what you inspect.”

Bowman sees strong parallels betweenthe submarine navy and the energyindustry. “Admiral Rickover said thattechnology applied to nature creates itsown discipline. The stronger the forces ofnature being harnessed by a giventechnology, the more dire the potentialconsequences, the more discipline neededby those who design, operate and maintain that technology. That puts oil and gas near the top of the league in termsof the need for strong, rigorous discipline in designing, maintaining and operatingour systems.”

And Bowman clearly believes BP canemulate the nuclear navy’s approach. “Ihave had a great deal of experience with BPover the past six years, and I think we have


a similar quality of people as the nuclearnavy. And with the right degree of training,certification, qualification, inspection andoversight, BP and, indeed, the entireindustry, can achieve the same sort of safeand successful outcomes that the nuclearnavy has.”

Bowman has been impressed by theway the S&OR organisation and theupstream have taken decisions to

suspend operations when necessary. “We’verecently walked away from several jobswhere our standards were not being met byour partners or a contractor. That sends amessage heard around the world, and weshould continue to do that.”

Turning to BP’s priorities for the future,Bowman stresses the need for continuousmonitoring and improvement.

“You need to respect even the smallestamount of risk and evaluate that riskconstantly. Risk management is a process,not an event. You may have put in placesystems to manage risk associated with aparticular operation, but you’re never done.What if the circumstances change? Forexample, what happens if the alarm systemfails? What is the back-up plan? As acompany, we must face facts and call it like

“You need to respect even thesmallest amount of risk andevaluate that risk constantly.Risk management is aprocess, not an event.”


Admiral Bowmanis a native ofChattanooga,Tennessee, US. Hegraduated fromDuke University in1966, and thenserved more than38 years in the US

Navy. At sea, Bowman commanded thenuclear submarine, USS City of CorpusChristi (SSN 705), and the submarinetender, USS Holland (AS 32). AdmiralBowman served on the Joint Staff asdirector of political-military affairs andas the chief of naval personnel. From1996 to 2004, he was director of theNaval Nuclear Propulsion Programme,the third successor to Admiral HymanG. Rickover, and was concurrentlydeputy administrator for naval reactorsin the National Nuclear SecurityAdministration at the US Department ofEnergy. Following his naval career,Bowman was president and chiefexecutive officer of the Nuclear EnergyInstitute, which represents more than300 domestic and internationalcorporations and organisationsinvolved in nuclear energy and relatedtechnologies. Bowman is a member ofthe National Academy of Engineering,and a recipient of the Robert S. LandauerMemorial Lecture Award fordistinguished contributions to the fieldof radiological physics and radiationhealth protection. In 2005, he wasappointed an honorary KnightCommander of the Most ExcellentOrder of the British Empire, by theQueen Elizabeth II. Bowman was alsoawarded the Officier de l’Ordre Nationaldu Mérite by the French Government, in2007. Bowman serves on the boards ofdirectors of Morgan Stanley MutualFunds; BP; Naval and NuclearTechnologies; the Armed ServicesYMCA; and the American ShipbuildingSuppliers Association. He is a memberof the American Lung Association’sPresident’s Council and a trustee of theFairhaven United Methodist Church.Bowman married his high schoolsweetheart, Linda, in 1966. TheBowmans have two children and sixgrandchildren.

it is. Stop the operation if we becomeuncomfortable.

“When I was doing inspections, I wouldencourage people to think in terms ofchanges to the status quo or equilibrium.You’re in a situation where everything isok, no alarms, no bells, no loss of integrity.So, before you take that next step in theoperation that will disturb thatequilibrium, by turning a valve orchanging a switch position, think aboutwhat you expect. What do you expect tosee? What do you expect to hear? Or smell?Then, if you don’t get the change youexpect when you turn the valve or movethe switch, you need to quickly return tothe status quo ante. So many accidentsoccur because people don’t ask themselves, ‘What do I expect when I change theequilibrium? And if I don’t get that result,what am I going to do to return to theequilibrium state?’

“In any business dealing with anunforgiving environment, complacency isyour worst enemy. You have to be verycareful about what conclusion to drawfrom the absence of an accident. Eventhough we may have done things this yearthat make all the sense in the world, wemust continue to go back over each area

“In any business dealingwith an unforgivingenvironment, complacencyis your worst enemy.”

»

A LIFETIME OF SAFETY EXPERIENCE


and re-evaluate. We must continue todisplay that healthy scepticism, thatquestioning attitude.

“BP has done a lot: establishing S&OR.Getting the operating management system(OMS) fully embedded. We have a new setof voluntary performance standards fordeepwater drilling that tells the world BP isvery serious. We are sharing lessons learnedamong ourselves and with governmentsand global partners. We have begun to havemore field inspections. I was very happy toobserve and participate in Bernard Looney’s[executive vice president for Developments]inspections and sessions with the Gulf ofMexico and North America Gas leadershipteams. I was impressed with the conduct ofthat inspection. ”

Bowman wants to see processessupported by questioning attitudes.“Right now, all over Washington DC,

I’m seeing the US Department of HomelandSecurity’s bumper sticker asking people tobe alert to potential terrorism saying, ‘Ifyou see something, say something’. Weshould borrow that thought, and say toworkers that if they see anything that

doesn’t seem quite right, they must saysomething. Empowering workers andcontractors to speak out is a very importantpart of what we’re doing.”

Asked about leadership qualities,Bowman says his experience tells him bothtechnical and personal characteristics areimportant.

“Admiral Rickover insisted on a highlevel of technical understanding andknowledge of the systems being operated.But leaders also need high ethical standardsand high core values that are constantlytransmitted. It is also about being a goodlistener. Leaders can’t always be inbroadcast mode. They have to be able tomute themselves and go into listen mode –and accept criticism. They have to bewilling to have people around who areprepared to say, ‘Boss, you forgot to putyour pants on this morning.’

“Culture is set by the collectivebehaviour of an organisation’s leaders and,therefore, it is vitally important that themessage must originate at the top. Thecollective behaviour of BP’s leaders mustconsistently endorse safety as central toour very being.


“I think that Bob Dudley and hisexecutive staff are doing just that... gettingthe message out that safety and operationalrisk management is endemic to what wedo. They are also very good listeners, as Ihave witnessed on the board.”

Bowman sees his role at BP as havingthree strands: monitoring and scrutinisingthe executive team’s performance;supporting management in identifying andmitigating risk; and – his constant theme –asking the right questions.

“As Popeye the sailor man would say, ‘I’vebeen doing this all me bloomin’ life.’ Andwhat 38 years of nuclear submarineexperience has taught me to do is always toask questions. Show me why we should dothings this way? How can we improve in thisarea? What did we learn from that incident?What have we done to be sure we have goodup and down communication on that point?

“We can’t be satisfied with meetingsome given level of process safetyachievement and say, ‘Ok, that’s that, let’sgo on to something else.’ The way we got tothe level of excellence we had in the Navywas to never, ever, be satisfied. I think BPcan learn from that.” ■

“The way we got to thelevel of excellence we hadin the Navy was to never,ever, be satisfied. I think BPcan learn from that.”

➔ g ro u p u pdate


Early in 2011, BP’s chief executive, Bob Dudley, told investors that it wouldbe a year of consolidation for the company. By the end of 2011, BP hadreached what he described as a ‘definite turning point’, with momentumstarting to return throughout the organisation. During the year, thecompany acted to implement three strategic priorities: putting safety andoperational risk at the heart of BP; rebuilding trust; and pursuing growth inshareholder value. BP is now looking towards its future direction, unveiling a10-point plan to build a stronger, safer company to create sustainable value.BP Magazine looks at some of the key events that have taken place within thecompany over the past 18 months, and outlines the 10-point plan.

Review> BP’s turning point

BP’S TURNING POINT

> In March, BP’s new safety andoperational risk function begins work.The division is responsible for settingglobal standards for safety andoperational risk management, andworking with all of BP’s operatingbusinesses as they apply them day-by-day, worldwide.

2011 IN REVIEW

Group update> 2011 in review

> In February, BP joins Chevron,ConocoPhillips, ExxonMobil and Shell asa member of the US Marine WellContainment Company, bringing to theorganisation its experience andequipment from the Deepwater Horizonresponse effort.

> In April, BP commits up to $1 billion toearly restoration projects that willrestore natural resources in the Gulf ofMexico at the earliest opportunity.

> In February, BP reinstates the payment ofquarterly dividends. The payments weresuspended in June 2010, following the oilspill in the Gulf of Mexico.

> By the end of the third quarter 2011, BPhas announced asset sales totalling $19 billion against its divestmentprogramme. It plans to divest a further$15 billion, which will include the sale of two US refineries – Texas City andCarson.

Safety and riskmanagement

Rebuilding trust

Growing valuefor shareholders



> BP’s upstream organisation implementsone of the most significant restructuringprocesses in 18 years, with the creation ofthree new divisions – Exploration,Developments and Production. Eachdivision has its own executive vicepresident, who reports to BP chiefexecutive Bob Dudley.

> The new global wells organisation gets towork. Headed by Richard Lynch, as part ofthe Developments division, this group isresponsible for standardising the waywells are designed and drilled throughoutthe BP world.

> In July, BP announces it will implement anew set of deepwater oil and gas drillingstandards for its operations in the Gulf ofMexico. The voluntary performancestandards go beyond existing regulatoryobligations and reflect the company’sdetermination to apply lessons learnedfrom the Deepwater Horizon incidentand subsequent oil spill.

> Over the course of 2011, BP undertakes 48major upstream turnarounds. Aturnaround is a planned, periodicshutdown of a facility in order to performmaintenance and repairs, and to inspect,test and replace materials and equipment.

> Throughout 2011, BP implements thelessons learned from the DeepwaterHorizon accident, including theconstruction and deployment of a full-scale well capping stack in Angola. Thecompany also creates a package ofresponse tools, that are housed inHouston in climate-controlled facilities,to maintain the equipment’s integrity,with plans in place so that it can bedeployed anywhere in the world within24 hours.

> By the end of October, BP has contributedhalf of the $20 billion it committed forthe trust fund to meet the costs of theDeepwater Horizon accident.

> By the beginning of December,individuals and businesses have receivedmore that $6.1 billion in payments forclaims, while government entities havereceived around $1.3 billion in paymentsfor claims and advances.

> During 2011, BP reaches a $1 billionsettlement with MOEX and a further $4 billion settlement with Anadarko,both co-leaseholders of the Macondowell. It also reaches a settlement withWeatherford, which manufactured thewell’s float collar.

> After 18 months of sustained effort toclean the shoreline of the Gulf of Mexico,following the Deepwater Horizonaccident, the US Coast Guard’s federal on-scene coordinator (FOSC) approvesthe shoreline clean-up completion plan,paving the way for restoration work.

> BP forms a new deepwater globalresponse team. Reporting to head ofDevelopments, Bernard Looney andpresident of BP America Lamar McKay,the group accepts invitations fromgovernments, regulators and othersaround the world to share the lessonslearned on relief well drilling, spillresponse and how to manage thousandsof potential responders.

> The year to October proves to be a recordone for BP in new upstream explorationaccess, with awards in 11 countries formore than 60 new exploration licenses.These include deepwater licences inBrazil, Australia, China, and Trinidad & Tobago.

> BP becomes the first company to reach itsinitial production target in Iraq, withoutput at the super-giant Rumaila fieldgrowing significantly.

> Refining and Marketing continues toprovide valuable cash flow to the group,with 2011 set to be one of the highest-ever years for downstream earnings.

> BP announces plans to expand itsBrazilian biofuels business. It will acquirethe remaining 50% share in the Brazilianbiofuels company Tropical BioEnergia,making it the 100% owner. The deal isworth approximately $71 million.Meanwhile, it announces that it willacquire an additional 3% share in CNAA,for approximately $25 million. Followingthe deal, BP will own 99.97% of thecompany.

> BP completes an agreement with India’sReliance Industries to acquire a 30%stake in 21 oil and gas production sharingcontracts that Reliance operates in India.The two companies will also form a 50:50joint venture for the sourcing andmarketing of gas in India.

> BP and its partners announce thedevelopment of four new oil and gasprojects that, together, will involve a totalinvestment of almost £10 billion in theUK’s North Sea oil industry over the nextfive years. The announcement includesapproval from the UK government toproceed with the £4.5 billion Clair Ridgeproject, which will see a second phase ofdevelopment at the giant Clair field, westof the Shetland Islands.

> In the Gulf of Mexico, BP is awardedpermits to resume plugging andabandonment activities and obtains apermit to drill a new appraisal well at theKaskida prospect. Drilling begins inNovember 2011.


Group update> 10-point plan

BP’S 10-POINT PLANBP’s 10-point plan for the future consists of five things to expect and five things to measure.

Relentless focus on safety and managing risk

BP’s top priority remains to deliverworld-class performance in safety, riskmanagement and operationaldiscipline. Group chief executive BobDudley says it will be a company that“systematically applies its globalstandards as a single, global team.”

Playing to strengths

BP plans to play to its key strengths.These include exploration, where it hasa long history of achievement, as wellas managing deepwater operations,giant fields and gas value chains. Overthe years, BP has also built a world-classdownstream business. Underpinningthese strengths, are deep capabilities inbuilding relationships and indeveloping leading-edge capability inits flagship technologies.

Stronger and more focused

The work being carried out to reshapeBP will make it a stronger, morefocused company – with a base ofassets that is high-graded and high-performing.

