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Horizon, Issue Seven 2008 Editor's Letter

IT'S ALL IN THE DELIVERY At the end of a year it always seems appropriate to reflect on what we have achieved. It can be an opportunity to celebrate the highs and consider the lows. I'm pleased to say that in this final edition of 2008, there are plenty of positives to enjoy. On page 30, we bring you the results of this year's Helios Awards and Safety Awards, each winner a shining example of what programme manager Steve Shaw describes as "everything that is good about BP." Behind these stories are teams who have worked hard over the past year and more to help move BP forward, drive simplification and deliver results, the latest of which we assess on page 12 with a Q3 special. We look at press and analyst reaction, and find out why group chief executive Tony Hayward believes "BP is back." Like the Helios and Safety Awards, people lie behind this continued success; people who are all working hard to create a simpler, more focused company and close the performance gap, teams with a sense of pride and belief in what they do. Elsewhere in the magazine, we meet the team who spent five months consistently breaking records to deliver BP's largest ever onshore seismic survey (page 40); we pay homage to the BP volunteers who put their personal losses to one side to help their neighbours in the aftermath of Hurricane Ike (page26); and we hear from the Whiting team who, in rallying together to solve complex operational problems, has now positioned the 100+-year-old refinery for a remarkable future (page 48). As Hayward says on page 15, it has been "a great year for BP." As always, I hope you enjoy this edition of Horizon. See you next year. Lisa Davison, acting editor

Horizon, Issue Seven 2008

In the Papers

President elect Democrat Barack Obama, 47, swept to victory in the US elections after an extraordinary two-year campaign, defeating Republican John McCain to make history as the first black US president. Mr Obama will be sworn in as the 44th president on 20 January 2009. Financial Times Democratic Senator Barack Obama has been elected the first black president of the United States, prompting celebrations across the country. The BBC's Justin Webb says the result will have a profound impact on the US. He says the American people have made two fundamental statements about themselves: that they are profoundly unhappy with the status quo, and that they are slamming the door on the country's racial past. BBC News Obama greening Political observers agree that biofuels saw a huge win with the election of Barack Obama as the US president. Beyond the proposal to require billions of biofuels by 2030, Obama has also indicated he supports tax incentives and government contracts for developing cellulosic ethanol and other second generation biofuels, and would mandate all vehicles sold in the US to have flexible fuel capability by the end of his first four-year term in office. Obama has indicated an energy plan would be unveiled after economic stimulus and the middle class tax cut issues are addressed. Oil Price Information Obama may block oil and natural gas drilling in new offshore areas. In August, Obama said he would compromise on offshore drilling if it was necessary to win approval for alternative energy investments and more fuel-efficient cars. Further, the American Petroleum Institute, Washington DC, notes that [his] plan to impose a windfall profits tax on oil companies would harm one of the few industries that are thriving. Bloomberg Biofuels are under siege from critics who say they crowd out food production. Now, these fuels made from grass and grain, long touted as green, are being criticized as bad for the planet. At issue is whether oil alternatives actually make global warming worse through their indirect impact on land use globally. US Environmental Protection Agency has indicated it plans to measure biofuel emissions. Wall Street Journal Renewable energy projects often have high capital costs, and the credit crunch has shut down many sources of financing. The plunging price of oil has also changed the economics of clean energy. US ethanol market was the first to suffer, with many companies finding their debt- and subsidy-fuelled bonanza wrecked in the past few months. Other markets, including wind and solar energy, are also now feeling the chill. Financial Times Carbon loss BP has pulled out of the UK government's competition to build a prototype power station that will capture and store its carbon dioxide emissions, in a setback to plans to develop technologies for cutting the output of greenhouse gases while continuing to use fossil fuels. Britain's biggest energy company will instead focus its carbon capture programme on its joint venture with Rio Tinto. Financial Times UK's hopes of becoming a world leader in the battle against global warming suffered a potential setback when BP said it had pulled out of a competition to design the country's first carbon capture and storage project (CCS). The announcement came as BP said it would be concentrating its wind investments in the US. A BP spokesman said the company had failed to find a power generator that it could partner with. The UK government commented that BP's move wouldn't affect the competition.

Horizon, Issue Seven 2008

Wall Street Journal Baku pipes Crude oil shipments through BP's Baku-Tbilisi-Ceyhan (BTC) pipeline in December will return close to levels last seen before output was slashed in September. In the first six months of the year, prior to any output disruptions, the pipeline was scheduled to pump an average of 755,625 barrels per day (b/d), according to loading schedules. BP, the operator of the link, said in June exports were about 850,000 b/d. Supplies through the BTC pipe were cut by a fire in August and reduced to as low as 300,000 b/d after a gas leak in September. BP has since been increasing output. Bloomberg According to the Azerbaijan government's forecast, the BP-led Azeri-Chirag-Guneshli (ACG) offshore platforms are predicted to produce 13.9 billion cubic metres of associated gas in 2009. Volumes of ACG associated gas will surge by 15.8 and 15.7 billion cubic metres, respectively in 2010 and 2011. ACG associated gas is transferred to Azerbaijan free of charge subject to contractual terms and conditions. Azeri-Press A crude oil pipeline across Georgia that has been closed since the Russian incursion in August was reopened in November, operator BP said. The 100,000 b/d pipeline from Baku in Azerbaijan to the Georgian Black Sea port of Supsa was operating at around 90,000-95,000 b/d when it was shut down as a precautionary measure after hostilities broke out. Although the BP-operated BTC line is currently running well below its 1 million b/d capacity and can easily handle all of the region's crude output, the restart of Baku-Supsa gives the upstream partners options. Oil Daily Super seismic BP and Shell are both eyeing Libyan gas developments, with Shell saying it is `going deep' to look for gas that could supply Europe. BP is also gearing up for exploration lift-off in Libya, again focusing on gas. Offshore 3D seismic work started in September, while onshore 3D seismic should start before year's end. BP also expects to capitalize on its experience, developing tight gas in Algeria's neighbouring Illizi Basin. Oil Daily BP began a $650 million appraisal programme to develop the tight reservoirs on the Khazzan and Makarem gas fields on Oman's Block 61 in October, a senior official said. BP was awarded a production-sharing agreement for the area in January 2007. The Omani Ministry of Oil and Gas reports early production on the Khazzan and Makarem gas fields is expected to start around 2010, towards the end of appraisal, with full development to follow. Gas produced from the fields will be marketed by the Omani government. Platts US federal scientists have concluded that Alaska's North Slope holds one of the nation's largest deposits of recoverable natural gas in the form of gas hydrates. Recently, the US Geological Survey released a study estimating that 85.4 trillion cubic feet of natural gas can be extracted from Alaska's gas hydrates, an amount that could heat more than 100 million average homes for more than a decade. Washington Post Libya's authorities are looking to liquefied natural gas (LNG) for an increase in export capacity. Shell, Eni and BP are eyeing LNG. BP returned to the country in May last year. The companies having signed up to large long-term exploration agreements have been launching new province exploration campaigns, running through aerial surveys and multi-crew 2D and 3D seismic surveys. Petroleum Economist Gulf recovery Gulf of Mexico (GoM) oil and natural gas production may almost be fully restored by end-March if estimates about how long it will take to repair platforms damaged by hurricanes were correct, the Minerals Management Service (MMS) reported in November. The agency said that damage assessments undertaken after Ike passed through the GoM found 35 platforms suffered extensive damage and 60 platforms were moderately damaged. In October, MMS reported an estimated 27.7% of normal oil production in the GoM and 33% of normal gas production was shut. Normal oil is about 1.3 million b/d, while gas production is 7.4

Horizon, Issue Seven 2008

bcf/d. Platts GoM offshore oil and gas production has been slow to return in the wake of hurricanes Gustav and Ike. But some industry observers are beginning to wonder if the delay is being caused purely by physical damage, or if financial concerns over the impact of a slowing global economy or energy consumption are causing producers to drag their feet. Natural Gas Week Almost two months after Hurricane Ike slammed into the Texas coast, nearly a quarter of oil and gas production in the GoM remains offline, according to federal data. That is an improvement from the 33% that was offline in late October, but progress has slowed from the first weeks after the storm. Some observers have linked the slow pace of recovery to slumping demand for oil and gas, but oil companies say falling prices give them an incentive to work faster to recover. Repairs have been more extensive and more difficult than expected. Wall Street Journal King oil Major investments are urgently needed to ensure secure energy supplies and to curtail rising emissions of greenhouse gases, the International Energy Agency (IEA) said on 12 November in launching its World Energy Outlook 2008 publication. Fossil fuels will still account for 80% of the world's primary energy mix in the year 2030. Some 64 million b/d of additional oil production capacity is needed. Daily Oil Bulletin New sources of oil equal to the output of four Saudi Arabias will have to be found to maintain present levels of supply by 2030, according to the IEA. Depletion of existing oilfields signalled vast new investments would be required to satisfy the oil demand. Global oil production stands at about 85 million b/d; Saudi Arabia produces 9 million b/d. IEA reports that there was enough oil in the ground to meet increased demand but that it would be a huge challenge because of the scale of the investment required to develop new fields in remote and inhospitable places. The Times More than $1 trillion in annual investments to find new fossil fuels will be needed for the next 20 years to avoid an energy crisis that could choke the global economy, the IEA said. The warning comes at a time when major oil companies are pulling back investments amid the ongoing severe economic downturn. IEA stressed that it's essential for the world's energy companies to continue investing in new projects despite tumbling crude prices. AP The IEA suggests current oil prices are too low to guarantee investment. The main reasons for this year's focus on investment is the IEA's recent exhaustive study on the rates of decline in production from 800 of the world's biggest fields. Financial Times Unit start up The final unit to be overhauled as part of BP's $1 billion refurbishment of its Texas City refinery has been restarted. The No 3 ultraformer has been shut down for more than three years and is the last of 29 major units in the refinery to undergo reconditioning prompted by a series of blasts that killed 15 people in March 2005. The restart also means the 1,200-acre refinery is almost back to full capacity for the first time since being shut down for the overhaul after Hurricane Rita struck in September 2005. Galveston County Daily News

Horizon, Issue Seven 2008 Upfront

BP DELIVERS THE GOODS

BP America has been awarded the prestigious outstanding supplier performance award by FedEx, from more than 10,000 suppliers. Formed in 2006, BP's alliance with FedEx is focused on security of supply, process excellence and competitive pricing. Today, BP supplies a large part of the fuel requirements for Freight and National LTL--the two largest fuel consumers in the FedEx corporation. BP's performance has continually improved since the alliance's inception to a point where the customer recognizes BP as best in class. To win the award, suppliers were reviewed across a variety of spend categories with their performance scored on a monthly basis by FedEx. The BP team, comprising strategic accounts, fuels value chains, global fuels technology, transport operations and elite, consistently exceeded expectations in all disciplines. "We rely heavily on the dedication of our suppliers," says Dennis Beal, vice president physical assets at FedEx Freight. "[BP's] support is critical to our success and we appreciate its commitment to delivering prompt service, innovative ideas and superior products." Richard Bartlett of strategic accounts says: "This is a great testament to the hard work and ingenuity of BP and is something we should be very proud of. It's a great example of a team working safely, quietly and diligently to make sure we consistently out-perform the targets set." CENTENARY CELEBRATION: Share your stories Do you have a BP story to tell? Next year, the company celebrates its centenary and from April, Horizon will be helping to mark this auspicious occasion with a series of special anniversary sections. While we will bring you stories from right across the company's 100 years, we'd like to hear your personal memories, too. Perhaps you were working at the forefront of some of BP's biggest achievements, or experienced a momentous occasion in which BP played a key part--whether it was a long time ago, or just this year. Maybe your husband or wife worked for the company and you have their stories to tell. We'd like to hear from you. We shall be printing some of the best accounts. Please send your memories to [email protected] MARR REVEALS ARTISTIC TALENT Andrew Marr is best known in the UK as a political columnist, writer and broadcaster, but for one night in October he revealed his artistic side by giving this year's BP British Art Lecture. The subject of the discussion, held at Tate Britain, was what makes British art. A self-confessed non-specialist observer of art, who has received "a vast amount of inner glitter from looking at paintings," Marr cited the commercialization of art as the defining aspect of the British art scene. Unlike artists in Roman Catholic countries who relied on commissions from the Church, the Protestant British found they could sell tickets to the public in order to view their work. Hence, the rise of the public gallery, which, in turn, influenced the way artists created their work. The likes of Constable and Turner painted vast landscapes with rough surfaces designed specifically to be viewed quickly by a large transient audience. Moving on to modern-day artists, Marr highlighted Damien Hirst, whose work often generates strong views. Such debate, he insisted, is a key component of British art. Asked if he thought politics impacted on art, Marr replied that he didn't think so, before adding, "Maybe that's why I like it, it gets me out of my day job."