Simpler and morestandardised

BP has become more standardised. Itnow has a smaller footprint – withfewer assets and operations in fewercountries – and its internal reward andperformance processes are morestreamlined. All of which Dudleybelieves will “drive better and moresustainable performance in safety,quality and efficiency with lessvariation.”

More visibility andtransparency to value

BP has pledged to improvetransparency in the reporting of itsbusiness segments. In 2012, it willinclude separate numbers for certainparts of its businesses, such aslubricants and petrochemicals in thedownstream.

2. 3.

1.

4. 5.


Active portfolio management

BP is managing its portfolio to focus onareas of strength and to deliverincreased financial flexibility. Sincestarting the current disposalprogramme, it had announcedtransactions totalling around $19billion by the end of the third quarterof 2011. In addition to the originalprogramme, it plans to divest a further$15 billion of businesses by the end of 2013.

New projects onstream withhigher margins*

Over the next three years, BP has astrong list of upstream projects comingonstream and, by 2014, it expects unitcash margins on production from thisnew wave of projects to be arounddouble its existing average.*This assumes a constant $100/bbl oilprice and excludes TNK-BP operations.

Operating cash flow to growaround 50% by 2014

By 2014, BP expects to generate anincrease of around 50% in additionaloperating cash flow each year,compared with 2011, based on aconstant $100bbl oil price.Approximately half of the additionaloperating cash flow is expected tocome from concluding BP’s paymentsinto the Deepwater Horizon Oil SpillTrust Fund, with around half comingfrom operations.

Use of incremental cash flow– reinvestment and otherpurposes

That additional cash flow will be usedprudently, says Dudley. “We want touse around half for increasedinvestment in our project inventory forgrowth, and around half for otherpurposes.” These purposes may includeincreased distributions to shareholdersthrough dividends, buybacks, orrepayment of debt.

Strong balance sheet

BP plans to enhance the strength of itsbalance sheet, moving into the lowerhalf of the 10-20% gearing range.

8.

6. 7.

9. 10.


Viewpoint> Houston monitoring centre


Houston has a new mission control, only this one is not located at NASA’s Johnson Space Centre, but up theroad at BP’s offices. And instead of voyages into space, it charts the course of oil and gas wells being drilleddeep into the Earth’s surface. BP’s state-of-the-art Houston monitoring centre provides real-timeinformation feeds and instant communications between its rigs in the Gulf of Mexico and its experts basedonshore. It is a flagship example of what BP calls a collaborative real-time environment – or CoRE – and willbe used to reduce risk by monitoring data from each rig on a 24/7 basis, and providing support to offshoreteams. The largest part of the centre is pictured here, with its curved video wall, where 25 screens displaydata and imagery from a variety of sources, to provide dashboard views of current operations. And it’s nosurprise that it looks like the real Mission Control, as a former senior NASA manager was involved in itsfunctionality. Wayne Hale, who served as space shuttle programme manager and flight director, helped todesign the centre and the systems it uses. “Hale lived and breathed monitoring, data feed and analysis,measurement, and simulation training as a flight director for NASA,” says BP’s operations manager ChrisHarder. “He has helped us develop a very rigorous onshore monitoring process for Gulf drilling activitiesand we certainly feel confident having had his significant input.” ■

Mission possible

PHOTOGRAPHY: ROCKY KNETEN


Country report> Azerbaijan

CASPIANTHE RISING FORTUNES OF THE

Anyone who has had the chance to visit Baku in the pastfew years can’t have helped notice the sheer volume ofconstruction taking place in Azerbaijan’s capital. Muchof this has been made possible by the renaissance in thecountry’s oil industry, with revenues translating intonew highways, hotels and skyscrapers. Now, with BPand its partners planning to fully develop the giant ShahDeniz gas field, the next stage of Azerbaijan’sdevelopment will see it forge closer ties with itsEuropean neighbours.

➔ u ps tre a m

High life: Baku’s three giantFlame Towers dominate thecity’s skyline.


Report> Amanda BreenPhotography> Mehmet Binay/Stuart Conway


Old and new: the Gobustancarvings (above) are aUNESCO world heritage site.Below, an aerial view of thedrilling floor on the ShahDeniz platform.


Now sitting 108 metres (354 feet) above sealevel, Gobustan’s petroglyphs are about fivekilometres (three miles) from theshoreline. While the fascinating,sometimes hard-to-decipher carvingsdemand visitors’ attention, if you tear youreyes away from this art gallery of alandscape and turn a full 180 degrees, thesweeping view down to the blue Caspianwaters is equally captivating.

In the distance, like small toys droppedin a bath, it’s just possible to make out partsof man-made infrastructure that tell a storyabout this nation in modern times. For, justas Gobustan reveals a rich history throughits archaeological findings and burial sites,the Caspian waters point to Azerbaijan’spresent and future, with images of the oil

It’s hard to look beyond the immediate surroundings atGobustan, the UNESCO world heritage site in Azerbaijan’sscorched semi-desert, an hour’s drive southwest of thecapital, Baku. There, on a barren hill-top, more than20,000 years of human history is etched onto giantboulders, with thousands of carvings that depict howcommunities lived in the region through the ages. Wildanimals, livestock, male and female figures, and evenlongboats feature on rock faces, today’s remnants ofcaves once lapped by waters of the Caspian Sea.

»


SOUTHERN ENERGY CORRIDOR:PIPELINE OPTIONS

On 1 October 2011, three bids for theconstruction and operation of a newpipeline were presented to the ShahDeniz consortium. At the time of goingto press, the proposals were underconsideration by the project team; thepipeline route will be selected on thebasis of eight criteria, includingcommerciality, project deliverability,scaleability and engineering design.● Nabucco proposal: maximum

capacity of 31bcma, involves a 3,863 kilometre route from Turkey tothe Baumgarten gas hub in Austria,the largest scale option.

● Trans-Adriatic Pipeline: designed toinitially carry 10bcma, offers room forexpansion at a later stage. CrossesGreece, Albania, the Adriatic Sea andcomes ashore in southern Italy.

● IGI-Poseidon proposal: links theexisting interconnection betweenTurkey and Greece to new onshoreand offshore pipelines, before endingin Italy. Its capacity is tailored to ShahDeniz export quantities of 10bcma,with possible expansion through anew link to Bulgaria.

The Shah Deniz project team is alsoevaluating a fourth potential exportoption which would transport gas tomarkets in south-eastern Europethrough a system of regional existingand future interconnector infrastructure.

and gas industry – rigs, platforms andvessels – lining the horizon.

Extracting hydrocarbons is not a newactivity here; the country’s first industrialoil well was drilled in 1848 and by 1901,Azerbaijan produced half the world’s oil.More than a century later, driving along thehighway that traces the coastline, there areconstant reminders of the oil industry, pastand present: narrow pipelines, disusednodding donkeys, and an enormous steelcarcass of a platform jacket, waiting to bedisassembled for parts.

The six-lane roadway itself is a result ofthe revival of Azerbaijan’s oil production;in 1994, the late president Heydar Aliyevsigned what became known as the ‘contractof the century’, a production sharing

Source: BP/The World Factbook


agreement (PSA) with 11 foreign oilcompanies, including BP, to developoffshore hydrocarbon resources. Less than20 years later, oil revenues are bringinginvestment to the nation’s infrastructure,and nowhere is the pace of change moreevident than in Baku.

Alongside the renovated sandstonemansions of the first oil boom and theutilitarian blocks of the Soviet era, newskyscrapers, hotels, shopping malls andentertainment venues are springing up,thanks to the 21st century oil boom.

Dominating the city’s skyline now arethree Flame Towers, each 182 metres (600feet) of curving steel, inspired byAzerbaijan’s history of fire-worshipping. Inancient times, the Zoroastrians – for whomfire was an important symbol – builttemples around burning gas vents in theground. The towers are the country’s tallestbuildings, symbolising the significance ofoil and gas.

If the first chapter of this latesthydrocarbon boom has been largely downto oil, with the giant BP-operated Azeri-Chirag-Gunashli (ACG) field yielding onaverage 757,500 barrels a day in the firstnine months of 2011, the next chapter will

see a new order, thanks to the developmentof one of the world’s largest ever naturalgas discoveries.

Shah Deniz – meaning ‘king of the sea’ –lies offshore, 70 kilometres (40 miles) southeast of Baku, and is thought to hold 1 trillion cubic metres of gas. With the firstphase brought online in 2006, up to 8 billion cubic metres of gas a year (bcma)and 35,000 barrels of condensate per day(in the first nine months of 2011) supplymarkets in Azerbaijan, Georgia and Turkey,transported through the South Caucasuspipeline (SCP).

With a 25.5% interest in the field, and asoperator, BP is now leading a consortium ofseven partners who are working towardsbringing the full field into production, in a$20 billion project of unprecedented scaleand complexity in the company’sworldwide portfolio.

“I don’t call Shah Deniz a project, Idescribe it as a programme, because it hasat least four major projects within thewhole,” says Rashid Javanshir, BP’s regionalpresident for Azerbaijan, Georgia andTurkey. “They include subsea development,topsides offshore, an extension ofSangachal terminal to process the gas and


potential expansion of SCP for export toTurkey. There is also gas transit throughTurkey to consider, as well as salesagreements for buyers there, and beyond.”

Gas volumes held in the Shah Denizreservoirs are so vast that they will notonly meet the needs of Azerbaijan and itsregional neighbours, but providesignificant supplies to Europe. Of theincremental 16bcma of gas that the fullfield will produce, 10bcma will betransported to markets west of Turkey.

“We are part of an historic developmentto build the so-called ‘southern energycorridor’, to bring gas from the Caspian towestern Europe,” Javanshir continues. “Thisis an exciting opportunity for Shah Denizand BP; it involves negotiations withmultiple countries which have an interestin a new pipeline, as well as the differentcompanies that have submitted routeproposals.” (see page 25)

As the European Union looks todiversify its energy supplies, the creation ofa new southern corridor aims to provideincreased energy security for the continent,bringing affordable gas supplies initiallyfrom Shah Deniz, and paving the way forfuture gas delivery from the wider Caspian

Commerce centre: shoppersgo about their day in centralBaku (below). Right,maintenance work on theShah Deniz Alpha platform.


»

region and, potentially, the Middle East.With a five-year extension to the originalPSA signed last year, Shah Deniz willproduce natural gas until at least 2036.

Securing the long-term support ofinternational stakeholders for the project is,therefore, crucial, as BP’s vice president forShah Deniz development, Al Cook,explains: “The gas will flow through manycountries, so it’s vital that we work togetherto address the strategic needs of all thenations involved, as well as the commercialneeds of BP and its partners. We holdworkshops on a quarterly basis to bring theconsortium of companies together withgovernments and the EuropeanCommission; we’re looking to create aproject that will bring benefit for all.”

Before the gas crosses any borders,Azerbaijan itself will be top of the list ofbenefactors. “Broadly speaking, Shah Denizmeans energy independence for us,” saysBahram Huseynov, deputy vice presidentfor geology at SOCAR, the state oilcompany of Azerbaijan, a member of theShah Deniz consortium and a key BPpartner. “It will allow the country to be self-sufficient for gas and reap the benefit ofselling to other markets.”

“We strongly believe that oil riches do not only belong to the current generation ofAzerbaijanis, but to all those who will live in this land in future,” ShahmarMovsumov, executive director of the State Oil Fund of Azerbaijan, tells BP Magazine.

To ensure that oil and gas revenues are managed efficiently, to benefit thecountry both today and tomorrow, Azerbaijan’s sovereign wealth fund wasestablished in 1999, as part of the national oil strategy of the former presidentHeydar Aliyev. In 12 years, start-up capital of $270 million has grown into assetsworth $30 billion.

“There are three main objectives of the fund,” says Movsumov, appointed to hisrole by the country’s president, Ilham Aliyev, in 2006. “The first is to ensure inter-generational equality, for the Azerbaijani people through the accumulation of oilrevenues.

“To date, our saving ratio is slightly above 50%, with the rest of the moneyinvested in the country. According to our scenarios, we are expecting revenues ofaround $200 billion in the coming 15 years, which means around half will beinvested in the country and half saved.”

The fund also aims to enhance macro-economic stability by stimulating thedevelopment of other sectors and decreasing dependence on oil revenues. Lastly, itfinances major national infrastructure projects to support socio-economic progress.The largest expenditure for the fund is a contribution to the national budget, whichin 2011 amounted to $12 billion, for capital infrastructure development.

“Since the fund’s creation, it has been extremely important to be transparent,”continues Movsumov, “because we believe the constituency of the fund is thepeople of Azerbaijan; it is their money we are managing and, therefore, we need tobe as transparent as possible.”

International auditsTo meet that goal, the fund discloses investment information on a quarterly basis,including details of the assets under management and their geographical location,and its annual report is approved by international auditors.

In 2009, Azerbaijan became the first country to be designated compliant with theExtractive Industries Transparency Initiative (EITI), a global standard for revenuetransparency in the oil, gas and mining sectors. The EITI employs a methodology tomonitor and reconcile company payments and government revenues at country level.

As the executive director of SOFAZ, Movsumov also chairs Azerbaijan’s NationalCommission on EITI. “The initiative provides citizens access to information onrevenue paid to the government – every single dollar, barrel of oil, cubic metre of gasor ounce of gold,” he says. “The process is overseen by a multi-stakeholder group,consisting of participants from the government, extractive industries and civilsociety, represented by a coalition of non-governmental organisations.

“I believe the initiative has been extremely successful in this country, as it hasremoved any debate about revenue transparency from the agenda. Everyone can seehow much income the government receives from these sectors.”

BP plays a coordinating role among the oil and gas companies participating inthe EITI in Azerbaijan and represents them at the multi-stakeholder group. Itsubmitted its 13th EITI report last March. “BP has been very supportive since thebeginning of the process,” adds Movsumov. “At the same time, as a member of theEITI International Board, I have always felt the support from BP for the international initiative.”

Projects supported directly by SOFAZ:● Education – payment of tuition fees and living expenses for Azerbaijani citizens at

500 top foreign universities● Baku-Tbilisi-Kars railway project● Water pipeline from Oguz-Gabala region to Baku● Samur-Absheron irrigation system● Housing and temporary settlements for internally displaced people, due to the

Nagorno Karabakh conflict● Azerbaijan’s equity share in the Baku-Tbilisi-Ceyhan export pipeline● Formation of the statutory capital of Azerbaijan Investment Company

STATE OIL FUND

INVESTING IN AZERBAIJAN’S FUTURE


On the horizon: a workerlooks towards the Sangachaloil and gas terminal.


Land area

86,600 sq kmSource: World Bank

Azerbaijan in numbers

Population total (2010)

9,047,932Gross domestic product (2010)

$51.09 billion

Urban population

52%


Q&A> GÜNTHER OETTINGER European Commissioner for Energy

What is the Southern Energy Corridor and why isit significant?This is an initiative to make the world’s largestconcentration of conventional gas reservesavailable to Europe, and to make Europe’s hugemarket accessible to those resource-rich countries.It is the chance for partner countries to strengthenrelations with the European Union (EU) and tobecome major energy trading partners. It alsorepresents the opportunity for us to invest in them,allowing them to fully monetise their resources.

What role can Azerbaijan play in Europe’sregional energy projects?Azerbaijan is among the top countries that couldpotentially play a major role in Europe’s energysecurity, not just because of its own resources butalso as a gateway to the East of its territory. If thispotential is explored, Azerbaijan and Europe’salready strong relationship would be strengthenedand further consolidated.

What difference will full field development ofShah Deniz make to Europe?It depends. If Shah Deniz phase two is allocated asmall pipeline option, then it will not make asmuch of a difference as it could; it would lose thevalue it has now. For Azerbaijan, that would meanit would not be the gateway to Europe it might bewere the Southern Corridor to expandexponentially.

Once the Shah Deniz consortium takes a finaldecision on the project, including the preferredroute for exporting the gas by pipeline, how willthe EU support implementation?If Shah Deniz opts for a strategic solution, the EUwill do all it can to support the expansion of theroute. Recently, all 27 member states put theirunanimous effort behind the construction of aTrans-Caspian pipeline – that was a first and itshould pave the way for interested companies tojoin the project.

How important is natural gas to Europe’s energysupply, both today and for the future?Gas will be important for the foreseeable future andI think it is a natural complement to renewables.Only when Europe can source 100% of its energyneeds from renewables, will we be able to say wehave reached a transition. Realistically, we are farfrom that point. So, I prefer to see gas as part of atrinity within the fuel mix, working alongsiderenewables and greater energy efficiency.


The first step towards making this areality came in June 2010, when thegovernments of Azerbaijan and Turkeysigned a Memorandum of Understanding toestablish a framework for gas sales andtransit terms for transportation throughTurkey into Europe. Another major stepwas taken on 25 October last year, when theShah Deniz consortium signed legally-binding sales and transit agreements withtheir Turkish counterparts. Theseagreements will allow the partners toproceed with the selection of a pipeline intoEurope, to confirm gas sales agreementswith potential customers and to movetowards a final investment decision.

A common theme in conversationsabout Shah Deniz is the sheer scale of thedevelopment; for BP, the full field resourcesrepresent the largest single volume of gasever sold by the company. Once commercialand bi-lateral agreements between buyerand transit countries are finalized, a finalinvestment decision and project sanction islikely to come in 2013. Only then willconstruction of the offshore facilities andinfrastructure get underway; that chapterwill continue for 10 years, as 26 subseawells will be brought online in differentphases, generating up to 10,000 local jobs.

Huseynov continues: “If we addeverything together, includingconstruction of two platforms, subseainfrastructure and pipeline laying, the paceand scale of activity will be challenging, asit all needs to run in parallel to meet thetarget start-up date in 2017.”

BP has experience of managing projectson such a scale. “This plays to BP’s strengths,as we’re able to draw on expertise from ourregional and divisional structure, to bringtogether an immensely complex value

»

What role does natural gas play inmeeting Turkey’s energyrequirements? Almost 50% of our gas consumptiongoes to produce electricity, which showsthe importance of this resource to thecountry’s energy needs and industrialdevelopment. Last year, we imported 38 billion cubic metres of gas, mostlythrough BOTAS [the state-owned oil andgas company] and five other marketplayers. We have 12,000 kilometres(7,460 miles) of high pressure gaspipelines that transport gas throughoutthe country. Today, 70 cities areconnected to the system and by 2013 weplan to reach all cities in Turkey.

Why was the signing of the gas salesand transit agreements betweenTurkey and Azerbaijan in October2011 significant? By signing these agreements, Turkey hasdemonstrated its strong will to transportShah Deniz gas to Europe. They ensurethe continued development of the ShahDeniz project and form the basis of theSouthern Gas Corridor, along with otherEuropean projects. Shah Deniz gas willbe essential in meeting Turkey’s needsas a growing economy, as well asEurope’s increasing gas demand. Theyalso bring a concrete enhancement toTurkish-Azerbaijani relations.

The agreements complement theMemorandum of Understanding [signedin June 2010] and mean we will startimporting 6 billion cubic meters of gasfrom phase two of the Shah Deniz field.For Turkey, this will mean diversificationand greater security of natural gas supply.

What does the development of thesouthern energy corridor mean forTurkey?Turkey sits between the countries thatharbour 70% of the world’s oil and gasreserves to its east, north and south, andone of the world’s largest energymarkets, to the west. The country isemerging as a major hub for energytransportation and plays an importantrole in linking gas producers in theCaspian and Middle East to consumersin south-eastern and central Europe.

The southern energy corridor isimportant in maintaining Turkey’s

cooperation with its partners in projectssuch as Nabucco, IGI-Poseidon, theTrans-Adriatic pipeline and Shah Deniz.The pipelines could contributesignificantly toward Europe’s energydiversification strategy and reinforceTurkey’s interdependence with Europe.

What are the factors that Turkeyneeds to consider as it invests in gasinfrastructure?Since the global economic crisis of 2008,Turkey’s economy has rapidlyrecovered, and gas consumption iscontinuously rising, increasing the billfor imports. With our current relianceon natural gas for power generation andindustry, more favourable prices areneeded to keep the industrycompetitive. We also needdiversification in our supply to reducedependency on any single source.International projects of trade andtransit will be important for suchdiversification. This is why our pipelineinvestments are so important; theywould support us in achieving morefavourable pricing regimes for naturalgas. This, in turn, supports our industryand economy as a whole. Last, but notleast, as we build this transit business,we need to develop the right conditionsto provide a reasonable income and anoperational system that will work inharmony with our existing domestic gastransport system and market.

How can Turkey help to provideenergy security for Europe?Energy security remains a high priorityfor Turkey and we have worked hard toestablish new initiatives that takeadvantage of our geographical locationand our historical and cultural ties withnewly independent countries in theCaucasus and Central Asia. Turkey hasbeen successful in developing andimplementing policies withneighbouring regions, and will continueto contribute to Europe’s energysecurity, by acting as a bridge betweenthe resource-rich neighbours andEurope. Providing an uninterruptedflow of hydrocarbons from the Caspianand the Middle East to energyconsuming markets is of particularimportance for Turkey.

Q&A>TANER YILDIZ Turkish minister for energy and natural resources

Next generation: visitors to theCaspian Energy Centre learn aboutoil and gas (above). Right,Azerbaijani boys skate along theBulvar, situated on Baku’s seafront.


chain,” says Cook. “To make this successful,every part of a 4,000 kilometre [2,485 mile]chain has to work and we’ve formed anorganisation to address those needs.”

Lessons from the ACG development alsoprovide valuable knowledge, as BruceLuberski, BP Azerbaijan’s vice president fordevelopments, explains: “What we learneddeveloping ACG was about offshore jacketsand floatover topsides, the advantages of aproduction line and standardisation. Ourbiggest lesson was to build everythingonshore, transport the complete facility toits offshore location, then set it in place –that’s the floatover concept that we’ll useagain and again.”

As the Caspian Sea is landlocked, withaccess only by two canals that are narrowfor industrial purposes and freeze in winter,there’s no question of shipping largefacilities into the country. Instead,Azerbaijan’s four existing strategic marineinstallation vessels will be upgraded tomeet the Shah Deniz specifications.

“We’ve used all the vessels before, sowe’re playing to a known delivery system,”Luberski adds. “The Shah Deniz platformswill be numbers eight and nine in ourrepertoire, so this development will takethe benefit of everything else we’ve done inthe Caspian.”

With engineering studies ongoing, 2011was a busy year for the project team.Milestones included the drilling of a thirddevelopment well, geo-technical surveys inpreparation for ground-clearing andconstruction of new access roads atSangachal terminal for site extension, and asurvey of the SCP route through Azerbaijanand Georgia for its expansion, as well. Inthe complex programme to bring the fullfield online, there are four separate, yetinter-dependent, projects and the key is toensure each remains on track.

“Marine-subsea, offshore topsides,terminal extension and pipeline expansionare all huge projects in their own right,”says Cathal Kelly, project general managerfor SD2, who is responsible for theintegration, monitoring and alignment ofwells, subsurface and projects in thedevelopment. “We need to make sure theyall progress at the same rate and that onedoes not get ahead of another.”

There are 600 people currently at workon the Shah Deniz development in five UKoffices, in addition to those dedicated toBP’s other Caspian developments, such asthe Chirag Oil Project. In Azerbaijan, BPnow employs around 2,300 national staffacross the whole business, equating to 87%of the workforce. The company’s goal is to


achieve a nationalisation rate of 90%, tomake certain that the future of the oil andgas industry in Azerbaijan lies in localhands. It is continued exploration of theCaspian that will drive growth for bothcountry and company; with a new PSAratified by the republic’s Parliament lastMay, BP and SOCAR will jointly exploreand develop the Shafag-Asiman block, in adeepwater section of up to 900 metres(2,950 feet) below the water surface.

“We’re excited to begin exploration hereagain,” says Javanshir. “It means BP will haveall upstream divisions present and I’m astrong believer that we’ll do more and moretogether with SOCAR. Partnerships areessential in Azerbaijan and I’m pleased to seeour employees moving between thecompanies. I see this as positive, as a sign oftrust and I hope it continues.”

As local talent emerges and newinvestment gets the green light, Azerbaijan ispreparing to come forward as a major supplierfor European energy. Last year’s victory in theEurovision song contest may mean that Baku– and its brand new, specially-constructedstadium – has one night in the spotlight thisMay, but Azerbaijan’s imminent role as along-term provider of natural gas to the restof Europe will put this nation firmly on themap for years to come. ■


➔ downstream Business report> Air BP

Safe delivery: while a Boeing767 takes off in thebackground, Air BP’s PierreFabre ensures the Royal FlyingDoctor Service’s BeechcraftKing Air plane is ready to flyat a moment’s notice, BrisbaneAirport, Australia.


Report> Nick ReedPhotography> Richard Davies/Aaron Tait

IN THE TOP FLIGHTAir BP is one of the oldest, fastest-growing and most highly-respectedfuel suppliers in the entire aviation industry. Far from resting on itslaurels, however, the business wants to reinforce its already strongcustomer relationships as part of a focus on ‘disciplined growth’.


Downstream> Air BP

tend to stay in their jobs for long periodsdue to the specialised nature of their roles.That means strong relationships can beforged with suppliers. This is certainly akey success factor for Air BP: it has beendealing with the same customers atLufthansa and American Airlines for 25 and 15 years respectively.

A recent survey of 185 commercialairlines by Harris Interactive also found thatAir BP is the clear market leader in areassuch as reputation and brand, as well as inservice and the quality of its people. Therecently-conferred title of ‘best internationalfuel supplier’ from customers offers furtherevidence that it is clearly doing somethingright. “It’s a fairly small industry, so you getto meet the same people at all theconferences and other events,” says Air BPchief executive Andy Holmes.

But it’s not just about the relationships.An airline has to be sure that the companysupplying the fuel has the right products inplace, backed up with the highest processstandards to meet their exactingrequirements.

“We are meticulous about our productquality and understanding and managingour risks within our direct and jointventure operations,” says Air BP technicaldirector Justin Walker. ”We also runrigorous training and independent auditprogrammes in order to maintaincompliant operations. Our ‘near-miss’reporting informs the way we plan ouractivity, so that we are continuouslyimproving. And, we work hard to »

Anyone who works in aviation could beforgiven for feeling somewhat beleagueredafter events of the past 10 years. From the9/11 terrorist attacks of 2001, to naturaldisasters such as the Icelandic ash cloud, tothe economic downturn, the industry hasbeen left battered and bruised.

Fast fuel: Air BP fuels morethan 10,000 flights every day –the equivalent of one everyeight seconds. Here, refuellingoperations are carried out atCardiff Airport, Wales.

Despite all this, the major airlines are insurprisingly good spirits. Why? Simplybecause air travel continues to grow onevery continent, particularly in emergingmarkets. In fact, experts predict that globaltraffic will actually double over the next 15 years.