Horizon, Issue Seven 2008

NEW AGREEMENT BRINGS PAKISTAN GROWTH BP Pakistan recently signed a sale purchase agreement with Orient Petroleum International Inc (OPII), which has given BP 51.3% working interest and licence to operate Mirpurkhas and Khipro (MKK) blocks, located in the southern Sindh province of Pakistan. The deal is subject to certain regulatory approvals, which are under process and expected to be completed by the end of the year. This acreage will significantly enhance BP's production profile. Currently, the company's gross production in Pakistan is about 46 million barrels of oil equivalent per day (mboepd) and net production is 37 mboepd, which will increase to about 59 mboepd (gross), with the addition of MKK blocks. MKK concessions are similar to BP's nearby assets in Badin. Aside from being a strategic fit, the expansion of BP business in the region will also bring several other advantages to the company in terms of application of technology and economies of scale. As BP will be assuming operations, OPII employees will be solicited by BP as full-time staff. With an integration plan in place, BP Pakistan is well positioned to integrate these assets into the BP portfolio. Other shareholders with BP in MKK blocks are: Government Holdings (Private) Limited, Bow Energy Resources (Pakistan) SRL and Zaver Petroleum Corporation Limited (ZPCL). This agreement with OPII marks yet another success for the company following the acquisition last year of Occidental's interest in the BP-operated onshore Badin concessions and a farm-in agreement with Petroleum Exploration (Private) Limited (PEL) for three offshore blocks in Pakistan's Indus Delta. PICTURE PERFECT If you're a budding Annie Liebowitz, then there's still time to enter this year's Horizon photo competition. We have extended the deadline to 30 January 2009. Photographs should have been taken after 30 August 2007 and up to the deadline. There are three categories from which to choose--safety, people and performance--and participants can enter up to three images for each one. The more creative you can get with the category the better! All photos should be accompanied by full contact details, including an email address and telephone number. Send your entries to [email protected] at up to 10megabytes per email. The competition is open to all BP employees, contractors, retired employees, as well as spouses and children under the age of 18. The prize is $1,000 for the overall winner and $250 for the remaining two category winners. VICTORIOUS LEANNE BREWS UP A WINNER The fourth annual Australian Wild Bean Café barista competition ended in spectacular fashion, with a gala dinner and winner's presentation on 27 August. This year's competition began in April, with participation from all 106 Australian Wild Bean Cafés. With more than 500 entries, the 2008 contest succeeded in upskilling, engaging and rewarding BP's Wild Bean Café baristas, whilst boosting their pride and passion for coffee-making. Training and judging throughout the event was undertaken by BP's coffee roaster and supplier, Mocopan, with the top 26 entrants moving on to the state finals in July. In August, BP's 13 best baristas were flown to Sydney for two days to battle it out for the national barista competition championship. After a clean sweep by New South Wales in 2007, the remaining markets were keen to claim victory in 2008. Congratulations to Leanne Houghton from BP Connect The Tulla (Victoria) for taking the 2008 title. Houghton won the trip of a lifetime to Las Vegas, $1,000 spending money and a Rancilio coffee machine. The proud champion delivered the Barista trophy to the Victorian market for the first time in the competition's four-year history. Yani Van-Der-Wegen from BP Connect Kallangur (Queensland) came a close second. Congratulations also to Stacey Moneke from BP Connect Carlingford (New South Wales), who won the `signature creation' component for her `unbelievably good' and commercially viable wild strawberry iced coffee.

Horizon, Issue Seven 2008

PAST TIMES DECEMBER 1953 Brave volunteer Firefighters show off their skills When it comes to doing their bit, BP staff have never been backwards in coming forward, especially when it means putting the welfare of others before their own. Some show selfless acts of kindness when faced with a criss situation, most recently in the aftermath of Hurricane Ike, when many BP America employees left their own damaged homes to help the relief effort (see page 26). Others have even gone so far as to put themselves directly in the path of danger. This was the case in the 1950s when the Sunbury Fire Brigade was manned entirely by volunteers. In the December 1953 edition of NAFT, the Anglo-Persian Oil Company (the forerunner to BP) magazine, the brigade members were featured taking time out from their duties to compete in two important competitions. In the first, held at the Arthur Guinness factory in Park Royal, UK, the men put on an impressive display of professionalism, winning them the Glaxo Cup in the association's London branch competition for the best time in a wet drill, involving the running out of 30 feet of hose and hitting the target. The cup was presented to E Dolley, Sunbury's deputy fire master, by the chairman of the Middlesex Fire Brigades Committee. The brigade, including an Anglo-Iranian Oil Company team, then went on to compete against other forces from England and Wales in the national finals of the Industrial Fire Protection Association held in Lambeth . CHANGES AFOOT FOR BP CANADA BP Canada is the latest division of the company to become a strategic business unit. The decision to change from a performance unit comes after a highly successful year, during which the addition of oil sands and Arctic exploration had a major impact on BP's global business. Anne Drinkwater is heading up the SPU, as president and chief executive officer, while Randy McLeod has become chief operations officer. The shift in leadership is "the right thing for Canada right now," says McLeod, who will remain the external face of the organization in British Columbia, Alberta, Saskatchewan and Ontario. BITUMEN TEAM PUTS ON A SHOW IN DENMARK Bitumen is a vital component of modern society and, although it has been in production since the early days of the oil industry, it remains a developing product that benefits from modern technological advances. BP Bitumen is at the forefront, working with customers to develop and improve the performance of its products, for instance, in reducing road noise. The company has also led the way in making improvements to the low temperature performance of its products, making them easier to use. Lowering the temperature also has the benefit of reducing carbon dioxide emissions, thanks to energy reduction in its production and processing. Those benefits were recently showcased at the BP Bitumen stand at the Eurasphalt & Eurobitume Congress in Copenhagen, Denmark. The event brought together more than 1,000 people from across the industry for the three-day event. "It was always crowded and the atmosphere was very good," says Sandro Kenda, bitumen & coke manager, fuels value chain (FVC) Rhine. BP's staff knowledge was credited with much of the success, allowing for meaningful discussions with customers, and the stand featured a series of case studies from projects around the world. BP Bitumen produces and markets bitumen in several countries and uses its fuels value chains model to ensure the company performs well.

Horizon, Issue Seven 2008

"We recognize that we have to be well-connected and responsive to all aspects of the chain that works from crude to customer," says Carl Robertus, technology manager, BP Bitumen. "We have led this way of working. If we work together, then we will all win more." SHIPPING/IT&S PARTNERSHIP HAS A LOT TO `BOAST' ABOUT BP Shipping and information technology and services (IT&S) employees came together in October to celebrate the success of the Motes and boast programme. The wireless condition-monitoring system--or mote network--can be used to monitor engine room equipment and has been one of the many factors that contributed to the Loch Rannoch shuttle tanker recently completing 10 years' service without a single day away from work case (see page 20). The programme was also a winner at the Helios Awards in 2005. To mark the achievement, representatives from BP Shipping, IT&S and partners Honeywell and SKF gathered for a celebratory dinner and presentation at The Petersham Hotel in Richmond, UK. Dana Deasy, group vice president of IT&S, hosted the event and thanked all the partners for making the project an "outstanding success". He said: "Only due to the successful partnership of three major corporations in overcoming significant technical challenges in a very difficult environment have we achieved success."

Horizon, Issue Seven 2008 Profile

The Horizon interview REPORT BY Lisa Davison THE RIGHT CHEMISTRY The recent appointment of Imperial College professor Vernon Gibson as BP's chief chemist underlines the increasing importance of chemistry in the oil industry. He talks to Horizon about growing the company's science base. LINING THE walls of Vernon Gibson's office at Imperial College, London, are row upon row of academic journals, each bearing the old BP shield logo. Rescued by Professor Gibson during a BP clearout several years ago, these invaluable tomes are about to come home, with the announcement that he is BP's newly appointed chief chemist. "I shall have to bring them back to where they belong," he jokes. Trained in organometallic chemistry--the interface between organic and metal-based chemistry--Gibson's BP connections stretch back 20 years. Between 1990 and 1993, he was the BP Chemicals young university lecturer. At Imperial College, he was the Sir Edward Frankland BP professor of inorganic chemistry, responsible for the catalysis and materials research section. For the past three years, he has sat on the company's Technology Advisory Council. His new appointment reflects the increasing importance of chemistry in BP's future. As well as helping to grow the company's science base--by providing visible leadership to the BP community of chemists and developing chemical disciplines--his role will see him establish and maintain connectivity to world-class chemicals research outside BP, through its major academic and industrial partners. "My role is about growing the science base, increasing the visibility of chemistry within the company, and recognizing its importance for the future of the company," he says. "There is a lot of talent still left in the company, but you need critical mass, you need to give them the big challenges and the right environment to develop their strengths in core areas." Complex mixture: Nevertheless, recent history suggests BP may not be seen as a natural choice for chemists when planning a career path, much of which may be due to the divestment of its petrochemicals business in 2005. But, says Gibson, chemistry lies at the heart of what BP does. "Oil itself is a complex mixture of chemicals, which we then refine using chemical processes." That chemistry is becoming more complex as resources become tougher to extract. As a consequence, BP's chemical heart needs to grow stronger. "We need to start replacing the `easy' oil with some of the more difficult, less conventional sources of energy--and that needs chemistry," he says. In Exploration & Production (E&P), the development of enhanced oil recovery techniques relies on chemical reactions. `Designer' waters--such as BrightWater--can sweep more oil out of existing reservoirs, but their creation has only come about by understanding how to use polymers to block certain reservoir channels and expose others. Equally, controlling the amount of sand that comes up with oil requires chemical techniques to `solidify' that sand. And then there is conversion technology, which uses chemistry to convert any form of carbon into valuable molecules. This, says Gibson, is a big challenge. To transform the various carbon sources into useable products requires catalysis. BP has spent the past 25 years investigating different catalysts and process conditions--an example is the Fischer-Tropsch process for turning synthesis gas into liquid hydrocarbons. But, as Gibson explains, the challenge is understanding how such catalysts work in the first place. "It is like a black box. You pass a feedstock over a metal to produce the catalysis, but the details of how you construct the new molecules are not very well understood because we have not been able to illuminate that black box. So, you have some general rules and you know what worked last time you tried it, but you cannot

Horizon, Issue Seven 2008

necessarily claim to understand why it is doing it." As with all great scientific endeavours, though, that is changing, thanks to spectroscopic techniques that are beginning to probe what goes on at the metal's surface in more detail. "Thus, we are starting to illuminate the black box. Once you understand how something works, you can design better versions and then you are really on the road to designing vastly superior catalysts." Gibson's long history of working across academia and industry makes him an invaluable asset to BP. "I have worked at the interface for many years and I can spot world-class scientific developments in both sectors. I also know how to steer those towards commercialization." As BP's chief chemist, part of his job will be to have a strong overview of the company's activities and how they fit in with the relevant university programmes. "My task will be to ensure we have alignment and the right connectivity between activities on both sides." While academia takes a longer wavelength approach than business, there has long been healthy interaction between the two. By creating a collaborative approach, an energy company is able to take a university's discoveries and develop them commercially. And with today's big energy security and climate challenges, that collaboration is becoming more important. "That is why it is interesting to sit at the interface between the two sides, channelling the flow of information and deciding how to manage it in the most productive way." Spend any amount of time with Gibson and his continued passion for chemistry is clear. "It never leaves you," he says, "because it is the fundamental basis of what makes up the material world around us. There is a tremendous power within chemistry to come up with solutions. After all, it's about manipulating molecules, capturing the power of molecular transformations. The excitement of scientific breakthrough, and actually changing a paradigm, is what drives most scientists." It's an excitement BP hopes to capture as it reinforces its position as a company that values scientific discovery and technology.

Horizon, Issue Seven 2008 Quarterly Results

TREND EMERGES WITH Q3 RESULTS The latest results are in and the signs are promising. Speaking to PiP, and at a series of townhalls, Tony Hayward explains why BP is back. Photography by Richard Davies "B P is back." That was the resounding message from group chief executive, Tony Hayward, following a stunning set of Q3 results, which were 30% ahead of market expectations. During a series of townhalls, Hayward explained that some of this can be attributed to the high oil price, but that exceeding expectations was "entirely down to underlying performance. For that, everyone should feel good." The confident tone was also present during his Performance in Perspective (PiP) interview, telling presenter Juliet Morris: "I think we should be pleased with what we have achieved--they're a very good set of results." The numbers are particularly good given the current turmoil in the global financial markets and, while BP's share price has been impacted, Hayward told PiP: "If you actually stand back and look at how BP fared against--let's say for example the FTSE, then [by 31 October] we are actually up 35% relative to the FTSE since the beginning of 2007." Much of this rise has occurred in the past four months, presenting more evidence that focusing on underlying performance is working. "We are all doing what we planned," he told his Houston townhall. "We've restored revenue, made progress in simplifying the company and are empowering leadership to cut through red tape and make decisions." Safety remained a priority throughout 2008, and he told his Sunbury townhall that he was writing more and more letters congratulating teams on their record. "I think the best I've written was to the refining team. They had no high potential incidents this quarter. That is an extraordinary achievement." The focus on safety will continue into 2009, with more than two thirds of operational sites running the Operating Management System. "The intention is that every BP site will look and feel the same." While the principles of the forward agenda are starting to take effect, Hayward is aware there is more to do. Not least thanks to robust questioning at Sunbury, where instances of a continued lack of simplification were highlighted. "There is no silver bullet," Hayward replied. "But we all need to keep asking what we need to manage our businesses in the day-to-day and for the long term." In Houston, he cited the Chesapeake shale gas deal--which took two weeks to move from consideration to signature--as an example, and in Sunbury he said: "I've done my bit. I've reduced the amount of management information coming across my desk by 80%, and find that I can still do my job." It's been a good a year for BP. Indeed, the best in a decade for exploration, with major discoveries in the Gulf of Mexico, Angola and Egypt, and new access in the Canadian Arctic. "You have to go back to 1999 to find more major discoveries in one year." In Refining & Marketing, increased availability helped deliver a better quarter--on an underlying basis--with both AirBP and Lubricants outperforming expectations by some margin. In the US, Texas City refinery is back at near full capacity and the upgrade at Whiting refinery has been sanctioned. The petrochemicals business did not fare so well. "Chemicals has had a tough time. This is always our first indication of what is going on in the real economy," Hayward said. In Alternative Energy (AE), Hayward told audiences it will focus investments across a smaller number of technologies and geographies, to drive scale and returns. In wind, the focus will be in the US because of advantaged land resources, and in biofuels AE is developing positions in Brazil, the UK and US in the near term. "In solar," said Hayward, "we need to create an integrated value chain with a view to having manufacturing facilities at scale where they will be cheaper to run." AE will also develop businesses in carbon management.

Horizon, Issue Seven 2008

The next 12 months will see continued efforts to change behaviours, while reinvigorating efforts to ensure BP's workforce fully represents the societies in which it operates. He acknowledged that while focus on safety and performance had been outstanding, the people agenda had lagged. "The next 12 months will see us really focus on the people part of `safety, people, performance'. Some of that will be through changing behaviours and encouraging strong leadership. Some will be through a restatement of our corporate values." When asked whether BP needs a new set, he replied: "People tell me that our existing values are enduring, that they should evolve rather than be reinvented." Russia was also a key question. "We've done two fundamental things," he told PiP. "The first put in place a dispute resolution--three independent directors, who will get involved if the two of us can't agree. The second is to commit to proceed with an initial public offering." The challenge for the next 12 months will be weathering the economic storm. Oil demand is falling and prices are likely to be soft. But, Hayward is confident BP is up to the challenge. Next year will see more production than 2008, more refining availability and lower costs "because of everything we are doing on the forward agenda. We have to manage our finances prudently to continue to pay our shareholder dividend, while investing for the future," he said. "When the world does start to grow again, it will come back quick and tight." In the meantime, he concluded: "BP is having a great year. We need to make the fourth quarter just as good to confirm BP is back. I want to thank everyone for the part they have played." Q3 RESULTS AT A GLANCE Replacement cost profit (post-tax) $10 billion (+148% compared to Q3 2007) Underlying profit (post-tax) $8.9 billion (+98% compared to Q3 2007) Operating cash generated $14.9 billion (+134% compared to Q3 2007) E&P underlying replacement cost operating profit (pre-tax) $11.5 billion (+81% compared to Q3 2007) R&M underlying replacement cost operating profit (pre-tax) $1.3 billion (+65% compared to Q3 2007) Competitor performance To learn more about BP's third quarter results, see Performance in Perspective (PiP)--the quarterly results and strategy programme, featuring interviews with Tony Hayward and the executive team. To view PiP online, visit http://clients.world-television.com/BP_PiP/ to order a multi-language DVD, email [email protected] SHARE WATCH With gloomy headlines, a world in financial crisis, the impending recession, major banks and institutions going bust, and multi-billion dollar bail-outs for company and country alike, it is fair to say that October has been quite a month in the markets. Oil prices have followed this volatile rollercoaster ride, falling sharply over the past month. In fact, as chief financial officer Byron Grote stated during the recent Q3 results webcast: "Although the quarter ended only 28 days ago, it feels like distant history." Brent has fallen by around 60% since early July, continuing its decline from a peak of $145 per barrel to around $60 per barrel at the end of October. Oil stocks continue to feel pressure from falling oil prices despite OPEC announcing cuts of 1.5 million barrels per day. The deteriorating outlook for oil consumption in a deep recession outweighed the perceived impact of OPEC's intervention. The oil majors followed the sharp fall in the market in the first half of October with BP reaching a low of £3.70 in the UK and around $38 per American depository receipt (ADR). However, the majors began to dramatically outperform the broader markets around the middle of October, as investors focused on the high-dividend yields

Horizon, Issue Seven 2008

and strong balance sheets of the European majors, helped by a shift of yield oriented funds from the banking sector in the face of dividend cuts by the banks. A week of better than expected earnings announcements for the third quarter assisted further. At the time of writing, BP was trading at £5.28 in the UK and $51 per ADR. The shift to focus on dividend yield means that BP has now outperformed the UK stock market by 40% since the start of April, and is at its highest level relative to the UK market since 2005. It could be suggested, therefore, that BP shares are very good value at the moment, especially as the company also appears well positioned to weather any storm that comes in the near future. For more information on trading conditions, see: www.bp.com/tradingconditions and www.bp.com/investors Nothing in this article is intended to lead to you buying or selling shares or other investments and BP does not accept liability for any loss or damage of any kind arising out of such or any other use of this material. You should take independent financial advice before making any investment decision.

Horizon, Issue Seven 2008 Group

REPORT BY Helen Campbell THE PROGRAMME THAT IS PROVING ESSENTIAL Since launching in May, the Operating Essentials programme has started to encourage open dialogue to improve process safety around the world Do you sometimes wish you could dummy run an operational decision, in a safe, realistic way without any risk, then go back again to try something else? If you are one of BP's 4,500 operations front-line leaders (FLLs)--a manager or supervisor at a field, refinery or chemical plant--and the Operating Essentials (OE) programme has not yet reached you, it soon will. Part of BP's group-wide effort to improve and strengthen capability, OE is designed to equip BP's operational leaders with the skills essential to meeting consistent standards within the framework of the Operating Management System (OMS) being implemented around the world. OE began rolling out across the group last May, and offers valuable and effective training to help BP achieve safer, more reliable and efficient operations. One thousand people will have started OE by the end of 2008, with another 1,000 starting next year. Feedback from the 750 FLLs that had embarked on the programme by end-October has been very positive, with many already citing tangible operational benefits. OE is not just another universal training course. Not only is the programme usually implemented on a site-bysite basis, it starts with a needs analysis, an honest and thorough site-specific discussion: about everyday operational issues, challenges and achievements. Only then are the most appropriate of the programme's nine course modules, which cover a range of process and safety issues, selected. "What we have designed is a suite of education offers," says Mark Bly, group head of Safety & Operations. "This is not just a question of sending a trainer to a site. Instead, OE requires significant action from the site leadership, some thoughtful design about the site's needs, and then training that is effectively deployed to the site." This tailored approach ensures that the modules selected relate closely to a site's operational environment and that everyone gets the most out of the courses. "Rolling things out as a site-based programme means we can bring site teams together and add the practical dimension that makes OE far more than a training programme," says Urbain Bruyere, OE project director. "Because of its modular design and the fact that it takes up to 14 days, spread over two to three years, to complete, OE also gives individuals the space and time to learn, before taking that experience back to their own site to put it into practice." Chris Bennison, operations superintendent for offsites at Kwinana refinery, Australia, says the OE `safety culture' modules piloted there in 2007 played a significant part in reducing by two thirds what was, in August 2007, one of BP's highest recordable injury frequency rates. And at Alaska's Endicott field, Jason Caldwell, operations and maintenance team lead, says the communication facilitated by the programme, particularly the `powerful conversations' module, is invaluable. "`Powerful conversations' gave us all an opportunity to start working on our softer skills, such as how we relate to, and communicate with, each other," Caldwell says. "This programme has also served well as a venue for leadership to set out how they see the next year or two, and communicate that to us and to the workforce, so there was a two-fold benefit." Successfully educating in a challenging, high-risk operational environment is challenging in itself, but it goes without saying that operational safety and performance cannot be put at risk to provide a learning opportunity. What OE offers is a range of carefully researched and honed adult learning methods, to give participants as