That’s good news for Air BP, of course.It’s a business that has a proud heritage,dating back to the mid-1920s, and one thatis still growing by 2-3% each year. Itcurrently has a global volume share ofapproximately 12%, not only serving theworld’s big commercial airlines, but also abroad spectrum of corporate and generalaviation customers, and public sectorbodies, such as humanitarian organisationsand government defence departments.

As one of the world’s largest suppliers ofaviation fuels (jet kerosene and aviationgasoline), Air BP is currently represented atmore than 600 airports in 50 countries,supplying more than 26 million tonnes(around 8 billion gallons) of products tocustomers annually. And it fuels more than10,000 flights every day – that’s one everyeight seconds.

The technical strength of the business,along with the quality and reliability of itsproducts, its logistical expertise and controlsfor safe delivery of fuel into each and everyairplane, provides the platform forconsistently impressive performance. Butthe figures alone don’t tell the whole story.

Aviation is widely acknowledged as a‘people’ industry, where fuel procurementdirectors and other key decision-makers

“Our aim is simple – for Air BP to be the aviationfuel business that everyone wants to work with.

We don’t simply want to make money, but toadd value to the customers we serve.”

Andy Holmes



On the move: an Air BP refuellingpump truck (above) en route to fill upits next customer, Brisbane airport,Australia. Below, refuelling operationstake place at Cardiff Airport, Wales.


consistently increase the level of oursupport offerings. Our customerrelationship skills are really important. Weoperate in a commodity market, after all, soit’s one area where we can reallydifferentiate ourselves.”

It’s not simply a case of getting on withpeople, of course. There needs to be acommercial reason for developing thatdepth of professional and often personalrapport. “We never forget that customershave choices,” says global sales andmarketing director Peter O’Callaghan anAir BP veteran of 27 years. “The effort wehave put into our service, and the trackrecord that we have developed, has earnedus the right to have a wide breadth ofglobal opportunities around which tostructure specific deals. That’s a good placeto be.”

This is good, but almost certainly notgood enough by itself to stay competitivein a rapidly changing market where banks,traders and re-sellers are replacing thetraditional oil companies as aviation fuelproviders. That’s why Air BP has spent thepast couple of years implementing astrategy described by Holmes as‘disciplined growth’, as well as playing an

“We never forget that customers have choices. Theeffort we have put into our service, and the track recordthat we have developed, has earned us the right to havea wide breadth of global opportunities.”Peter O’Callaghan

active role in influencing and improvingindustry-wide standards.

“By disciplined, we mean staying safe andreliable, as well as growing our profitabilityin a smarter and more focused manner, notjust increasing our geographical footprint,”he explains. “Historically we moved into asmany countries as possible, but it was clearthat we were never going to make anymoney in some of them. So, we have pulledout of those and are now concentrating onpenetrating deeper into markets where thereal growth will come, specifically theemerging markets, such as the Middle East,China, India, Russia and Brazil.”

Chief operating officer David Gilmouremphasises that being competitive is notjust a case of dropping prices to growvolumes and share, either. “The aviationfuels business is a value game, not a shareand volume game,” he says. “The real skillis understanding the market dynamics and,within that, finding new and smarter waysto work with customers.”

In particular, it means partnering withairlines, airport operators and otherstakeholders in different ways – a focus onkey account management, for example,structuring innovative new price deals,

The history of Air BP practically mirrorsthe history of aviation in general.

It can effectively be traced back to1926-27, when BP archives reveal thatsupplies were made to six long-distanceflights at Persian Gulf ports. One of theflights was made by ‘Messrs. Stack andLeete (de Havilland Tiger Moth flight)from UK to India’: between 25December 1926 and January 1927 theytook on a total of 128 gallons of Anglo-Persian aviation spirit at Bushehr,Bandar Abbas and Charbar.

It was an inauspicious start. But itcame after two decades in which theaeroplane had rapidly evolved from afragile contraption of stick, wire andcanvas, intended mainly for sport ormilitary reconnaissance, into a fast,fighting machine. Civil aviation wasstill very much in its infancy.

With total sales having risen from1,036 gallons in 1925-26 to 2,582gallons the following year, Anglo-Persian’s management clearlyrecognised the potential. “The off takeof this product is at present small,” therecords show, “but owing to the fact thatthe Persian Coast of the Gulf hasbecome part of the itinerary for long-distance flights from Europe to India,Australia and the Far East, we anticipatethat sales will show a steady increase.”

They were right, of course, but eventhe most optimistic and far-sightedexecutive could not have guessed thatone day a single Boeing 747 would becapable of taking onboard 42,824imperial gallons of fuel – more than 16 times the total amount supplied bythe company during the 1926-27financial year.

THE BIRTH OF A LEGEND

»

Customer care: with thefuel now loaded on theaircraft, Air BP’s Rick Lewis(left) has his paperworksigned off by the pilot.

Downstream> Air BP


providing customised offers, andleveraging skills and resources ininnovative new ways at key airports.

The biggest part of Air BP’s business iswith the world’s commercial airlines. Itsupplies aviation fuel from BP’s ownrefineries, and from others sourced by thecompany’s Integrated Supply & Trading(IST) division, directly to most of theindustry’s biggest names, through aworldwide network of locations. Itspartnering services include transport andlogistical support, while in Germany, andelsewhere, the company even partners inthe ownership of airport fuelling facilities.

In the corporate/general aviationsegment, customers include enginemanufacturers, emergency services, flyingclubs, helicopter operators, air taxis,charter and management companies, aswell as thousands of corporate and privatepilots. Additional services include training,equipment and professional advice, as wellas account cards that give customers aneasy and convenient way to buy fuelwherever they are in the world.

Within the public sector, Air BP has anumber of long-standing relationships

Added value: Air BP’s PierreFabre (below) prepares to startpumping fuel into the aircraftfrom the system ofunderground pipes at BrisbaneAirport, Australia. Opposite:refuelling operations take placeat Aberdeen Airport, UK.

Downstream> Air BP

with defence and humanitarianorganisations. Its logistical, product andtechnical expertise, allied to itsgeographical presence and enduringpartnerships with governmental defencedepartments in the US and UK, recentlymeant the company was instrumental inthe rapid establishment of a fuelling depotin Italy to support the enforcement byNATO of a no-fly zone in North Africa.

During this year’s floods in Australia,meanwhile, the Australian governmentpublicly acknowledged Air BP’s role inkeeping relief flights flying, despite thechallenging conditions.

“Our aim is simple – for Air BP to be theaviation fuel business that everyone wantsto work with,” Andy Holmes says. “We wantthem to know that we are ready to be theirpartner for the long term, that they can relyon us because we are conscientious, andthat we are creative, that we know our stuff,and that we will constantly find new waysand products to meet their needs safely andto the highest standards. We are also anopen-hearted business, we don’t simplywant to make money, but to add value tothe customers that we serve.” ■


“The aviation fuels business is a valuegame, not a share and volume game. Thereal skill is understanding the marketdynamics and, within that, finding new andsmarter ways to work with customers.”David Gilmour


➔ upstream Production> Interview with Bob Fryar

ALLFORONE

Production platform: viewfrom onboard the CentralAzeri platform, located in theCaspian Sea, Azerbaijan.

In the last of our series ofinterviews with each of BP’sthree upstream heads, executivevice president of Production BobFryar talks about hisresponsibilities for ensuring thecompany produces oil and gas ina safe, reliable manner and whatBP’s values mean to him.


Report> Lisa DavisonPhotography> Simon Kreitem,

Chris Moyse, Richard Davies,Marc Morrison, Stuart Conway

& Kjetil Alsvik


Production> Interviewwith Bob Fryar

Since being made head of BP’s Productiondivision 14 months ago, Fryar has travelledaround the business, visiting numerous oiland gas platforms to learn as much aspossible about each operation.Unsurprisingly, his easy-going,conversational style helps. “It’s importantto understand the current reality in BP,” hesays, “so I like to walk around an office or aplatform and just have a conversation, askpeople their opinion.”

He has a slightly unusual approach tosome of these conversations, oftenintroducing himself by his first name only,because, he says, “when people find outwho I am it either stops the conversation,or changes it. I don’t want people to feeldifferent when they’re talking to me.”

The visits to his operations reflectFryar’s determination to cultivate anenvironment where people feel moreconnected, to each other and thecompany’s values. After months ofconsultation and deep consideration, CEOBob Dudley and his executive team havearticulated the company’s values as: safety,respect, excellence, courage and one team.The choice of words highlights thequalities that BP’s leadership believesrepresent the company at its best – andhow they expect BP’s people to work.

Fryar believes it’s leadershipcommitment that makes all thedifference. “Coming into this job, I

made a commitment to myself thatwhenever time allows, I will stand up andtalk about the company’s values, because Ithink it’s important for people to knowwhat matters to BP. Take our new hires, forinstance. I met a group of new graduaterecruits in September last year and spentthe first 30 minutes talking about values. Iwanted them to know who we are, whatreally matters – that if they see somethingwrong, then they must speak up. That takes courage, but everyone needs to knowit’s okay.”

Teamwork: Bob Fryar (abovecentre) with members of theoffshore team onboard BP’sImmortelle platform inTrinidad. Opposite top, staff atBP’s liquefied natural gas plantin Tangguh, Indonesia. Oppositebelow, an aerial view of BP’sValhall platform in Norway.

»

Acting as ‘one team’ is picked out as oneof the core values and again, Fryar believesBP’s success in teamwork depends onpeople seeing the senior leadership puttingit into practice. In the aftermath of the Gulfof Mexico response, one of Bob Dudley’sfirst big decisions was to split Exploration& Production (E&P) into three divisions –Exploration, Developments and Productionand the Strategy and Integrationorganisation– each with its own leader. Itwas one of the biggest changes to the wayBP ran its upstream business since the early1990s, when a series of semi-autonomousbusiness units were put in place with justone head of E&P to oversee them.

Speaking of his interaction with hispeers – Mike Daly heads up Exploration,while Bernard Looney is responsible forDevelopments and Andy Hopwood leadsthe strategy and integration – Fryar saystheir strength lies in their diverseapproaches and experiences. “We couldn’tbe more different, but that’s a good thing,”he says. “We work very well together.”

Understandably, since therestructuring, a lot of time has beendevoted to clarifying who has

responsibility for what, and that anyactivity is integrated and is a team effort. “Ifyou want to drill an exploration well, youneed all three divisions. Mike Daly’s teamwill pick the prospect, my division isaccountable for ensuring that anynecessary seismic activity is successfullyexecuted, while the global wellsorganisation [part of Bernard Looney’sdivision] ensures the well gets drilled. Wehave to be integrated in order to besuccessful and the way to do that isthrough teamwork at all levels.”

Since his part of the business isresponsible for many of BP’s major facilitiesand pipelines, it’s unsurprising to learnthat operational risk is a big considerationand Fryar and his team have spent a lot oftime identifying and quantifying each one.“We know our risks one-by-one,” he says.“I’ve reviewed the risk matrix in everyregion, walking through each of them.”“The way I see our people owning our risk

Bob Fryar is a man who likes to know what’son your mind. On more than one occasionthroughout our meeting, he turns the tableson me, asking ‘so, what do you think?‘


“The way I see our people owning risk isphenomenal. People really value riskmanagement. They know it matters andthey are working hard to really reduce risk.”


Homeward bound: some of thecrew onboard BP’s platform inthe Clair field, UK North Sea,prepare to return to shore,donning the personal protectiveequipment necessary for thehelicopter flight home.


THE ROLE OF THE DIVISION

The Production division is responsible for the stewardship ofBP’s resources and for managing safe, reliable and compliantoperations. The subsurface team advises on the quality andmanagement of BP’s resource base and portfolio decisions,with the aim of safely and efficiently developing resourcesinto reserves, reserves into production, and eventually toproduce hydrocarbons. The subsurface team is alsoaccountable for resource and reserves estimation andreporting. The operations function is accountable for all day-to-day management and maintenance of hydrocarbonproduction above the wellhead. The team manages logisticsand the activity planning process. In addition, regionalpresidents report to Bob Fryar and are responsible forintegrating production activities in their area; settingregional strategy; managing the external realtionshipswithin their region; and providing leadership to theirregional BP community.



is phenomenal. People really value riskmanagement. They know it matters andthey are working hard to really reduce risk.Fryar says he’s been thoroughly impressedwith the way that people have worked hardto make a difference.

“We also need to continue building thecapability and capacity of the team,” saysFryar. “This is a division that will grow in thefuture, so we’ll need more key, skilledemployees in areas such as subsurface, subseamaintenance and engineering. There’s a lot ofcompetition in the industry, especially in ourkey growth regions, such as Angola and theGulf of Mexico, but we’re taking a systematicapproach to growing this capability.”

Operational performance is alsofurther enhanced thanks to theupstream’s new structure. But, with

the growth in BP’s scale over the pastdecade, a new centralised, more functionalmodel is now required

The impact of this functionalorganisation is already being felt across the

division and Fryar cites its turnaroundperformance as an example of significantimprovement. Turnarounds, or TARs asthey are known, are standard practice inthe oil and gas industry and are planned,periodic shutdowns (either total or partial)of a facility in order to performmaintenance and repairs, and to inspect,test and replace materials and equipment.In 2011, BP carried out an expandedprogramme of 50 turnarounds as part of itsdrive on risk management and safety. OurTAR performance is improving all the time.In 2010, 35% of the production group’sTARs were on time and on scope. In 2011,that had risen to 82%. “We have improvedour readiness assessment process for TARs.This means that we have a rigorous processto complete the planning and prepare theresources in advance of a turnaround. Thishas tremendously improved our efficiency.In addition, he explains, “we now have one,systematic way of conducting a TAR.”