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real a situation as possible and, crucially, the ability to return to an exercise to test a different response and learn from mistakes without hurting anyone. AZERBAIJAN ROLLOUT A shared opportunity to create change Bill Schrader, head of the Azerbaijan strategic performance unit (AzSPU), chose to launch OE by rolling it out in July at all 14 sites simultaneously. Around 77% of AzSPU's front-line leaders (FLLs) will have started OE by the end of 2008, with the rest beginning in 2009. Linking all 14 sites located in Azerbaijan, Georgia and Turkey, and some remotely situated, is not easy, but AzSPU's leadership has given it strong support. "I decided to get OE really embedded and roll it out to all sites to put the foundation down for OMS," says Schrader. The business started with the `powerful conversations' module, went through `effective performance conversations', and will select either `process safety' or `control of work' next. The programme's design facilitates honest, transparent discussion--something the leadership wants to encourage. "If anyone feels uncomfortable about a piece of work they are about to do, I want them to speak up and be open," Schrader says. "I want to hear concerns if someone feels they are being pushed too hard, for example, or the workload, or pace of work, is too much. I can do my job more effectively if people tell me what is bothering them, and OE is giving people that opportunity." And OE is already facilitating change. The Chirag platform recently applied to install a pipeline to take waste oil below deck, drastically reducing manual handling--a practice which, while not necessarily leading to accidents, is a relatively high-risk activity. But a drilling engineer saw a better, safer way and voiced it through OE's open channel, which could soon eradicate an unnecessary risk. For Ziyaddin Safarov, an offshore operating engineer on Chirag, OE has changed the way he relates to people. "Personally, I learned I needed to listen to all the critical things and not be reactive," he says. "I learned not to just give attention to production, of course that is important, but also to all other aspects, such as individuals and how they feel about safety. Before starting a job, we need to ask and find out what the workforce is thinking about the issue, and whether everyone feels comfortable." This openness is what OE is all about and Schrader believes it will make a real difference. "What startled me was that I did not know how much it was needed and wanted until we did it," he says. "I truly think the time taken to put OE together, in the preparation of quality material and the mode of delivery, will pay off. I am getting one big piece of feedback after another and, although it does mean some extra work, it has really filled a gap." HELPING MANAGERS TO BE MORE HANDS-ON When markets are volatile and uncertain, it is vital that a business has the right people in the right seats. The rollout of new HR technology and processes is enabling BP to do just that. Illustration by Jason Ford A key part of ensuring that BP delivers on its people agenda involves updating its human resources (HR) infrastructure, and improving HR processes and delivery of services. As part of BP's forward agenda, HR has made a commitment to improve that infrastructure, while reducing costs and cutting complexity. Over the past 18 months, changes to HR technology and processes have started to make a difference to HR teams and business managers in 21 countries, where basic activities had been hampered by existing technologies, and where accurate information on which to base management decisions was not readily available. Today, they have a proven new SAP HR system in place, allowing quick and efficient access to upto-date and accurate information. As a consequence, local HR teams and business managers are able to make important people-related decisions more quickly and consistently. "BP takes people management seriously," stresses Tony Marchak, vice president, global HR operations. "That's why we are investing in the systems, tools and processes that will enable us to do this better, while

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driving down our costs. We will not turn this around overnight, but we have achieved phenomenal progress in our journey to modernize the HR function, and deliver on our promise to equip and support each segment and function in building and developing the capability of their people and their teams, to meet their business priorities." In Azerbaijan and Angola, the HR teams have been using the new infrastructure for more than a year, helping HR and business leaders have better conversations about headcount planning and performance driven by higher quality people data. "Before we had the new HR system in Azerbaijan, managing people data was stressful for all involved. We seemed to spend all our time on reconciliation and debating the numbers, which limited real value for the business," explains Bill Schrader, Azerbaijan strategic performance unit leader. The new system has provided the HR team with a fresh toolkit for its people data management--good news for all team leaders in Azerbaijan who now own their people data and are in a position where they can be more hands-on in managing their teams. "The HR team has done an excellent job of partnering with the business, and they feel that they have benefited from building their skills in SAP," says Schrader. Angola has also been using the new system for almost a year, and is experiencing similar benefits. Up-to-date, quality information available from one single source is at the forefront of all people-related decisions, and is used as the basis for monthly reports for every team leader in Angola. In addition to having the new SAP-based technology in place locally, the HR teams in both countries are looking forward to the same technology being applied to their UK and US business sites in 2009. South Africa had long used the UK version of the PeopleSoft HR, and local payroll systems, to run HR--often with difficult results. These were replaced by a single integrated SAP HR and payroll system in September this year. Vuyi Raseroka, HR director, explains: "Up to now, access to HR and payroll data has been restricted. When we received queries from the business managers in the past, the HR managers had to request a report from the transactions team, who accessed the data on their behalf. This used to take up to two weeks. Today, the HR managers have access to employee data and can run their own reports instantly. It means that we can handle queries from the business far more quickly and efficiently." The new system allows for better, simplified regulatory reporting and compliance with data security. Instead of having to manage that data externally, the system allows HR to produce regulatory reports directly from the system in the correct format, when needed. The result is that time and money are saved and accuracy guaranteed. While 2008 has been a successful year, there is still plenty to be done in the next 12 months, with more activity in further countries throughout 2009. By the end of next year, a significant number of BP's employees will be covered by new and improved HR systems and processes. In the UK and the US, where BP employs approximately 35,000 people, the future model will include a new HR service and online tools. This will increase employees' access to, and control of, their personal information and the policies that govern things like benefits. For people managers, it means better visibility and direct access to information as well as the ability to complete specific activities for themselves without having to wait for availability from HR, saving them considerable time, reducing costs and raising efficiency. One of the key features of the new service, for people who have access to the intranet, is a single HR portal that will replace the numerous existing HR websites as a `one-stop shop' for HR information that is personalized to specific roles. People will also be able to make changes to their own information and submit, and monitor, HR queries directly. For people with limited or no online access, a service centre staffed with HR professionals will provide additional support and handle HR queries. Sally Bott, executive vice president, HR, points out that these types of online HR tools have been a source of competitive advantage for companies like Shell and ExxonMobil for years. "They keep improving, and this is one more way for us to close the gap on our competitors," she says.

Horizon, Issue Seven 2008

SAP ROLLOUT ACROSS BP IN 2008: Sub-Saharan Africa: South Africa, Botswana, Malawi, Mozambique, Namibia, Tanzania, Zambia and Zimbabwe Asia Pacific: Singapore and Malaysia Europe: Norway Middle East: Abu Dhabi, Kuwait, Oman, Sharjah and Dubai CELEBRATIONS FOR A DECADE OF SAFETY As two BP vessels celebrate 10 years' continuous service with unblemished safety records, Ian Valentine pays tribute to the people who made it happen You wait 10 years for a vessel to notch up a significant safety record, and then two turn up at once. So, it was a double celebration for BP Shipping when two of its flagship tankers recently racked up a full decade of continuous service without a single day away from work case (DAFWC). The Loch Rannoch, is a dedicated shuttle tanker that transports crude oil from the Schiehallion floating production, storage and offloading (FPSO) vessel in the northeast Atlantic, while the Northwest Shearwater is a BP-operated liquefied natural gas (LNG) tanker that operates out of Australia's Withnell Bay. Around 2.25 million manhours have been worked aboard the Loch Rannoch, and the vessel has visited Shetland's Sullom Voe terminal a staggering 510 times. To date, it has discharged a total of 283,512,881 barrels of Schiehallion crude. Meanwhile, on the other side of the planet, the Northwest Shearwater has worked 2.68 million manhours, covered 1.8 million km (1.1 million miles); the equivalent to 51.5 times around the world, carried 160 cargoes, made 320 port visits and loaded 20.27 million cubic metres of LNG in the same 10-year period. There have been the inevitable cuts and bruises along the way, but no injury has ever warranted a day off work. Adrian Lloyd is an ex-chief engineer and now technical superintendent for the Loch Rannoch. He believes that he has never seen a comparable safety culture in his 35 years involved in commercial shipping. Critical moments: "It can get pretty hairy out there, especially in marginal docking conditions with significant waves above four metres [13 feet]," he says, from the flat calm of his new office at Sunbury. "The critical moments come while feeding the 72 metre [236 feet] connecting line from the FPSO to the Loch Rannoch. The worst case scenario of what could happen if we lost power in those circumstances, or made an error, isn't worth contemplating." Lloyd feels tremendous pride to have been involved in such a successful operation. "As soon as you stepped on the ship, you could sense the camaraderie and professionalism," he recalls. "It was up to every team member to lead by example and it was great to be involved. If ever there was a risk to safety we would pull back, no matter the financial cost. The Filipino crew onboard deserves a mention too, because they make a massive contribution to the safe running of the ship." Tony Spence served as technical superintendent for the Northwest Shearwater and believes that the LNG tanker's crew thrived on the huge pressure to deliver an excellent safety record. "The North West Shelf operation is high profile, especially among our Japanese business partners, so it is imperative that we be seen to be better than our competitors. We put ourselves on a pedestal, so it would have been disastrous for our reputation to be knocked off it," he says. But for a trapped finger 10 years ago, the Northwest Shearwater would have recorded 17 years without a DAFWC. "It was pretty much 17 years with an unblemished record, which is amazing when you think that the vessel works in either the northwest Australian cyclone season or the Pacific typhoon season," says Spence. "There is a lot of pride onboard the Shearwater. I was very proud when she reached her 10-year landmark, because I felt a part of that success. The safety culture is second to none and I am sure it filtered onto other vessels in the fleet. I remember once seeing one of the crew telling the captain to go and put on his safety helmet--the boss did as he was told. We were a team and everybody had the right to speak out on safety." David Baldry, chief executive officer of BP Shipping, hails their safety performance as a remarkable example of silent running. "Between them, these vessels have worked several million manhours in some of the harshest

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environments and with the most complex of operations," he says. "I would like to take this opportunity, on behalf of everyone across BP Shipping, to thank the captains, officers and crews, as well as the shore-side support teams who are all instrumental in contributing to this outstanding achievement." HELIOS PLAZA: TRADING UP New state-of-the-art building to be BP's flagship trading post and an upstream learning hub. Horizon reports In addition to top-class compliance and control infrastructures, trading businesses must have two key ingredients: highly skilled people and the best in-systems technology. With that in mind, BP is constructing a new, fit-for-purpose building in Houston, US, that will help its traders work more effectively, as well as enhance teamwork, through better communication and information flows--features that will draw the best traders, and their critical support staff, to Houston's growing North America Gas and Power (NAGP) business, part of BP's global integrated supply and trading (IST) function. "Building design is critical for success in IST," says Simon Orebi Gann, responsible for BP's IST offices in the UK, Canada, Chicago and Singapore, who recently visited the site with Brian Gilvary (pictured above right), IST's chief executive officer, to have a close look at the construction, and talk to the team responsible. "Helios Plaza is going to improve the trading process by incorporating features that help traders perform at enhanced levels." NAGP, known to its external customers as BP Energy, is a successful, growing business in the highly competitive Houston gas and power trading and marketing arena. The design of a flagship building makes a big difference in continuing that success, through increased efficiency and better results. For NAGP, performance rests on revenue from effective gas and power trading. Its new building will operate 24 hours a day, seven days a week, in a cost-efficient, environmentally conscious way in order to support the large amount of technology required to keep traders in accurate touch with the markets, and execute deals quickly and efficiently. Attracting talent: As a result, Helios Plaza will help BP Energy attract and retain talented energy traders along with the market analysts and other personnel critical to the success of BP's trading operations. Helios Plaza will also be home to the exploration and production (E&P) learning centre, an important addition to BP's learning and development agenda for E&P. "BP's leadership recognizes that developing E&P talent is a critical priority. This new facility is designed to serve as a cornerstone for a more robust and expanded global learning programme," says Don Shoultz, head of E&P learning and development. "Over the past few months, we have worked closely with the E&P leadership team, technical vice presidents and directors of organizational development to design a facility that meets both their current and future learning needs. This centre will serve as both the flagship for delivering learning programmes around the world and as the hub of real-time distance learning and e-learning programmes." Scheduled for completion in 2009, construction is well under way, with safety a key priority. Contractors attend daily safety meetings and receive onsite training unique to the building. Dave Kinnaird, Helios Plaza project manager, ensures compliance with safe construction practices in accordance with BP standards. On his recent visit to the construction site, Gilvary was struck by the team's efforts: "I'm really impressed with the diligence of the people working on the construction of Helios Plaza to ensure the safety of the worksite. Everyone knows that compliance is essential to IST--it's the foundation of everything we do. But safety is also critical--and it's great to see it given such a high priority in a project that will enhance the ability of IST to do great business." Because trading occurs 24 hours a day, all year round, having a sustainable power source is crucial. So, Helios Plaza will operate under its own power source, using natural gas to run a combined heat and power generator instead of taking electricity from the grid. The building will also make good use of one of Houston's natural resources, with a rainwater collection system that will be used in place of tapwater for everything but washing, cooking and human use. These and other power-saving designs are expected to reduce the