BP’s Operating Management System(OMS) is set to provide further consistency,

with each of the upstream’s major, globalfunctions – such as wells, operations, orprojects – all implementing OMS that willbe followed systematically everywhere inthe world. Each of the Production regions,meanwhile, will have a tailored local OMSto ensure their day-to-day operations takeinto account any unique, local regulations.“OMS is the way we will run our business,”says Fryar.

With all the focus on drivingconsistency to deliver long-termvalue, it’s sometimes easy to

forget that BP continues to produce oil andgas every day. The focus in the US remainson the company’s response to theDeepwater Horizon accident, with clean-upoperations continuing and BP workingwith industry groups to help shape futureregulation. But at the same time, BP haseight installations out in the Gulf ofMexico that have continued to producehydrocarbons since the incident. Thatproduction has declined, largely due to the

“There’s a lot of competition inthe industry, especially in ourkey growth areas, such as Angolaand the Gulf of Mexico, but we’retaking a systematic approach togrowing [our] capability.”



ban on drilling. “The problem with thenature of the reservoirs in the Gulf is thatthey decline very quickly if you don’t keepdrilling wells. The production drops fastwithout that,” says Fryar who is optimisticthat production levels will eventually growagain now that drilling has restarted.

Meanwhile, over in Angola, theProduction division has faced a different setof challenges. For the past year, productionat the Greater Plutonio field was reducedwhile integrity maintenance was carriedout. Production eventually returned tonormal levels last October, with the fieldnow running at around 170,000 barrels aday. “That’s important for BP,” says Fryar,“because it is a material piece of businessfor us, with high margins and it’s anexample of where we’re restoring value forshareholders.”

It’s also part of the company’sdetermination to restore trust. Stoppingwork is an important part of our operationsstrategy, and Fryar, like the rest of BP’ssenior leaders, is adamant that it’s the only

Joint effort: operators at work in thecontrol room onboard BP’s Na Kikaplatform in the Gulf of Mexico (farleft); crew members on theDeepwater Gunashli platform in theCaspian Sea, Azerbaijan (middle);operators onboard the Cassiaplatform in Trinidad and Tobago(left). Above, Bob Fryar speaking atthe BP’s Global OperationsConference, 2011, in Florida, US.

“Each of us is a steward ofthis company – we’re hereto make it better. It’s notabout being a hero, butabout reducing defects andcontinuously improvingour operations day-by-day.”

option if there is a concern over safety. “BPhas a much greater bias to operatorshipthan most of its peers. If we want to restoretrust, people have to believe we’re safe towork with. You do that by operating safelyand reliably. We have a big operationalfootprint and that’s a big responsibility.”

Ultimately, it comes back to thosevalues, in particular, courage.“People have to speak up. Being a

safe, compliant and reliable operator is notjust a process, it needs to be a deep-heldbelief that every day you’re going to go anddo what you can as an individual to makethe company safer and, in turn, the businesswill benefit. BP is going to be around for along time, so we need systems that help usmanage our facilities that will still operatesafely and reliably for years to come. Eachof us is a steward of this company – we’rehere to make it better for the long term. It’snot about being a hero, but about reducingdefects and continuously improving ouroperations day-by-day.” ■


Report> Amanda Breen Photography> Richard Davies

Over the past 18 months, a very specialgroup of young people from across theUK have taken part in a BP-supportedprogramme to help develop theirinterpersonal and leadership skills,while making a difference in theircommunity in the run-up to the London2012 Olympic and Paralympic Games. BP Magazine meets some of these YoungLeaders to find out what drives them.

LEADERS OF THE PACK

Young talent: clockwise fromtop left, Katie Slocombe,Tommy Seagull, LaurenMacLeod and Lewis Poskitthave all taken part in theYoung Leaders programme.


“Choose London today, and you send aclear message to the youth of the world:more than ever, the Olympic Games are foryou,” Coe said at the Raffles CityConvention Centre in Singapore, in July2005. Six years later, that vision to putyoung people at the heart of the London2012 Olympic and Paralympic Games isbecoming a reality.

People of all ages from across the UKhave been taking part in the selectionprocess to become one of 70,000 GamesMakers – or volunteers – who will helpmake the sporting showcase happen thissummer. Some of the youngest hopefulswill be a group who have spent the pastyear taking part in a BP-supported intensivepersonal development initiative, theLondon 2012 Young Leaders Programme.

From the communities surroundingfour of BP’s UK offices, the 100teenagers who won places on the

programme have been working in teams tomake a difference in the areas where theylive and to engage their peers in theactivities. Some have renovated dilapidatedcommunity gardens, while others havehosted sports events for people who wouldnot usually have an opportunity toparticipate.

All the projects have one thing incommon: the ideas have been conceivedand put into action by each young leader –with support from partner organisations,including the London Organising

When Sebastian Coe made the closing speech forthe UK capital’s bid to host the Games of the XXXOlympiad in 2012, he told members of theInternational Olympic Committee that London’svision was one of ‘inspiration and legacy’.

Committee of the Olympic and ParalympicGames (LOCOG), BP, v – the national youngvolunteers service – and the Dame KellyHolmes Legacy Trust. The programmeoffers 18 months of training, designed toimprove interpersonal, communication andleadership skills, with BP staff acting ascoaches to provide guidance to eachindividual.

The culmination of the programmecomes with the chance to be part of theOlympics and Paralympic Games involunteer roles, as all the teenagers areguaranteed a Games Maker interview.Those selected will be able to put theirnewly-acquired skills into practice inLondon later this year.

“You are all on a journey that will carryon until the Games and beyond,” Britain’sdouble Olympic champion Dame KellyHolmes told the young leaders on the eveof their Games Maker interviews in eastLondon, in August 2011. For many, it wasthe first time they had had to face a formalinterview, and they were gathered for somefinal preparation to help them express whytheir experiences will make them an assetto the London 2012 Games.

“Every single thing you learn this yearwill help build you as a person, make youmore confident and become a role model inyour community,” said the two-time goldmedal winner, whose legacy trust providesathlete mentors to work with the youngleaders. “If you have been good already, bebetter. Make yourself feel proud and make

every person you meet at the Games think‘they were great’ – you might make theirday, but it will make your life forever.”

Dame Kelly later explained why shewanted her trust to be involved in theYoung Leaders Programme. “What I likeabout it is the amazing opportunity itprovides for them to change themselves,and to take part in something that is onlylikely to happen once in a lifetime.

“I’ve seen a huge change in the youngleaders since the first residential event inApril 2010; when I first met them, they werevery quiet and for some, coming to Londonwas a culture shock. Now, the difference islike night and day. This time, they’re togetherto reflect on what they’ve already learnedand to hone their interview techniques.”

Following a day of activities designedto help them focus on theirprogramme experiences and identify

when and where they have put differentskills into action, BP leadership coachesprovided a final challenge, by staging mockinterviews. Like the teenagers, staff say theyhave learned plenty from the programme.

“I’ve really enjoyed being involved, asit’s provided good insight into the mindsetof the younger generation and people fromvery different backgrounds,” says GarethJones, of BP’s Integrated Supply andTrading business, at Canary Wharf inLondon, who coaches Tommy Seagull (see page 53).

“The highlight for me was attendingTommy’s project launch for his studycorner at Royal Docks School, East London;it was great to see the programme come tolife, with the young leaders creating the‘legacy’ element that we hear about forLondon 2012.”

On the other side of the city, based atBP’s Sunbury-on-Thames offices, TimPodesta, from the safety and operational

“Every single thing you learnthis year will help build youas a person, make you moreconfident and become a rolemodel in your community.” Dame Kelly Holmes

»

Name: Lauren MacLeodAge: 18From: Stonehaven, AberdeenshireCommunity project: mentalhealth awareness with secondaryschool pupils

Lauren lives in supportedaccommodation, after becominghomeless aged 16. She wanted to run aproject to challenge some of themisconceptions around mental health.“It’s something I’ve had experience of,but the subject is not usually addressedin schools. I’ve seen how people can bestigmatised by mental health issues; atthe end of the day, we’re all just peopleand have some problems.”

She says the highlight of theprogramme is the opportunity to beinvolved in the Olympic Games. “We’rethe only Young Leaders team fromScotland, so we’re representing thewhole country. I feel like I’m part ofsomething amazing, among a group ofpeople who are passionate about thesame thing.”

Name: Katie SlocombeAge: 18From: Reigate, SurreyCommunity project: 10-pinbowling for disadvantagedchildren with local YMCA

As a young carer to her autistic brother,Katie wanted to be part of the YoungLeaders Programme to meet new peopleand share her experiences with others.“It’s good to have a break and I’velearned that you don’t have to cope withthings on your own,” she says.

“It’s been a great way to buildconfidence; mine still isn’t the best, butit has improved through publicspeaking and appearing on camera forthe London 2012 Open Weekend.”

Her local Young Leaders team has runa Christmas alcohol awarenesscampaign for 1,800 college students andher own project gave 10- to 16-year-oldswith learning difficulties the chance tohave some fun at a bowling alley.



Name: Lewis PoskittAge: 18From: Hull, YorkshireCommunity project: sports courseto coach people with disabilities

Lewis admits that sport is the big thingin his life; “it’s all I really do,” he says. Heplayed rugby from the age of six, andnow concentrates on coaching childrenas a volunteer with Hull Football Club.He hopes his project will raise awarenessabout the Paralympic Games: “I want togive people a chance they wouldn’tnormally have, and put a smile on theirfaces.”

Meeting a double Olympic championlike Dame Kelly Holmes has been “reallyinspiring,” he adds. “She makes us feellike we are important, encourages us towork hard and reminds us that we havequite a bit of responsibility.”

Improved self-confidence has beenjust one of the positive outcomes of theprogramme so far, Lewis believes, aftergiving a speech, along with anotherteam member, to Bank of America staffand guests at a benefactors’ evening inLondon’s Canary Wharf.

risk function, agrees that interaction withyoung people has been rewarding.

“It’s quite inspiring to see how theyoung leaders are developing,” says Tim,who works with university student AnjaliParshotam, from Hounslow. “The challengehas been making sure that the coaching isadding value and finding the rightopportunities to support Anjali. We met forsome interview practice and I set up acareers session with a BP education liaisonofficer. The one thing that struck me aboutAnjali is how quickly she has picked up onadvice I’ve given her and then applied it.”

Anjali recognises the benefits of havingthe mentoring support. “It’s been reallygood in bringing out the best in me. Timmakes sure we are in regular contact and,as I’m considering a career in teaching, he’soffered some help in finding out more.”

As for why she wants to be a GamesMaker, the 18-year-old says it’s more thanjust about the sport. “I want to inspire otheryoung people to look at the bigger pictureand see that the Games are a great way tounite London, the whole country and therest of the world.”

The fact that all the young leadershave juggled, at the very least, schoolstudies and extra-curricular activities

with their community projects – and inmany cases, other obligations, such as part-time jobs, youth clubs, or demanding familycircumstances – signals their commitment,not only to London’s hosting duties, but toimproving their neighbourhoods.

Meeting only a matter of weeks after aminority of young people in cities acrossthe UK made global headlines for all thewrong reasons last summer, many youngleaders were aware that the programmealso allows them to demonstrate how theirgeneration can have a positive impact.

“There’s a lot more young people doinggood things in their communities than arerecognised,” says Matt Hutchings fromGreenwich, London, who is also a scoutleader and hockey coach. “Sometimes,we’re not taken seriously because of ourage, but once we break down barriers andget to know locals, it gets easier.”

For Dame Kelly Holmes, initiatives suchas the Young Leaders Programme can makea difference. “When most young people aregiven a good opportunity and somestructure, they can really excel.

“Young people are our future and wewant them to feel they have a purpose,whatever they do. Then, they can thrive onthe knowledge that they’ve made animpact.” ■

Name: Tommy SeagullAge: 18From: London Borough of NewhamCommunity project: study cornerand book collection in an inner-city school

“Our job is to break down barriers andhighlight the importance of youngpeople in their communities,” saysTommy, who has grown up virtually onthe doorstep of the Olympic Park in eastLondon, and can see the Aquatic Centrefrom his brother’s flat.

Tommy won a scholarship to theprestigious Eton College in 2010, butreturned to Newham to run his project,where his efforts collected 96 second-hand books from pupils finishing theirschool exams for use by future students.He also ran revision seminars, bybringing other young leaders into theschool to share advice.

“It’s been a journey and not all plainsailing, but that’s the whole point,” hesays of the Young Leaders experience.“We started out somewhat less confidentand my organisational skills weren’texactly top notch, but we’ve come so far.The sense of satisfaction that comesfrom organising a project is reallyspecial.”



BP’s treasury team moves around $1 trillion every year,acting as the company’s in-house global bank. Having comethrough the downturn of 2008 and the financial challengesof 2010, following the Deepwater Horizon incident, it is nowpreparing itself for further uncertainty in the global financial markets.

THE TRILLIONDOLLAR TEAM

Report> Helen CampbellIllustration> Alex Williamson

➔ e c o n o m i c f o c u s Finance> BP Treasury

BP’s treasury team has been compared to amarathon runner, highly trained, highly focused – but facingnumerous obstacles along the way. Instead of tight bends,twisted ankles and the need for sheer stamina, the treasuryteam faces the challenges posed by changing economicconditions and events affecting business.