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building's annual energy consumption by 30%. A robust building in Houston--a city prone to storms--also means it has to withstand category three hurricanes. Trading markets don't pause for natural or financial crises. Helios Plaza will be set to weather all storms with ground-breaking efficiency, technology and performance. CAMPAIGN TO INSPIRE FRESH CONFIDENCE Straightforward and fresh, BP's eye-catching advertising sends a clear message. Helen Campbell discusses the importance of connecting with the customer BP is one of the UK's--arguably the world's--most recognizable brands. But to stay ahead in a constantly evolving marketplace, even the most established names need to remind people who they are, what they stand for and how they contribute to society and daily life. BP is no exception, and 2008 has already seen the group reach millions through a series of brand communication campaigns in important markets, including the US, Germany and China. The latest phase of the campaign has successfully broadcast its key messages: that it is leading the way to secure a more dependable energy supply by investing in both conventional and alternative sources of energy throughout the world, as well as developing and applying advanced solutions and technologies. In a more subtle way, the campaign sends a message that BP is back. Leading role: As a global company, BP is well placed to play a leading role in squaring the need for energy security with environmental concerns, and in approaching this conundrum in a realistic, affordable, responsible way. BP has long held a leading position among energy producers promoting alternative energy sources. As the dilemma of energy security and climate change grows more acute, the advertising has reminded the market that oil and gas remain an essential part of the long-term picture. "BP was the first company to start talking about the energy paradox, and we have been very successful in building a reputation as industry shapers, innovators and environmental leaders," says Duncan Blake, BP's director of brand. "Our competitors have seen that as extremely valuable and have tried to emulate us, eroding some of our lead with huge investment in similar messages. "The recent UK campaign aimed to show that BP is meeting the world's needs for more secure, diverse, affordable energy and that we do this through a combination of oil and gas, together with newer forms of energy. It is not a case of `either/or', but a combination. That is the message we wanted to get across." The campaigns have been characterized by a clean, white appearance and a set of simple but effective coloured icons, each representing an energy type: oil, gas, wind, solar and biofuels, all closely echoing standard industry symbols for those energies. The result is a clear, uncluttered and matter-of-fact message. All the campaigns have been designed to communicate and reinforce BP's direction and attributes, following a period of change, and to increase external familiarity and `favourability', key indicators that are used to assess a brand's image and reputation. They have been targeted specifically at 15-20% of society--well-educated and well-read opinion formers and leaders who are interested in current affairs and politics, active in their communities and likely to influence change in others. The latest campaign is BP's first in the UK since 2006, and the advertisements have appeared in the national daily and Sunday press, as well as online and at poster sites nationally and in London, including Heathrow Terminal 5. The UK adverts have also included the 2012 Olympic logo, communicating BP's partnership with the Games that began at the Beijing handover. Peter Mather, head of BP UK, says this kind of campaign is of huge significance to BP's reputation and `licence to operate' in its home country. "We are headquartered here, are the UK's largest company by market capitalization and, amidst the global nature of our business, 14,000 of our staff and over half of our shareholders are UK-based," Mather says. "We continue to have significant operations in the UK, including North Sea oil and gas and a strong presence

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in retail, lubricants and liquefied petroleum gas. We also have new investments in biofuels in Hull, alongside our existing petrochemicals business and we are always on the look out for other attractive investments in the UK. "We have a lot of expectation on our shoulders and recognize the various roles we have to play. We don't pretend we are not in the oil and gas business but we are investing significant amounts of money in alternative energies. My hope for this campaign is that people see a fresh confidence about BP, and recognize we are actively working on the dilemma of energy security and climate change."

ONLINE ARCHIVE BRINGS MOVIE MAGIC TO LIFE BP's filmmaking history is celebrated with a new website that allows users to download clips. Lisa Davison reports A new website that allows users easy access to thousands of hours of BP film footage will launch in January 2009, marking the culmination of several years' work to both preserve the company's visual history and capitalize on its assets. The BP Video Library (BPVL) is the creation of BPTV commissioning editor Steven Croston, who in 2005 found himself the new owner of BP's film archive. Much of its contents had clearly not been viewed in years and was in desperate need of repair. "My first thought was to preserve it," he says. Having valued the archive's replacement cost at $300 million, Croston and his team set about cataloguing its contents. "This has been an enormous job," he says. "Films and tapes have to be viewed and `shot-listed'. With more than 15,000 of them in the collection, even knowing where to start was a challenge. But we now have more clarity around what we have, who owns it and the potential for reuse." As well as BP film, the archive includes footage from its heritage companies--Amoco, ARCO, Veba and Castrol. BP's relationship with the silver screen dates back almost 90 years, with the production of a black and white, silent film documenting operations in Persia (now Iran) of the Anglo-Persian Oil Company--BP's forerunner. The film kickstarted a tradition of corporate-sponsored filmmaking that has included In the Land of the Shah, the Oscar-nominated Forth Bridge Road, and Two Laps of Honour, which charted the success of Formula One racing driver Stirling Moss at Monaco and Nürburgring in 1961. In the early 1960s, BP produced a series of acclaimed trade test films, used by the BBC to test black and white broadcasts in the run-up to the launch of BBC2. From 1964, the channel began testing in colour and on 24 August 1973 the last trade test film--BP's Oscar-winning short film Giuseppina (pictured)--was aired. These films remain popular, and BPVL still gets requests from fans to access them. During the 1970s, it was estimated that more than 20 million people saw BP's films, often shown as B-movies in cinemas, as well as in schools. Such was their influence that in 1974 a Financial Times film critic wrote: "BP films invariably outlast, outstrip and out-distribute the films of any other company." While the 1980s and 90s saw production move to more business-focused, magazine- style programmes, the corporate-sponsored documentary is now enjoying a resurgence in BP thanks to its centenary film. Almost three years in the making, it will be shown both inside BP and in public throughout 2009. "It's an exciting time," says Croston. "Corporate filmmaking is a longstanding art and BP's centenary has offered us the opportunity to tap into a tradition and make a film that we are proud to show to the world." Furthermore, with revenues from traditional television advertising in decline, broadcasters are more interested in co-operating with organizations such as BP to develop sponsored content. "It allows them to produce highquality programmes that support a company's agenda in a more subtle way than a commercial," says Croston. "The experience we've gained in the past few years puts us in a strong position to move into this space." The online archive will offer a wealth of content. "This is a fantastic record of our company and the ages it has lived through," says Croston. "Getting it digitized has been a labour of love and I'm looking forward to seeing all the ways that people use the content."

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To find out more visit www.bpvideolibrary.com from 5 January 2009.

Horizon, Issue Seven 2008 Milestones

REPORT BY Vartan Amadouny

Alaska: the first year: The development of Prudhoe Bay was fraught with challenge, but it proved victorious for oil pioneers ARCO's discovery of oil at Prudhoe Bay, Alaska--declared commercial in March 1968--marked the climax of a pioneering exploration campaign, and the beginning of an even more difficult development phase. Between ARCO's declaration and BP's discovery of the largest portion of the reservoir a year later, the planning of full field development and the design and construction of the Trans-Alaska pipeline were put into effect. At the time, it was presumed that first oil from the North Slope would flow down the pipeline in early 1972. The planners were adrift by five years and billions of dollars. There were three obstacles to progress in 1968: capital risk, engineering, and politics. Of those three, raising the capital turned out to be the least of the worries that occupied the consortium of oil companies led by BP, Arco and Humble (a subsidiary of Exxon). The largest oilfield in the western hemisphere indicated the strong likelihood of other giants on the North Slope, so the long-term financial returns looked good. As Clive Hardcastle, BP's representative in Alaska, put it: "...we are just not conditioned to looking for puddles. We look for the big oil with all the greater risks that go with it." The second obstacle was to find the engineering solutions to produce oil 24 hours a day, seven days a week in Arctic conditions, where the temperature hovered at -22°F (-30°C) for much of the year. Full field development required the creation of a network of wellheads--with feeder lines bringing oil to the Trans-Alaska pipeline--as well as access roads into and out of the North Slope and accommodation for staff. The delicate conditions of the tundra and its permafrost led to design solutions that would prevent hot oil from melting the ice and, as a consequence, lead to soil erosion and land subsidence. Along the pipeline route in the south a zig-zag formation was designed to minimize the effect of earthquakes on the structure. The design and construction of the 1,300km (800 miles) Trans-Alaska pipeline broke records in its day as the most expensive, privately funded engineering project in US history. In that first year, the route from Prudhoe Bay across the Brooks Mountains to Valdez was the favoured option. Alternative options included a pipeline across the Mackenzie Delta through Canada to Chicago, while Exxon funded the SS Manhattan expedition to see if a maritime route to the west coast of the US through the North-West Passage was feasible. Political issues proved to be the hardest obstacle to overcome. These were shaped by public anxiety at the impact modern industry would have on the pristine wilderness of Alaska. The dilemma for Alaska at this time was measured by 25% unemployment; many of the indigenous Indians, from the Chugach in the south, to the Inupiat in the north, lived in poverty, dependent on hunting and fishing for their income. Alaska needed modern industry to provide it with substantial revenues. Hardcastle and officials from ARCO and Humble made regular appearances at public meetings to explain how the North Slope and the pipeline would be developed, and what impact they would have on the environment. It was a tough job, but it was the environmental lobby in the Lower 48, notably the Wilderness Society and the Sierra Club, whose challenge on the federal government's environmental stipulations delayed the permits to begin work on the pipeline until 1975. Two years later, first oil left Prudhoe Bay in July, arriving at Valdez in August. In the end, 1968 in Alaska was a victory for the oil pioneers who interpreted complex seismic records, and organized the exploration and development of oil in some of the harshest conditions on the planet.