And, just as the marathon runner needs to be ready for adownpour or a heatwave, BP needs a treasury for all seasons,prepared for the everyday challenges, as well as the low-risk,high-impact events.

Over the past couple of years, BP has faced both the 2008global economic crisis and the financial challenges presentedby the Deepwater Horizon incident in 2010. Since then, it hasstrengthened its balance sheet by building significant liquidity,and regained considerable market confidence. Once again, theexternal financial world is facing turmoil, but this is verydifferent from 2008. However, says BP’s group treasurer from2007 to 2011, Dev Sanyal, the company is well-prepared.

“What tipped things over in 2008 was [the collapse of]Lehman Brothers. This time, it is not one defining event, butmultiple signals, linked to sovereign states,” says Sanyal, whois now BP’s executive vice president and group chief of staff .“The financial world is adjusting to what I call the ‘newnormal’, with a far greater degree of market volatility. Thebandwidth of possible outcomes is substantially wider now,and this brings into sharp contrast the consequences of over-achievement and under-achievement in decision-making.”

Volatility is what drives trading on almost any market. Itcan bring both risk and opportunity. The ability to assess therisks, take proportionate action to mitigate them, and be ableto spot and take advantage of opportunities, when they arise, iscentral to effective, efficient and successful financialmanagement. The centralised position of BP Treasury gives itclear line of sight to the financial exposures of the wholegroup, something that has become even more important in thecurrent uncertainty.

“In a volatile environment, actions can cause exaggeratedreactions,” Sanyal says. “You have to have a clear idea of theirintended and unintended consequences. I spend most of mytime thinking of the latter. There is a need to be nimble andagile, prudent but not conservative, if you are not to get caughtout, or be left behind. This is the challenge right now.”

“There is a need to be nimble and agile, prudent butnot conservative, if you are not to get caught out, orbe left behind. This is the challenge right now.”Dev Sanyal


»


Finance> BP Treasury

BP Treasury has multiple short- andlong-term financial functions, includingraising debt through bonds, managingcorporate risk by hedging the group’sforeign exchange exposure, providinginsurance and managing the group’spensions fund. But its primary remit is toact as BP’s in-house global bank, ensuring ithas the right funding, liquidity andcurrency in the right amount on the rightday, and in the right place.

This centralisation is key to the way thatBP’s treasury team interacts with theoutside world, according to deputy grouptreasurer, Nick Bamfield. “The typicalmodel that we use, wherever we can, is tofund ourselves centrally,” he explains. “Thisallows us to use the strength of the group’sbalance sheet and credit rating, so that wecan issue directly into the global directcapital market. Banks tend to have highercosts of borrowing, so this allows us to godirectly to investors issuing bonds.”

BP Treasury moves around $1 trillion ayear, roughly the equivalent of the Russianeconomy; issues an annual $10-15 billion ofdebt in a variety of different markets; andmanages some $40 billion in pension funds.Dim sum (China), Samurai (Japan), Yankee(US), Maple (Canada) and even Kangaroo(where else but Australia?) are the financialworld’s nicknames for some of the bonds ithas issued on behalf of the group.

“We have two goals when issuing intothe bond market,” Bamfield continues.“First, we want to be seen as an issuer ofchoice, not need, and second, we want tomaximise our opportunities, so wediversify the markets we issue into.”

BP’s global asset base requires globalcapability. Its centralised treasury functionhas around 200 people in London,Singapore, Houston and Chicago. Thisstructure enables it to think globally, butreact very locally in the markets. KeepingBP’s treasury leadership informed, at theright time and to the right depth, of what ishappening across world financial marketsis key to determining the right action. Aswell as executing BP ‘s financial trading

needs and decisions, the 30-strong treasurytrading team keeps abreast of worldeconomic news, whether it’s the lateststatement by Germany’s chancellor, or theimminent collapse of a bank, and theirimplications, if any, for BP.

Nick Slater, vice president, treasurytrading says: “Our primary responsibility isto execute the corporation’s orders and togive advice. We know exactly where thegroup’s cash is at any time and, therefore,should developments take place that couldaffect debt markets, we are there to informstraight away on whether we need to makeany interventions.”

To make those fine judgments requiresprofessional financial capability of thehighest standard. There was no textbook forDeepwater Horizon, an event that saw BPviewed for a time as a distressed company.At one point, BP’s credit default swaps(CDS) – a key barometer of the perceivedrisk surrounding a company (the higher theCDS, the higher the risk) – was trading at1,100 basis points, when a so-called ‘junkstock’ would be around only 400.Recovering from that was a phenomenalachievement, brought about by capability,not luck, Sanyal acknowledges.

“Coming back from that event, as we did,”he says, “required profound understanding ofthe group and markets, coupled with thedeep confidence that comes from having in-house capability. A crisis is not the time to bebringing in new technologies or capability.

“At the time, we already had deep, real-time understanding of our exposures,”Sanyal says. “We raised capital very quickly,and were able to demonstrate BP’srobustness and regain the confidence offinancial markets. We had to act quickly,decisively, but also appropriately andproportionately.”

Looking at the challenges experiencedsince 2010, Brian Smith, vice president,structured finance western hemisphere, says:“Obviously, what is being witnessed inEurope currently has created a certainamount of angst in the financial system. Weare ultimately trying to match global capital

PARTNERS FOR ALL SEASONSBP has a group of more than 20‘relationship banks’, including most ofthe large international banks and ahandful of niche institutions. Nurturingthese important relationships is anessential part of BP Treasury’s activity,and some of those relationships go back decades.

“We believe that it is important tohave a set of banks that you have long-term relationships with, and you buildthat over a period of time,” says GilesHorner, banking relationship manager,who has now moved into structuredfinance. “The group includes US,European, Chinese and Japanese banks,and was selected to ensure we haveexcellent coverage wherever we are inthe world. Emerging markets where BPis potentially looking to forge newbanking relationships and additionalsources of liquidity include the MiddleEast and India.”

Ensuring the banks are well-informedabout BP’s plans, and positioned to bidcompetitively for business, is essentialfor both parties to optimise therelationship. Having partners for allseasons in the banking world was nevermore crucial than in 2010, when, in theaftermath of the Deepwater Horizonincident, BP Treasury helped raise $17 billion of standby facilities.

“We invest in our relationships.Because they knew BP well, our corerelationship banks were able to takemuch more considered risks than thefinancial markets, and they recognisedopportunities, too,” says Sanyal. “Theywere very willing to support BP withvery substantial amounts, at anextraordinarily challenging time.”


with our funding requirements, andunderstand the composition of that maychange from year to year. We must be in tunewith where the money is moving. Change isnot always bad, as it brings new lenders whoare willing to invest. We need to continue tobe nimble, and we are doing just that.”

Natalie Costello, Smith’s easternhemisphere counterpart, says a keydevelopment in the past-year-and-a-halfhas been a significant increase in thecommitted trade finance facilities, in theform of letters, available to BP.

“Letters of Credit are critical to the waywe do business with counterparties, as theyprovide some certainty of payment,”Costello says. “We now have a substantialportfolio of committed facilities, 10 timesthe levels we had before the DeepwaterHorizon incident.”

Some of the greatest potentialopportunities to capitalise on burgeoningeconomies are in Asia. BP’s finance teams arealways looking out for the right investmentopportunities, but decisions are alwaysappropriate to the situation and alwayssolidly underpinned by the ‘guardrails’ of thegroup’s financial framework.

“We also issued our first Renminbi bond[in China] this past September,” saysCostello. “Asia is a big growth area for BPand broadening our ability to accessfunding globally is very important to us.We have built capability in how weapproach these new markets, in ensuringsolid understanding of matching fundingsources with BP’s funding needs, and inflawless execution.”

BP Treasury’s insurance arm also plays akey part in managing the company’sexposures. With few exceptions, BP’s globalinsurance strategy is not to buy insuranceon the external market unless required to bylaw or contract, and, instead, to self-insure.

David Anderson, vice president,insurance risk solutions, explains why: “Forthe types of risk a company such as BP has,including offshore platforms, majorrefining complexes, a lot of the supplychain, there is not enough insurance

capacity in the market. More and more oilcompanies are taking on insurance riskthemselves. BP has been doing this since1991, so we have the experience. We believethis is an efficient way of doing things.”

BP annually underwrites as muchinsurance risk as one of the three biggestUK property and casualty insurancecompanies, through its own insurancecompanies, Guernsey-based Jupiter Ltd, andSaturn Insurance Inc., a more recentaddition to the insurance capability,located in Vermont, US.

“BP Treasury is a logical place forinsurance risk to sit as it manages thefinancial exposures of the group,” explainsAnderson. “We have 12 people in Londonand four in Chicago, who are responsible forall insurance purchases worldwide for BP.”

BP buys insurance for the thousands ofcontractors that might be working on aproject or development at many of BP’srefineries, giving it enhanced sight of anyincidents, claims and areas forimprovement. BP Treasury is also workingon putting into place insurance riskvehicles for platform decommissioning, tofurther enhance the group’s understandingand mitigation of all its exposures.

“We have firm financial policies, theglobal oversight, the professionalcapability and the liquidity needed toweather the different kinds of crises thatwe could face, and also to chaseopportunities that may arise,” says Sanyal.“It’s about having the right balance ofpessimism and optimism, and being reallyclear about allocation of risk as you driveopportunities and reward.”

Marathon running is all aboutpreparation, training, focus and pace;knowing when to keep something inreserve and recognising the right time tospeed up and grasp opportunities, to getahead of the field. Market windows, bydefinition, open and close. Whatever theexact nature of the course as the currenteconomic downturn continues, BP is well-placed to manage the financial bends andtwists and the dips in the road. ■

“First, we want to be seenas [a bond] issuer of choice,not need, and second, wewant to maximise ouropportunities, so wediversify the markets weissue into.”Nick Bamfield

THE IN-HOUSE GLOBAL BANKEvery day, BP Treasury pulls in cashgenerated – usually worth many billionsof dollars – by BP’s various businessesaround the world and, then, managesthe redistribution of that funding,according to business needs. This issomething that other companies’treasury operations tend not to do, andthis centralisation gives BP an edge interms of constant oversight of its globalcash situation.

“We bring into Treasury as much ofthe group’s cash as we can, and everyday we fund the businesses that needcash,” says Barry White, cashmanagement and banking projectsmanager. “Every day, we produceinformation on how much cash BP has,and we also forecast how much cash BPis going to receive [from its businesses],and, therefore, the group’s liquidity. Thisis an important part of how BP canrespond to changing marketconditions.”

The team works daily with the cashand banking managers in eachindividual country in which BPoperates. This is the daily operation ofBP’s ‘in-house global bank’, and issupported by the treasury managementsystem, Wall Street. With marketsbecoming evermore sophisticated, BPhas recently updated the operatingsystem underpinning Wall Streetthrough Project Damascus.

“We have used Wall Street since theearly 1990s, and it has provided us withan excellent base on which to operate,”White says. “Project Damascus was amassive undertaking and replaced agingtechnology with up-to-date technology,re-engineering the interfaces we havewith various other systems, andprovides the platform for Wall Street tocontinue to support the in-house bankgoing forward.”


➔ in n o v a tio n

Digital solutions:Chief technology office

A TV reality show whereentrepreneurs pitch their inventionsto multi-millionaires is a worldwidehit. The investors are called Dragons inthe UK, Sharks in the US and Tigers inJapan. BP’s own version is a differentanimal altogether. The company’schief technology office has no TVoutlet and a small budget. But, like thestars of the shows, this 12-person teamis famous for bringing a raft of digitaltechnologies to prominence, includingthe Wave Glider that helped supportlast year’s Deepwater Horizonresponse. Its success has leftcompetitors and business gurus keento capture the team’s ‘secret sauce’.

SHARINGTHESECRETSAUCE

Report> Jaclyn ClarabutPhotography> Harrison McClary/Richard Davies/Marc Morrison


Track and trace: Roger Hine (left), ofLiquid Robotics, discusses his

company’s Wave Glider technologywith BP’s Mike Utsler, who is head of

the Gulf Coast RestorationOrganization, during last year’s oil

spill response in the Gulf of Mexico.The device is used to track oil and

was identified by BP’s chieftechnology office.

Innovation: CTO


These polar conditions are home to BP’sPrudhoe Bay facility; the largest oilfield inNorth America, supplying a significantproportion of the country’s domestic oilproduction.

The facility covers an area of 48 by 32kilometres (30 by 20 miles), and workersrely on 4x4 pick-up trucks for transportaround this major oil field, which is thesize of the smallest US state, Rhode Island.With conditions this harsh, it’s vital tokeep track of the movements and locationof every vehicle on the Slope.

Prudhoe Bay’s fleet maintenance lead,Ken Lyman, says: “We had a system, but weneeded something more reliable and muchmore accurate. Finding the right kind ofdigital device was way outside of ourexpertise.”

That’s where BP’s chief technologyoffice (CTO) comes in. Made up of just 12people, it seeks to match the needs of BP’sbusinesses with the latest cutting-edgedigital technology that has practicalapplication. Its mission, in this case, was tohunt down a technology that could act asthe eye in the sky, monitoring vehicles infar-flung locations, where you can’t alwayscount on a mobile phone signal and usualtracking solutions would freeze.