Horizon, Issue Seven 2008 Talking Point

REPORT BY Jack Bovill

Spellbound: The chair of the Spelling Society looks at a debate that's raging across the world and asks: what's going on in the spelling world? There's a buzz about spelling at the moment in the UK press and other media. Debate is also rife among the Europeans. When reading about spelling, the key words to look for in the press are: variant, modernize, regularize, text and update. The French bit the bullet in October 2008 when their dictionary of choice Le Petit Robert introduced 6,000 variant spellings, with the blessing of the Acadamie Francaise. Previously, French and English were the only major European languages not to update their spelling systems, so that what you read you could then pronounce with confidence. Two months earlier, Dr Ken Smith, a lecturer in criminology at Bucks New University, UK, enquired whether university students under his care could be allowed to spell 10 words in a variant manner, thus freeing him up to get on with the job he is paid for--which is not as a spell checker. "Only 10?!" you say. Well, change is contentious, especially when it comes to spelling. The ensuing media debate following Smith's request for variant spellings was lively and controversial. Meanwhile, the Association of Countries speaking Portuguese has, this year, signed into law a mutual accord that brings the few slight spelling variations between those countries into line, such that the word optimo, pronounced otimo in all these countries, will indeed be spelt otimo. But perhaps the most interesting developments are happening in Finland. They have the most phonetic of languages--it does not take a child much more than six months to master the Finnish spelling system, once they have cleared the hurdle of learning the alphabet. The Finns--not ones to rest on their laurels--are at work, but not on Finnish. English is seen as an important skill to acquire. The Finnish understand the difficulties for people for whom English is not their maternal tongue and who first come to the language in its written form as opposed to spoken. In its written form, English is confusing. What you read, you can't necessarily pronounce with confidence: the word wrong may start with a w, but the `w' is silent. Finnish authorities are considering printing all English language textbooks with the silent letters in a lighter type: wrong, becomes wrong; knife becomes knife; accommodation becomes accommodation. How does this help the student? Where you have redundant--or silent--letters their presence is confusing for the learner. The reader of the above text is told to ignore the fainter type, or silent letter, when saying the word. While this is only a start, its greatest use is for pupils whose first contact with English is in its written form. As the chair of the Spelling Society I have appeared more than 50 times this summer on television and radio to raise awareness of the problems caused by the irregularity of English spelling. One of those problems is the possibility that English will soon be eclipsed as the European language of choice. There are now more people for whom Spanish is their maternal tongue. Spanish is remarkably phonetic and is correspondingly easier to learn. You only need visit California and the states bordering on Mexico to see its influence. No doubt we will hear more of spelling modernization, as the battle to remain the world language hots up. This has already happened in dispute resolution at the Olympic Games, where the language of choice is now Spanish. Don't say you haven't been warned. To find out more visit www.spellingsociety.org

Horizon, Issue Seven 2008 People

BP PEOPLE: A FORCE TO BE RECKONED WITH Faced with the might of Hurricane Ike, BP staff showed they have what it takes in a crisis, putting others' needs before their own. Photography by Marc Morrison On Friday 12 September 2008, some 7,800 BP employees and contractors from Houston and cities dotted along Galveston Bay and onto Galveston Island, were facing the reality that a major hurricane was going to strike the energy capital of the US the following day. BP America, based in Houston, had already prepared for three serious concerns: its people and their communities, its operations, and the US oil, gas and fuel supply. Almost like an hourly doomsday report, weather experts honed and refined their forecasts of the inevitable onslaught of Hurricane Ike. By 10 September, they were confidently predicting that it would plough through the high-density area of oil production in the Gulf of Mexico (GoM), onto land where around 25% of the US oil, gas and chemical plant operates, and further inland to Houston, where all oil majors have offices critical to oil and gas production, refining and trading. BP America's headquarters at the Westlake campus in north Houston had relocated critical business operations and planned to keep the site closed until damage assessment and repairs made it safe to return to work. Most of the majors have refineries in Texas City or Baytown, oil platforms in the GoM, and terminals for pipelines that receive and deliver oil, natural gas and fuel near the coast. BP's Texas City refinery had been secured with a `ride-out' staff safely in place and the platforms in Ike's path were evacuated several days earlier. Texas is the largest crude oil-producing and refining state in the country and is home to 25 refineries, most of which are clustered around the Houston Ship Channel and Galveston Bay. After Hurricane Gustav made landfall on 1 September 2008, Ike appeared bent on finishing where its predecessor had left off. Its path aimed directly through the upper Texas Gulf coast, just west of Gustav's route which had gone through the Houma and Baton Rouge areas, also key to the US energy industry and BP's offshore operations. On Friday night, Houston and Galveston County lost power, leaving millions in hot darkness in the hours before Ike's landfall. Ike sustained winds around the centre eyewall of 175km (110 miles) per hour when it made landfall, with a staggering diameter of 1,000km (625 miles). Coastal areas were evacuated while millions of Houstonians, told by officials to stay in place, hunkered down to weather the storm. A hurricane the size of the Mediterranean Sea was targeting Houston and Galveston, reaching hundreds of miles east towards Florida and west down the Texas coastline. During the crisis preparation, one consistent message came through loud and clear in BP: people are the primary focus of this effort. Safety, security and assistance for BP employees and the communities where they live was the mantra of the crisis team. Bob Malone, president of BP America, remained closely involved with the relief effort from day one: "I am very proud of the way BP employees responded to Hurricane Ike. People worked long hours to support their coworkers, to restore our operations and to meet the needs of our customers. And despite power outages and damage to their own homes, they also gave their time and their dollars to the relief effort." The safety net beneath BP employees is called RUOK. It's a sophisticated tracking system created after Hurricanes Katrina and Rita of 2005. Steve Fortune, chief information officer for the GoM, and his team built a system whereby employees and contractors can sign in and ask for assistance. As a result, BP was able to make sure people and their families were safe during the Hurricane Ike crisis. "All 7,800 people were accounted for," says Parag Paleja, the IT&S project manager who stopped his normal work and co-ordinated the RUOK system. "When our people entered the RUOK system, their status was

Horizon, Issue Seven 2008

plotted on a map of the area which enabled an accurate and secure assessment of the extent of potential need." RUOK co-ordinated with the humanitarian assistance team (HAT), the BP America response team, the business continuity planning team, the incident management teams, and the business support team. BP employees volunteer to operate these important groups and are on call to assist employees impacted by a crisis such as Hurricane Ike. HAT, advised by human resources crisis manager Ian McClellan, was set up in Naperville since Houston was in Ike's forecasted path. The volunteers began gathering there the week leading up to Ike's landfall. HAT members were BP's first responders. "More than 2,000 case files were set up for employees who needed BP's help," says Parag. More than 2 million households and businesses lost power--some for weeks. Without it, city water pumps and water purification facilities were disabled and there were limited supplies of water, food, fuel and no refrigeration. Suddenly, the country's most highly concentrated area of fuel and energy was powerless. Because the Houston and Galveston areas had nothing to spare, HAT volunteers in Naperville located sources of food, water, fuel, power generators and the planes, helicopters and trucks required to deliver the goods to points of distribution in and around the affected areas. BP people generously volunteered their time to unload the trucks and hand out the goods. The Texas City refinery co-ordinated much of its own efforts for employees and the community, with the help of a HAT group in nearby Hitchcock. Best people: Thanks to the tireless work of Irma Moreno, BP Texas City's community affairs co-ordinator, refinery staff volunteers and the HAT collaborated to deliver much-needed supplies to humanitarian organizations in Galveston and Harris Counties. Irma notes: "At the conclusion of the six-day first-response effort, an observer of the company's contributions said it made him believe that BP stands for `best people'." Situated on Galveston Bay, Texas City was right in the path of Hurricane Ike. Many employees suffered property loss, but in spite of these challenges the refinery made a remarkable return to operation within days of the landfall. According to Keith Casey, the plant's business unit leader: "BP is back. We're setting an example for people by the way we've come together and handled this. It's our biggest reward to be up and running, to be firmly on the path to an industry-leader position again." Carefully managed: Meanwhile, record levels of rain in northwest Indiana and the Chicago metropolitan area--a direct result of the same storm--forced many people to evacuate their homes, and operations at Whiting refinery had to be carefully managed. However, just like their Texan colleagues, Whiting staff were quick to support their neighbours. Iris Cross, manager of external affairs, Houston, participated with a panel of employees, BP Foundation board members and Bob Malone to allocate a contribution of $8 million for the relief effort. Funds were given to local Salvation Army organizations, the American Red Cross, Mainland Communities United Way, several Galveston community organizations and to Louisiana's continuing recovery effort following Hurricane Gustav. The BP Foundation is also matching employee donations up to $1 million. Iris acknowledges the critical need for this money, yet sees greater value in the extraordinary giving of time by BP staff. "Hundreds of BP people continued to volunteer. From handing out bags of ice to delivering hot meals to senior citizens who still can't shop for food, from setting up clothes donation centres at schools, to helping staff at the Krause Children's Center, BP people were there." Her first email to employees asking for volunteers went out on Wednesday, just four days after the hurricane made its mark. "Less than 24 hours after sending my email, BP staff had left their personal recovery work to volunteer for others in need. Big hearts and a passion for giving define BP people," states Iris.

Horizon, Issue Seven 2008 The Helios Awards

MOVING BP FORWARD The Executive Team announced this year's Helios Awards winners at a ceremony in London on 3 December. The event highlighted outstanding examples of BP at its best. Finalists and winners shared their ideas and achievements with colleagues and guests. The Executive Team presented awards to the six winning teams, thanking them for their commitment to BP's safety, people and performance priorities, and for supporting the forward agenda. "These stories represent an extraordinary cross-section of everything that is good about BP," says Steve Shaw, Helios Awards manager. "From multi-billion dollar production projects to rural community investment, and from technical innovation to long-term safe, reliable, efficient operations. Everyone involved in these stories is helping to move BP forward." The Executive Team also presented awards to the winners of the four Safety Awards--more on this on page 32. Human Energy Award This category celebrates BP as a pioneer. A company that meets challenges others cannot. The winner has put the forward agenda into action, and consistently delivered benefits and value to stakeholders by exemplifying the attributes that make BP distinctive. Winner: The first link in the chain--Refining, US Whiplashed by two tragedies in 2005--the fatal explosion and Hurricane Rita--Texas City refinery had to demonstrate it could recover and be a safe, reliable operator. The start-up in April 2006 and subsequent silent running of Pipestill3A--a critical feedstock unit--helped provide 99.7% unit availability throughout 2007, along with a reduction in environmental emissions by 25%, compared to 2005, and increased crude feed-rate in the past three years. It has sustained operational excellence, with a culture of ownership among its people, and strong communication between site support groups. Partnership Award This award recognises that relationships are vital to BP's future. The winner demonstrated that through partnership, they looked beyond traditional ways of doing business, created value and mutual advantage, grew expertise and shared knowledge. Winner: Reducing poverty through partnership-- E&P, Angola Angola may be rich in hydrocarbons, but travel to the interior and you'll find 75% of the population practices agriculture. However, many live in poverty without means of plying their trade. Working with Banco Sol, a local bank, and the NGO Action for Rural and Environmental Development, BP established the Greater Plutonio micro-credit programme. By December 2007, more than 10,000 people had benefited, allowing families to diversify their cultivation, enhance commercial activity and improve diets. Judges selected the programme because it broke "the image of `big oil' not reaching the average Angolan." Green Winner: Reduce, reuse and recycle--Asia Olefins & Derivatives, China Water shortage is a chronic problem in China and businesses have to demonstrate their commitment to environmentally sound operations. The team behind SECCO--a joint venture between BP and Sinopec-- exceeded expectations by applying best practice and technology to plant design and processes, including the incorporation of a steam condensate recycle system within the ethylene cracker plant. The result? A reduction of 9.6 million tonnes in the use of cooling water per year, a 15% decrease in water usage compared with plant design, and a water recycle rate of 97.94%. Finalists: Reduce, reuse, recycle--Asia Olefins & Derivatives, China It pays to be green--Refining, Spain

Horizon, Issue Seven 2008

Money for nothing, NoX for free--Refining, US Landfarming in the Arctic--Remediation Management, US Performance Winner: The ACG mega-Project--E&P, Azerbaijan In April 2008, the final phase of the `contract of the century' was delivered with the start of production from Azerbaijan's Deepwater Gunashli platform. BP delivered the $10 billion Azeri-Chirag-Gunashli (ACG) mega-project using standardized equipment and `cloned' design systems to reduce the amount of construction time, and setting a benchmark for rigorous project management. As well as enhancing local infrastructure, ACG has trained 15,000 local workers to international standards, introduced new technology and safety management and overall left a mark of confidence that Azerbaijan has the capability to build one of the world's largest oilfield developments. Finalists: The ACG mega-project--E&P, Azerbaijan A stitch in time--Technology, US Show me the money! -- Lubricants, UK The first link in the chain--Refining, US Progressive Winner: How green is the valley now?--Remediation Management, UK Since 2000, the remediation management team has worked closely with local stakeholders, the Welsh Assembly Government and Neath Port Talbot County Borough Council to transform the land on which BP's oldest UK refinery--Llandarcy--once stood from a heavily polluted brownfield site into a location that could benefit the local community. After eight years in the planning process, a groundbreaking deal was signed in May 2008 to construct an urban village. The deal will see the delivery of 4,000 eco-excellent homes, businesses and schools, along with the rejuvenation of local wildlife through designated protection zones. Finalists: How green is the valley now? -- Remediation Management, UK Reducing poverty through partnership--E&P, Angola Redefining xylene treatment execution the BP way--E&P, US Total productivity management--Aromatics & Acetyls, Taiwan Innovation Winner: Making barrels by choking slugs--E&P, UK An automatic control system designed to tackle slugging--the cyclical build-up and blow-out of liquid in a well or riser--is transforming the way BP deals with the problem. Traditional methods require partial closure of the asset's choke valve, resulting in a loss of production. So, E&P Technology launched a low-cost research project to find a solution, applying expertise from within BP and externally. The research resulted in a novel system, which eases slugging while maintaining production. A successful field trial has been conducted at BP's Valhall field, Norway and has made a measurable improvement to the safe operation of facilities, with a reduction in the potential of incidents. Finalists: Making barrels by choking slugs--E&P, UK Through thick and thin-- Technology, UK Reinventing 3D in Oman-- E&P, Oman CommLinx--Integrated Refiner and Marketer, Midwest US

Horizon, Issue Seven 2008 Safety Awards

Winner--European Logistics As one of the largest, most diverse logistics operations in BP, the European Logistics team manages more than 3,000 heavy goods vehicles across 18 countries, along with a network of 47 owned and 15 managed terminals. In the past three years, the team has created a special culture to improve safety performance and is today recognized as best in class within BP and the industry. Achievements include a best ever serious vehicle accident rate of 0.02, a fuel-site deliverability ratio of more than 99%, and requests for professional support by external bodies such as the UK Health and Safety Executive.

Winner--Lingen Refinery, Germany Successful implementation of a Control of Work (CoW) standard requires the support of everyone across a refinery, and Lingen is an excellent example of this in action. To embed changes in the site's safety culture, an interdisciplinary team created a set of tools, processes and training, including a new CoW film and a new permit request template to improve the ratio of planned versus unplanned work. The result was successful implementation without any compromise on the refinery's long years of silent running, a unit availability of 98.1%, with a record utilization of 89.3%.

Winner--BP Trinidad & Tobago Over the past four years, the team in Trinidad & Tobago has built a strong, focused safety culture that has seen them record 8.5 million manhours without a day away from work case incident, and a reduction in the motor vehicle accident rate from 1.2 in 2003 to zero in 2008. By focusing on safety leadership through monthly discussions, coaching and proactive communication, the team has seen an outstanding improvement in personal safety. Indeed, the implementation of Control of Work and Integrity Management Standards has reduced incidents by 70%.

Winner--North America Gas Good integrity management ensures that BP's operations, and the equipment used, is fit for purpose, and that processes are in place to prevent failure. Guided by BP's Integrity Management Standard, the Six-Point Plan and their own custom-built approach known as `pride, ownership and excellence', the North America Gas team has acted to dramatically reduce its operational risks. To do this, it has taken a series of actions including the relocation of production equipment and gas pipelines that were near schools, risk assessed all transmission lines, conducted 100,000 equipment inspections and carried out 4,400 competence assessments.

Horizon, Issue Seven 2008

CANOE CLUB ON COURSE FOR OLYMPIC SUCCESS BP's proud association with the Royal Canoe Club over the years has given its members vital support in their bid for Olympic selection in 2012. Paul Whitehouse reports BP's position as a sponsor of the 2012 Olympic Games in London is well documented. However, perhaps not quite so widely known is the background of support the company has provided for one of the sports clubs currently training athletes as hopefuls for the next Team GB selection. The Royal Canoe Club, based on the River Thames at Teddington, UK, is one of the official training centres for the competitors aiming for success in 2012. Although today's facilities are supported by national funding, it is unlikely the club would exist in its current form without financial backing from BP over the previous two decades. Indeed, the depth of that bond is demonstrated by the fact that some teams still race in green and gold, which can be recognized as the BP livery. The Royal Canoe Club dates back to the 1800s, when the sport was launched in Europe by John MacGregor, a Scottish lawyer living in London who had been introduced to canoeing during a visit to North America. After touring Europe and the Middle East to pursue the pastime in a craft he designed, he formed a group in 1866 which attracted an auspicious membership, including diplomats, doctors and businessmen, with Edward, Prince of Wales acting as commodore from 1867 and Queen Victoria's patronage following in 1873. By 1936, the club's performance was strong enough to represent Britain at the Berlin Olympics, the year canoeing was first featured at the Games. Competition success: The club continued throughout the 20th century and BP's involvement came in the early 1990s, when the Royal Canoe Club acquired the nearby Walbrook Rowing Club, which had been established for BP staff members some years previously. Operating side-by-side, the two clubs also amalgamated a club for skiffs--another type of competition boat. Since then, Walbrook's membership has opened up and expanded beyond BP staff, with flourishing competition success. Dominic Carlyle, a BP contractor and club member who competes internationally in a discipline called outrigging, explains: "The whole site today is a registered Olympic training centre for the UK and that is where a lot of the young canoeists will be coming from. The BP site had a clubhouse built in 1983 and there is a waterway which cuts the site in half. It became linked as a single club in 1998. When BP came onsite in 1983, it actually purchased the Canoe Club's land as well." Following the merger, the land was transferred back to the joint club and, in earlier years of the joint enterprise, BP also provided financial assistance which helped both clubs to progress. A new clubhouse has now been built and opened in October 2008, providing accommodation for the vessels used by the clubs, in addition to improved facilities for members. The clubs share all the premises, including a gym, restaurant and changing facilities. Today, the National Lottery fund has meant that sports find sponsorship and grants easier to obtain, so BP's direct involvement is no longer necessary, though it provided some of the impetus to put the club in the strong position it now holds. "Walbrook has gone beyond being a staff-only organization. It was sponsored into early 2000 and still maintains BP's brand colours," says Dominic. "The club is now at the forefront of the sport. There is a good mix of young and mature rowers and paddlers, as well as international coaches coming in," he says. "The club would not have had the land to have worked on without BP and elements of BP are still there. Some of the international teams would not be where they are without BP's involvement. Its initial investment really helped the sport to grow across the world, as well as here at home." The quality of competitors to emerge from the training centre is demonstrated by the success of Dr Tim Brabant, who secured a gold medal in the 500 metres and a bronze in the 1,000 metres single canoeist events at this year's Beijing Olympics.

Horizon, Issue Seven 2008

BP also sponsors several Tahitian events in the Pacific. From this club, several other international training venues have been created to help fellow countries with their Olympic athletes, including in Washington, US and Toronto, Canada. "BP is a sponsor of the Olympics in 2012, but there is also a link back to the local development of the sport and the guys winning gold medals. It is good to see that sort of long-term commitment," says Dominic.

Horizon, Issue Seven 2008

People

TEAMS UNITE TO MANAGE TOUGH TIMES The summer of 2008 brought two challenging situations to the Caucasus. By pulling together, the staff of BP Georgia, Turkey and Azerbaijan successfully weathered both. Martin Naughton reports August this year started out much like any other before it in the Caucasus. With temperatures hitting almost 40°C (104°F), anyone who could had already left for the coast or the cooler higher ground. Those still left in Tbilisi walked the streets slowly, hugging the shade, trying to avoid direct sunlight. Baku wasn't much better, but at least it had the onshore breezes coming in from the Caspian. Far inland, the BP office in Ankara had the air conditioning cranked up. The summer calm, however, wasn't to last long. First, came a fire in eastern Turkey that saw flames 80 metres (260 feet) high, resulting in the shutdown of the entire Baku- Tbilisi-Ceyhan (BTC) pipeline. As if this wasn't enough, Georgia, the transit country for oil and gas going to Europe, found itself embroiled in war. Adversity has a curious way of bringing out the best in people. The story of how BP responded to the two simultaneously unfolding crises certainly demonstrates this. High prices: Along with the flames, oil prices were also shooting up, hitting $140 a barrel at the time. With up to 1 million barrels a day flowing through the BTC pipeline, time was of the essence. A long delay in getting the line up and running also threatened production in the Caspian. Limited storage capacity meant wells would eventually have to be shut down if there was no outlet for the oil. It was a logistical and financial nightmare that nobody wanted to face. Solen Karavelioglu, operations support assurance manager at BP Turkey, was only three days into her new job, but her response was typical of the wider BP one. Called out at midnight, she knew something "extremely serious" had happened. Working with Botas International--the BTC pipeline operator in Turkey--her instinct and training immediately kicked in. "We worked with Botas to focus on attacking the issue itself, attacking the fire," she recalls, "and at the same time we started to think about the repair work programme and planning ahead." Solen wasn't alone. In Baku, Rashid Javanshir, BTC chief executive and onshore vice president, was coordinating a wider BP response, getting a clearer picture of the problem and what needed to be done to help Botas. Extinguishing the fire immediately wasn't an option, as it was better environmentally to burn off the remaining oil rather than let it seep into the ground. So, they had to wait. However, "when the fire dropped off to a low level, then our people moved in," he says. Over in Tbilisi, Burt Greenwalt, project manager pipelines and facilities, was getting ready to do just that, assembling what he calls his "unique team" and necessary equipment to help Botas and BP in Turkey. Dark clouds: As Burt mapped out possible scenarios he could face in Turkey, dark clouds were brewing over Georgia itself. With war breaking out on 7 August, Burt and his team were forced to take what he calls "the scenic route" to Turkey, along the back roads through the mountains, as the main east-west corridor was cut off by the fighting. They arrived on 13 August and, along with colleagues from Ankara as well as co-ordination from Baku, they did the near impossible: by the 20 August, the BTC pipeline was back up and running. The achievement in itself is incredible, but even more so, given what was simultaneously going on in Georgia. Apart from the human tragedy that was unfolding, the war was posing major challenges for BP. Hugh McDowell, BP head of country for Georgia, outlines the company's priorities at the time: "It is people first; it is the environment always, making sure we can intervene to minimize any impact on the environment; and then it's about equipment and facilities." Initially, the task was to account for everybody, including contractors and family members, and make sure they were okay. But as things heated up, it became apparent that relocation of expatriate staff might be on the cards. BP's Tbilisi office had already arranged Azerbaijani visas for staff, and on 11 August the decision was