However, a tragic twist of events twoyears ago extended the CTO’s mission to finda device that would not only track vehicles,but also alert drivers to dangerous situations.

CTO technology director Curt Smithworked on the project. He explains: “Workerson the Slope keep their trucks running whenparked on a job site to keep them from

The North Slope in Alaska sees some of the harshestweather on Earth, with temperatures in winter falling toa lethal -50ºF (-46ºC), and blizzards in this remotelocation reducing roads to a grey outline.

freezing. Occasionally, they forget to put thevehicle in park mode, or they have a faultyindicator reading. One worker went out tomark an inspection location on the pipelineand, inadvertently, left his vehicle in gear. Histruck idled to keep warm, rolled forward, andcrushed him against the pipeline.”

Smith talked to Faria WatchDog, thesupplier he had found for vehicletracking on the rugged Slope, and

asked them to modify their system toaddress this new safety problem. Now, if adriver opens the doors while the vehicle isnot in park, the horn starts beeping. Theonly way to shut it off is to sit back in theseat, put the car in park and close the door.This makkes it virtually impossible for thedriver to get out with the car in gear andthe motor running. There have been no‘runaway vehicle’ incidents since theprogramme was installed.

With vehicles and drivers tracked andtraced, the project was expanded again tokeep tabs on rented equipment, such as aircompressors, heaters and tanks that are


»

Harsh terrain: vehicles out on Alaska’sNorth Slope, home to BP’s Prudhoe Bay

facilities. Track and trace technologyidentified by CTO is helping keep an

eye on teams in this remote location.

“It is our role to getsolutions developed byengaging the extremelybright people out in thewider world. When youengage the best minds on achallenging problem,amazing things emergethat once seemedimpossible.”Phiroz Darukhanavala

used on the Slope for maintenance andconstruction jobs. The equipment servicesgroup spends around $120 million eachyear on rentals. Making sure the equipmentis available for every job, used efficientlyand returned to the hire shop on time cansave $6million a year.

The technical challenge, here, wasdifferent from the driver safety project, andthis time, CTO found a Geoforce GPS andradio frequency identification system(RFID) from its vast pool of technologyconnections. Now, a satellite trackingdevice is magnetically attached to themetal equipment. “Dispatchers can seewhere every piece of equipment is andretrieve and return it exactly when theyneed to,” Smith explains.

Lyman is quick to praise the solution.“The CTO added a lot of value becausetechnology is something they deal with ona daily basis,” he says. “We’re really just inthe equipment business, so don’t haveaccess to tech advances. It’s good BP has anoutlet that can provide that service to us.”

In the warmer climes of Northern

California is Silicon Valley, home to manyof the world’s largest technologycorporations. It’s here that a boomingcommunity of venture capitalists providedthe inspiration behind the CTO teammodel that chief technology officer PhirozDarukhanavala (‘Daru’) set up a decade ago.Since then, the small team has had a bigimpact by matchmaking new digitaltechnologies with particular BP businessneeds. Solutions have ranged frompredictive analytics that preventequipment failures in refineries, toimmersive 3D training on bakingdoughnuts and cooking hamburgers forampm mini-market employees.

“When we speak to external audiences,the first question is always, ‘what is yoursecret sauce?’” says Darukhanavala.

Some of those asking the question, headds, are people who have large in-houseinnovation teams. “Very large in-housecapability was not going to work for us.The pace of change in digital technology istoo fast for that. If you build a big group,people become experts and enamoured

with a particular technology and,meanwhile, the technology moves on.Suddenly, you can have a stranded base ofpeople who are now fighting change ratherthan making it happen. They become theproblem rather than the solution.”

The structure that appealed most wasthe venture capital model, where ateam might have six partners, but a

network of hundreds or thousands whokeep them informed on emergingtechnologies. Adopting this approach,Darukhanavala says: “We are the first todeclare that it is not our role to inventsolutions. It is our role to get solutionsdeveloped by engaging the extremelybright people out in the wider world, andwhen you engage the best minds on achallenging problem, amazing thingsemerge that once seemed impossible.”

A small team connected to a largeecosystem of external expertise is the heartof the CTO model. Another aspect is theteam’s lack of formal authority. “It soundsstrange,” Darukhanavala concedes, “but that

helps us be more effective. The businessesaccept new technology opportunitiesstrictly on their own terms. They arecompletely free to tell you to go away and,so, what we have created is an internalmarket, where only the best ideas survive.”

BP’s group vice president and chiefinformation officer, Dana Deasy,explains the team’s success: “I have to

admit I’ve marvelled at CTO’s model. It’sbeen described in books, hailed as bestpractice, and other companies have tried toreplicate it.

“So, what it is that makes the modelwork so well? The team is made up of asmall number of very connected, verysenior people who know digital technologyreally well, but who can also go to arefinery or an oil platform and talk thelanguage.”

The team has developed two sides to itsservice. The ‘intelligent technology push’,where the team brings new technologies toBP, and the ‘technology pull’ from thebusiness, where the team searches for a

solution to a particular business challenge. “People are not going to ask for things

they do not know exist, so we have to bringthose new possibilities to the table throughintelligent push,” says Darukhanavala.

CTO member Harry Cassar, who wasresponsible for introducing a revolutionarywireless sensing system to monitorequipment for BP Shipping, says:“Technology push has had a bad reputationin many companies, because people arejust trying to sell technology fortechnology’s sake. We understand that, andwe try not to do that. But if you are notfully aware of what can be done today, youwill only articulate problems that youthink can be solved. Once you understandwhat’s really possible, you can then say, ‘wecan build that into our business plansbecause it is feasible.’ That is why we dotechnology push.”

The other side of the coin is the pullprocess, where a business, such as theNorth Slope example above, partners withthe CTO. Senior leadership members sharesome of their most pressing business

Innovation: CTO

problems, and the CTO plies its ecosystemof leading thinkers and practitioners forpotential solutions from emerging digitaltechnology. “We find solutions sometimesfrom large companies, sometimes fromsmall organisations, and sometimes byjoining large and small companiestogether, to integrate and deliver brand-new technology solutions,” says Cassar,who was instrumental in establishing abusiness partnership with BP’s CastrolLubricants business unit.

Whether push or pull, CTO always aimsto act as a catalyst and bridge builder,introducing solutions from the outsideworld.

From their experience in Alaska, theteam had developed extensive knowledgeand contacts in the area of ‘track and trace’,and determined it could be what they call a‘game changer’. A game changer is a digitaltechnology that the CTO believes can havea wide and important impact on manyareas across BP, and becomes the subject ofan intelligent technology push.

The push was kick-started during the



response to the Deepwater Horizonaccident. CTO’s ‘track and trace’ expertisewas called into action during the spillresponse, when the company had todemonstrate that it had critical assets – oilskimmers and beach cleaners – in the rightplace at the right time.

CTO technology director Dave Truchwas called in to provide help in the crisis.He says: “This was about providingconfidence to the federal and stategovernment and regulators in the US.”

Quickly, the team was able to combinetechnology to deliver a system that usedGPS, RFID and software to track thelocation of skimmers and beach cleanersfor effective utilisation and deployment. Itwas a system that tagged thousands ofassets across approximately 30 storageyards in Alabama, Mississippi, Louisianaand Florida.

There are instances when the CTOteam is aware of technologies forsome time before the right

application emerges. Two years prior to theincident, the team was looking attechnology in the field of autonomousunmanned vehicles or, put simply, robots.It was then that Truch came across theWave Glider, developed by a companycalled Liquid Robotics. Originallydeveloped to listen to humpback whales,the glider looks like a surfboard, aroundtwo metres (six feet) long, and is poweredby harnessing wave energy.

Travelling at around 1.5 to 2.5 knots onaverage, these gliders are capable ofcarrying out unmanned sorties for a periodof 60 days. When Truch first saw the glider,it was highlighted as a possible technologyfor monitoring the environment around oilplatforms and in currents, which candisrupt operations.

But it never captured serious businessattention at the time. Now, with the worldwatching, the glider was ready to meet acritical need. “When the Deepwater Horizonaccident happened, one of the key elements

we recognised was the importance ofunderstanding the water quality. Then, whenthe well was sealed, it was understandingwhat measures could be taken to prove itwas truly sealed. We wanted to do constantmonitoring for that,” says Truch.

Liquid Robotics adapted the WaveGlider to take fluorometer readings atvarious depths to detect hydrocarbons andalgae, and added acoustic modems to detectmammalian life. Now, there are five unitsoperating in the Gulf.

Small, emerging technology companies,such as Liquid Robotics, often have a hardtime getting the attention of a company ofBP’s size, no matter how great their productis. Tim Richardson, founder of LiquidRobotics, appreciates the matchmakingrole CTO performed. He says: “BP is the bestmodel I’ve seen over the years. The CTO isset up to be very approachable and to giveoutreach and support, and they are verygood at that. They understand technology,but are experts in the needs of the companyand its broader environment. Hands down,they are the best.”

While the Wave Glider is undoubtedly afuturistic piece of kit, the team is adamantthat they never get seduced by the latestimpressive digital technology.

And even though the team sees up to150 new pieces of digital technologies ayear, sometimes in Dragons’ Den-styleforums, they are no geek squad. Smith says:“I’m not particularly interested intechnology for its own sake.”

Darukhanavala adds: “I’m not a gadgetfreak, and our role is not to play withgadgets; the common joke is that when Itravel, while most people are fiddling withtheir smartphones trying to find things, Ihave a little piece of paper in my pocket,which takes me to the next appointment.”

And there’s enthusiasm for that nextappointment, because the team just mightsee a new digital technology BP doesn’t yetknow it needs. As Truch says: “It is so goodto be able to find something that will makea difference to the company.” ■

“The team is made up of asmall number of veryconnected, very seniorpeople who know digitaltechnology really well, butwho can also go to arefinery or an oil platform,and talk the language.”Dana Deasy

Team effort: members of the smallCTO team during a recent meeting(left). Opposite, BP has now installedwireless sensors at its refineries thatcan measure the thickness of a pipe toa resolution of 0.1 millimetres, helpingin the fight against corrosion. Thesensors were another technologyidentified by CTO.


London 2012 Olympic & Paralympic Games

BP is supporting six British athletes as they prepare for the London 2012Olympic and Paralympic Games. Road and track cyclist Lizzie Armitsteadwas still at school in 2005, when the UK capital was named the host city forthe Games of the XXX Olympiad. Her natural ability for pedal power wasspotted during a talent identification programme, and she swiftlyprogressed through junior and under 23 ranks.

THE PURSUIT OF EXCELLENCE

➔ BP in partnership


Report> Amanda BreenPhotography> Action Images

Hot pursuit: British cyclistsLizzie Armitstead (left), Wendy

Houvenaghel (centre) andJoanna Rowsell compete in the

women’s team pursuitqualifications at the UCI TrackCycling World Championships,

in Copenhagen, Denmark,March 2010.

LIZZIE ARMITSTEADSport: cyclingEvent: road raceAge: 23 Main achievements: 2009Track World Champion inteam pursuit; silver medalfor scratch race and bronzefor points race; three goldmedals in the 2009 TrackWorld Cup series; 2010Tour de l’Ardèche threestage wins and Tour del’Aude one stage win;Commonwealth Gamessilver medallist for roadrace; 2011 UK nationalchampion in points andscratch races; British roadrace national champion;stage one winner Tour ofChongming Island; andstage six and pointsclassification winner,Thüringen Rundfahrt.


On working as a team tosupport an individualrider…

In road cycling, there aredifferent types of riders, suchas sprinters, climbers or‘engines’, as we call them –those who are very good onflat, long, hard races. A teamsits down before a race tolook at the course, to decidewhich athlete is best suitedto that route and who couldproduce a winning effort atthe finish line.

At the Road WorldChampionships inCopenhagen last September,it was a flat course and weknew it would come down toa sprint, so the GB teamdecided to work for me. Thatmeans it’s usually someone’srole to chase down anybreakaways and a couple ofother cyclists positionthemselves around thesprinter in the bunch. Thoseriders basically protect youfrom the wind, as it can be30% harder out in front thansat in a wheel.

I’m really disappointed aboutwhat happened inCopenhagen [Lizzie was heldup behind a crash in the lastkilometre of the race andfinished seventh]. It’s such ashame to lose a race that way,when I was feeling so good,and was in the nice positionto have the team committedto working for me. Theexperience in Copenhagen isgoing to be good motivationfor me during the horriblewinter training sessions.

She’s now considered one of Britain’s best youngendurance cycling stars and is among a rare group ofriders who competes both inside a velodrome and on theroad. Having turned professional in 2009, Lizzie has spentthe past two years riding for the Garmin Cervélo ProWomen’s team. After being forced to make the choicebetween the velodrome and road for London thissummer, Lizzie, with advice from the British Cyclingcoaches, chose the road as her slightly stronger discipline.


On trying out a bike toescape classes at school…

Cycling was never a hobbywhen I was younger. I’ve got avery active family andsummer holidays wouldalways involve taking bikeswith us, but only as a meansof getting from one place toanother.

I was 16 when London wonthe Olympic and ParalympicGames bid. At the time,British Cycling, the sport’sgoverning body, set up theOlympic Talent TeamProgramme, which involved atrailer full of bikes visitingschools and testing outstudents on their playingfields. I did it just to get out oflessons basically! I gotthrough all the rounds oftesting and at the final stage,you were given a bike and acoach.

I’d always done every kind ofsport and I was in all theschool teams, but never thebest at anything. It was niceto find the sport that Iexcelled at.

Team spirit: Joanna Rowsell,Wendy Houvenaghel and Lizzie winsilver in the women’s team pursuitat the 2011 UCI Track Cycling WorldChampionships, in Copenhagen,Denmark, March 2010 (left). Below,Lizzie competing in the Road WorldChampionships, October 2010.


TRACK ENDURANCE EVENTS EXPLAINEDTeam pursuit: Two teams of three riderscompete over 12 laps (four riders in men’sevent over 16 laps), starting on oppositesides of the velodrome. The goal is to coverthe distance in the shortest time, or tocatch the other team.

Points race: Mass-start, long-distance raceof 100 or more laps, with a sprint every 10laps. Points awarded for top finishers ineach sprint, winner holds most points byend.

Scratch race: Over various distances, up to20 kilometres (12 miles), riders start onequal terms and places are based upon thefinal order across the finishing line.

Omnium: new to the Olympicprogramme, replacing the points andscratch races. This event features riderscompeting across six disciplines – pointsare awarded in each race, according toposition: the winner gets one point, thesecond-placed finisher scores two, and soon. After all six disciplines, the rider withthe fewest points wins gold.

On the renaissance in British cycling…

I’m really lucky that I came into cycling at a time whenthe sport here was on the up, after the GB team won somany medals in Beijing. I’ve always been supported byBritish Cycling, and I learned everything I know fromthem. It’s also been easier to explain to friends and familywhat I do for a living because the sport has more exposureon television and in the media.

When I first started out, it was difficult to find people totrain with, but that’s definitely changed over the past fewyears. I’ve always got training partners now, and it’sgreat to see so many cyclists out on theroads. This summer, I’m lookingforward to having the home-crowdsupport in London. I think itwill bring people together intheir excitement for sport.

Medal winner: Lizzie (left)at the women's BritishNational Championshiproad races, which she won,June 2011. Right, as part ofBP’s Olympic andParalympic Gamesadvertising campaign.

BP AND LONDON 2012As the Official Oil and Gas Partner for the London 2012 Olympic and Paralympic Games, BP will provide fuels and engineoils for more than 5,000 official vehicles, as well as bottled gas for catering facilities at venues. BP is also a SustainabilityPartner, with a key role in creating a lasting legacy after the Games end. Advanced fuel options will help power the Games’fleets and as the Official Carbon Offset Partner with Target Neutral, BP’s goal is to make sure that the carbon emitted fromvehicles will be offset, helping to make London the most sustainable Games yet. London 2012 ticketholders can offset thecarbon emitted as they travel to and from the Games by registering at www.bptargetneutral.com

Arts, culture and education have played important parts in the Olympic movement since its foundation in ancientGreece. In BP’s role as a Premier Partner of the London 2012 Cultural Olympiad, it continues the long-time support of theseareas, during events such as the London 2012 Open Weekend and the Tate Movie Project.

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


Race leader: Lizzie leads thepack in the women’s omniumpoints race at the UCI TrackCycling World Cup inManchester, UK, February 2011.

On being a BP London 2012athlete ambassador…

I’ve really enjoyed gettinginvolved in some of BP’sprogrammes related toLondon 2012. I’ve workedwith a group of young peoplewho were looking at the mostsustainable way to travel tothe Olympic and ParalympicGames, as part of BP’s TargetNeutral initiative. I was onthe judging panel for that,although I didn’t like havingto pick a winner, as they wereall brilliant.

It’s really nice to have theopportunity to work togetherwith BP on projects like that,as it takes me out of what I’mdoing in cycling and makesme realise how lucky I am tobe part of the OlympicGames.

On living out of a suitcase…

There’s so much travelling for cycling, but because thecompetitions we do are so hard, we just need to rest inbetween races. Often, I’ll arrive in a country and just seethe airport, velodrome and hotel room, so living out of asuitcase the whole time isn’t that much fun. It’s a bitdifferent with the road cycling, as, obviously, you get to seethe course that you’re racing on, and that can be amazing.

Last year, I think I caught around 60 flights – but I live inBelgium during the road racing season. Not only is cyclingthe national sport there, and the level of competition sohigh, but the country is central in Europe, so it means Idon’t need to fly to every race destination.

Report> Helen CampbellIllustration> Jason Ford


➔ industrynetworks

Petroleum ExplorationSociety of Great Britain

The Petroleum Exploration Society of Great Britain is asold as the North Sea oil industry itself. It was founded in1964 to promote education in the ‘scientific and technicalaspects of petroleum exploration’. Now, thanks to a newbranch, the sector’s recent entrants are benefiting from thePESGB’s networking and learning opportunities that havebeen so valuable over the years.

NEW TALENT INEXPERIENCEDHANDS


North Sea fields arenot the onlyelements of theUK oil and gasindustry receivingan injection ofnew life. Asenhanced oil

recovery techniques squeeze additionalenergy out of more mature, complex fields,the industry’s human resourcedemographic is also seeing its ownreinvention.

The ‘Great Crew Change’ – the loomingretirement of many of the sector’sexperienced personnel – means that thedevelopment of the industry’s geoscientific talent has never been morepressing. Societies such as the PetroleumExploration Society of Great Britain(PESGB), created as the North Sea industrywas starting up, play a vital role,particularly in providing a bridge betweenthe industry’s old hands and the new talentcoming in.

“In the 1980s and early 1990s, the UKindustry had something of a boom on theback of the North Sea,” says Neville Jones,BP’s director of geology. “BP’s North Seabusiness recruited large numbers who wereable to develop together over the years.Then, there was a protracted period ofcontraction, and the industry as a wholelost a lot of people.

“We also changed our recruitment andour sponsoring of universities around thistime. The industry sponsored a lot of Ph.Dstudents in the UK system, but this mainlystopped in the mid-1990s, across the sector,owing to the economic climate.”

In addition, changing investmentstrategies by the majors mean ‘UK Oil plc’is also now characterised by a greaternumber of smaller companies, makingeffective networking even more important.While the UK has a lot of fantastic youngscientific talent, the ‘new breed’ does nothave the same organic networks, and thatvaluable bridge to the old guard, that theyneed to pick up the ropes and continue todrive the future of the North Sea.

Spotting this gap, James Thompson, aformer BP geoscientist, approached thePESGB and his then-employer with a viewto establishing a new branch. The resultingPESGB Young Professionals committee, or

‘YPs’, co-chaired by Thompson, has held anumber of events since its inception inJanuary 2010, the highest-profile being atthe British House of Commons.

“We found that the PESGB had greatestablished events, but it didn’t really caterfor all the newer industry entrants,” saysThompson. “I started thinking about ayoung professionals sector, as a way ofrecognising the young development in thesociety and the industry, so we made apresentation to the council. They’d seennothing like this before and they said they’dbeen waiting for us for five or 10 years.”

Thompson, together with Jessica Hill, anemployee of North Sea gas producerCentrica, pitched the idea to BP, which putup seed-funding of $11,700 annually, as didCentrica. The high-profile speakers at theMarch 2011 House of Commons eventincluded Charles Hendry, minister of statefor the department of energy and climate

“I started thinking about a young professionals sector, asa way of recognising the young development in thesociety and the industry, so we made a presentation tothe council. They’d seen nothing like this before and theysaid they’d been waiting for us for five or 10 years.”James Thompson


Petroleum ExplorationSociety of Great Britain

change; Malcolm Webb, chief executive ofOil and Gas UK, and Mike Weir, ScottishNational Party member of parliament.

“We went up cold to some of the speakersat a law firm event about the oil industry’sfuture, and said we’d like to do this for ayounger audience,” says Thompson. “Theywere all very interested, and agreed toparticipate. It was a challenge logistically,but the event was very well-received, and itwas great to see that the politicians stayedaround afterwards to network.”

As well as a growing number of talksand lectures in London, Aberdeen andEdinburgh, the YPs are also offeringfinancial support to university students’geological mapping expeditions. These arebecoming increasingly hard for students tofund and yet are a vital part of their studies.

The YPs’ success is already evident inPESGB membership. In 2008, just 202members, 4% of the total, were aged under30. By 2010, that figure had grown to 7% ,and current figures show members agedunder 30 now represent 10% of thesociety’s membership.

Andy Leonard, vice president at the BPInstitute at the University of Cambridgeand former director of the PESGB’sAberdeen branch, says this kind of networkhas huge benefits for the industry at large.

“The North Sea has a lot of life in it yet,”he says. “There are some great geologistscoming out of UK universities today, and

this gives you confidence they can do whatwe did 30 years ago.

“We feel we have a responsibility for thewider health of the science, for the widerhealth of the discipline in the UK, and it isin our interests that the skills base is at ahigh level. The success of this kind oforganisation feeds back into maintenanceof the quality of the people we recruit,creates a real community, and fostersknowledge sharing and learning aboutwhat others in the industry are doing.”

The PESGB’s president elect, MikeBowman, who retired in March 2011 after30 years at BP, his last role being chiefgeoscientist, says the links societies such asthe PESGB provide are invaluable. As wellas his new role’s traditional functions,supporting the YPs is a clear focus for hisforthcoming term in office.

“The YP side has been incrediblysuccessful,” he says. “Almost 50% whoattended the society’s AGM in June werewhat you would call YPs, a very different

scale from what we had before. Theirsuccess is such that, in 2012, we will behaving a formal YP position on the council,which is very important and reflects justhow significant we feel the YPs are.

“I will also be focusing on our MScfunding allocation. We fund, or partially-fund, the masters programmes of 10-15students a year, which is of increasingimportance in the current climate ofgovernment cuts. We will also becontinuing to look to more effectively linkall the industry’s small companies and helpthem use their collective power.

“We will also be further strengtheningour schools programme, where we reachout to schools, deliver talks and materials,and work to enhance public awareness ofthe industry.”

While the future of the oil sector is inthe hands of those who may have fairlyrecently joined the industry, the PESGBwon’t be taking its eye off the ball with itstraditional membership, Bowman assures.

“PESGB meetings are meetings of oldfriends,” he says. “There is a whole suite ofpeople who worked together, and thatsense of social camaraderie and knowledgeexchange really distinguishes PESGB fromall of the other groups that exist, and wemust maintain that.”

BP, meanwhile, is set to continuefunding the YPs for the foreseeable future.“The key reason we support this is that, asan industry, we need to send a very clearmessage to young talent that this industryhas a future,” says Neville Jones.“Organisations such as this promoteeffective networking, a skill that is notstraightforward, and working remotelywith colleagues in the industry is going tobecome increasingly important. This is asmall amount of money for BP, but this is ahighly-effective use of that money.” ■

“The North Sea has a lot of life in it yet. Thereare some great geologists coming out of UKuniversities today, and this gives you confidencethey can do what we did 30 years ago.” Andy Leonard

For more information, visit: www.pesgb.org.uk

Photography BP Archive

HIGH SPIRITS

ARCHIVE

Air BP has been around almost as long as its parentcompany. Its roots date back to the late 1920s, whenits product was known as Anglo-Persian aviationspirit. Since then, Air BP has been at the forefront ofall the major developments in air travel, providingfuel to adventurers and major airlines, alike. We openup the archive to share some of its key moments inhistory (for more on Air BP today, see page 32).



Opposite: One of the first flights fuelled byAnglo-Persian aviation spirit a precursor to AirBP was made by ‘Messrs. Stack and Leete (deHavilland Tiger Moth flight), from UK to India,pictured here. Above and left: Air BP fuelsOperation Deep Freeze – the codename for aseries of missions to Antarctica, co-ordinated bythe US military in 1956.


ARCHIVE

Above: in 1960, Air BP provided fuel forspecial aircraft in Australia, used for rainmaking experiments. Also known as ‘cloudseeding’, these experiments were a form ofintentional weather modification that usedchemicals such as silver iodine to try andchange the amount of precipitation that fallsfrom clouds. Right: fuelling a Qantas Boeing707B, which flew the British team to Perth inorder to take part in the British Empire andCommonwealth Games in 1962. Below:construction of the Concorde 0022, Bristol,UK. Throughout the 1950s and 1960s, BPsupplied both lubricants and fuel for thedevelopment of the iconic aircraft.


Far left: BP chairman and chiefexecutive Sir Eric Drake is photographedwith the 1970 Queen’s Award to theindustry. BP was presented with theaward for two technical achievements,one of which was its supersoniclubricant, BP Enerjet. Left and above:the front cover of Air BP’s house journal,which won a major British award inindustrial journalism in 1956 for bestdesign. Below: the NASA Boeing 747carries the prototype space shuttleEnterprise in 1983. Air BP provided fuelfor the aircraft at both Stansted Airport,UK, and Cologne Bonn Airport, Germany.


Traditional trade

Photography> Ian McGregor

Parting shot

Iraq-based BP employee Ian McGregortook these photographs of a traditionalreed house, known as a mudhif. Theconstruction is located at BP’s compoundat the giant Rumaila field, and took ninemen and six days to build by hand,without levels or tape measures. This5,000-year-old trade is practiced by theMadan people, who traditionally live inthe marshes of southern Iraq. BP’s mudhifhas become something of a talking point,with the Iraqi oil minister paying it a visit.It will be used as an area to holdmeetings and gatherings among staff.

BP Magazine was printed using vegetable based printing inks and lowalcohol damping on press. The FSC® certified paper was

manufactured using 50% de-inked post consumer waste fibre and50% virgin fibre pulp sourced from well managed forests at a mill

accredited for EMAS, ISO14001. Laminated using Biodegradable film

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 April 2012.

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