Horizon, Issue Seven 2008

taken to evacuate all non-essential expatriates. Nino Meladze, human resources manager in Tbilisi, explains the rationale: "If you're an expat, it's a different story," she says. "You are more dependent on the company; you are still a guest; you are more insecure, away from your family and friends, and missing many comforting things." At 7.30am the following day, a convoy of three minibuses, a couple of pick-up trucks and security, back and front, left for Azerbaijan. When they got there, they were met by, among others, Chris Christy from BP's Baku office. Daniel Hoffman, transportation and driver training consultant, was one of those on the receiving end of her professional care and kindness. "A real darling," he recalls, "she made sure you had everything." This included accommodation, food and other needs and, if you wanted it, medical help and even crisis counselling. Despite the treatment, most were not pleased about evacuating. "We weren't happy to leave," Daniel says. "A lot of people were saying `we're coming back tomorrow'." That sense of solidarity with Georgian colleagues didn't go unnoticed. "On a personal level," says Nino, herself a Georgian, "it was very pleasant that so many foreigners wanted to stay. It was a good sign of loyalty that they really valued not only their jobs, but being with their colleagues." Throughout the entire crisis, BP's Tbilisi office remained open, "making sure staff had a central point from which to get information and ensuring we could address people's needs," explains Hugh. "It was really like a home, bringing people together in a community, where people could come in and talk, and work through their own personal issues, knowing that they could draw on the company." Although the war impacted little on Tbilisi, it was, according to Burt, "a day-to-day ordeal for everybody." Mostly, it was the uncertainty, but many employees did have other issues to contend with, too. Some had family members caught on the other side of the frontline and one, a dispatcher, even had to deal with his family being displaced from Gori, a town at the centre of the crisis. Still, "he wanted to work and help the movement of our people and vehicles," Hugh recalls. And all the while, the pipeline pump stations remained operational. "Isolated from their families, the operators really kept things together," says David Horsburgh, Georgia exports operations manager. "Some of our sites, especially on the Western Route sections, were very close to the fighting. I've worked in Georgia for a number of years and have been part of the growth to world-scale oil and gas production. My Georgian colleagues showed real professionalism during this conflict." Difficult times: Western Route production technician Archil Monaselidze was on duty at pump station 13 during the conflict and comments: "These were very difficult times. During the conflict, we kept the station lights off so as not to attract attention. I saw military jets fly over and there were tanks stationed in my village for some time. Our management decided to shut down the pipeline to protect the environment." Meanwhile Baku, according to Hugh, was "looking at all of the implications," including crisis management, morale, co-ordinating responses in three countries, and getting business resumed. Baku also laid down the markers by which the company successfully operated. This ensured that crude oil exports continued, albeit at reduced rates, using alternative routes such as by rail and using the Northern Route Export Pipeline through Russia . Rashid explains the approach: "There is no single rule book you can follow in such a crisis. The key to success was to let people make the right judgements and not to panic, and to work professionally." Erin Ford, technical director for Botas International, certainly saw this approach on the ground as he mainly handled the operations at the site. "I was amazed at how synchronized we all worked in Turkey, Azerbaijan and Georgia, how much support we received and how keen people were to help us out," he says. "It made me proud of the people who work in this company; everyone went beyond their responsibilities." With both crises having now receded, and the summer heat just a memory, it's that sense of pride that most BP people involved hold on to. "It was a good lesson," concludes Nino, "to see so many people in a positive light and to see so many decent people caring about others." BP DRIVERS DELIVER A HEROES' WELCOME FOR BRITISH TEAM As London honours Britain's Olympic athletes, 12 BP road tanker drivers have a day to remember

Horizon, Issue Seven 2008

The Beijing Olympic and Paralympic Games may have drawn to a close, but the excitement surrounding them still lingers. Nowhere is this more true than in London, where a heroes' parade took place on 16 October to celebrate the most successful British team since 1908. As the official oil and gas partner of London 2012, BP-- and 12 of its road tanker drivers--were right in the middle of the celebrations. For one day only, Darryl Garnett, Peter Hughes, Alan Tagg, Andy Davies, Mark Dowling, Paul Gallagher, Alan Hicks, Steve Russell, Jon Kilby, Dave Quinton, Andy Rogers and Frank Walker swapped their normal duties-- delivering fuel to forecourts--to drive flatbed trucks, converted into floats, to take the athletes on their celebratory tour of London. "It was daunting to have some of the world's leading athletes on a flatbed behind you and huge crowds on either side," says Darryl, from BP's Northampton oil terminal. "The atmosphere was electric." The drivers were all selected on the basis of their exemplary safety and service records, and their participation marked a key lesson learned from this year's Games--to get employees involved. "Beijing had lots of great examples of how Olympic partners involve their people," says Tony Gilling, London 2012 marketing and sponsorship director. "One of the best I saw was McDonald's, which had selected an Olympic crew--the best of its service staff--to manage its restaurant in the Olympic Village. It was a way of thanking their best-performing people, while celebrating great service." When the opportunity to support the heroes' parade came along, asking BP's drivers to man the floats was a perfect opportunity to put the lesson into practice. "This was a great way to say `thank you' for their dedication, and for their continued focus on safety and service," says Nigel Wardle, BP UK logistics manager. "While there was huge excitement about mixing with the Olympic and Paralympic athletes, our job was to keep focused on the route to Trafalgar Square. Our team did brilliantly and were fantastic ambassadors for BP." "It was good to know we were all very well prepared and well trained for times like this," adds Darryl. The event also gave London a chance to show the world how proud it is to be the official Olympic city, inspiring thousands of people to line the streets to see their favourite athletes. It's this kind of inspiration that Tony says is why BP is a natural partner for London 2012. "What shone through in Beijing were the Olympic values, and how closely aligned they are to those of BP," he says. "Values that go far beyond performance and winning, but reach out to fundamental human qualities: optimism, inspiration, courage, partnership and acting at the frontier. What struck me was the strength of human endeavour-- especially during the Paralympic Games--to achieve great things, no matter the odds." Values are not the only touch point between BP and the Games, says Mike Sharrock, partnership director for London 2012: "There is a scale of internationalism about the Olympics that we can identify with--every single country that BP operates in was represented in Beijing. In terms of inspiring our employees around the world, that's a unique opportunity." Beijing also taught the team that if BP wants to create a distinctive space externally then it needs to be fast out of the blocks in raising awareness. "Talking to other IOC [International Olympic Committee] partners, it was clear that we need to start early in order to generate the best returns, both in brand recognition and sales," says Tony. "This is not just something that kicks into gear six weeks before the London Olympic and Paralympic Games. We have to start now." To do that, Mike and the team are already developing relationships both within BP and externally. "We've seen Beijing in action, now we have to take those lessons learned and build our strategy," he says. Having BP drivers participate in the heroes' parade is just the first evidence of that strategy in action. Talk to any of the 12 men and their pleasure shines through. "I was at the front of the parade," says Frank, from BP's Hemel Hempstead terminal. "It felt like being on top of the world: carrying all those heroes, looking at the marching band and thousands of well-wishers. I felt incredibly proud." AIRBP'S DREAM TICKET Hemel team puts the fun into fundraising as they help to send children in need on a holiday of a lifetime. Russell Whitfield reports

Horizon, Issue Seven 2008

Staff at AirBP Hemel Hempstead are celebrating after donating more than $54,000 to their chosen charity, Dreamflight. Unlike many other children's charities, Dreamfight does not fund research or purchase medical equipment. Its ethos is that bringing fun and joy to the lives of seriously ill and disabled children is every bit as important as scientific study. Once a year, Dreamflight charters a Boeing 747 to take a group of children on the holiday of a lifetime to Disneyworld in Florida. It's a worthy but expensive cause, costing nearly $1 million for each trip--but it is one with which organizers at AirBP felt they could naturally associate their brand. Led by UK country manager Ian Harrison and a fundraising committee comprising Nikki Walters, Stephanie Brizs, Penny Ambury, Dominika Pidzik, Katie Miller and Di Everitt, the Hemel Hempstead team set out to contribute to the cost of the aviation fuel for this year's trip. Fundraising events included book sales, raffles, sponsored head-shaving and leg-waxing events, and an inoffice Christmas market which was particularly well received by the staff in the run-up to the festive season. Money was also raised by fining bad behaviour--such as answering emails during meetings. In all, the team raised around $23,500, with donations from other organizations bolstering the pot by a further $3,000. The BP employee matching fund doubled the final amount, resulting in a grand total of $54,169. A cheque was presented to Dreamflight representatives on 10 October 2008 and the children flew out to Florida nine days later. AirBP employee Vikki Rudgalvis was also selected to make the trip as a helper. "We are very proud of our achievements," says fundraising co-ordinator Nikki. "In light of the current credit crunch, it just goes to show that people are still willing to support a good cause." For more information on fundraising, visit http://employeematchingfund.bpweb.bp.com n

NEWS IN BRIEF Charity run The Netherlands The Dutch BP Roparun team successfully completed the Paris-Rotterdam charity relay run, notching up an impressive 530km (330 miles). The run is the longest non-stop relay race in the world. The Dutch team, who all work at BP's Rotterdam refinery, completed their mammoth journey in 46 hours, raising $50,000 for cancer research. The employee matching fund matched $28,000 bringing the final total to an incredible $78,000. Home help US The Katy Home Savers Association has helped Dick and Verldean Eggleston find a new lease of life thanks to some expert home repairs. Dick had been unable to go outside on his own after bone cancer in his hip confined him to a motorized scooter. But after two days of work, 20 volunteers had installed a ramp for Dick's wheelchair, as well as reattaching gutters, a new door, mending a fence, cleaning and manicuring the Egglestons' yard and garden for both of them to enjoy. "Now they can be proud of their home again, as we all are of our own," says Richard Baker, a North America Gas senior land survey technician. Baker and his wife Pat, along with Rick Macdonald, a North America Gas reservoir engineer, and Ron Scheet, a North America Gas technical support specialist, set up Katy Home Savers in 2005.

Hospital gift UK A member of the management team at BP's Hamble oil terminal has foregone his 25th `long service' celebration party to purchase much-needed equipment for Southampton hospital's radiotherapy department. The Hamble employee, who does not wish to be named, was undergoing treatment in the department when he noticed a scarcity of equipment used to keep patients' heads still while being scanned. He immediately

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contacted terminal manager Mike Myden and asked if his 25th anniversary party, which usually takes the form of a dinner for friends and associates, could be translated into new equipment. Mike agreed and the cheque was presented to Caroyln O'Donnovan, head of radiotherapy, by the terminal's storage operations supervisor Ken McCallum. Said Ken:"This was a very touching gesture and I was happy to do the honours on behalf of my colleague."

Horizon, Issue Seven 2008 Letter from Oman

REPORT BY Kate Pooler ARABIAN OUTLOOK A seamless blend of east and west I moved out to Muscat with my family in August 2007. It was a tough decision for Dad to move us to a different country, but I took the view that we would not be away from home forever and that we should find out more about Oman. When we arrived, we did not know what to expect--my friends asked if I would go to school on a camel--but what we found was surprising. I was struck by the amount of English spoken and how all the signs were in English as well as Arabic. We've had lots of family visit us here and their perceptions of this part of the world have changed. Life here is very different, though. The fact that the weekend starts on a Thursday is strange in itself. There are fewer places to go than in the UK, but going to the beach every weekend is still a real novelty. People tend to spend their free time outside, on boats, snorkelling or diving. Every weekend is like a mini-holiday. Coming to the Middle East is a bit of a culture shock--seeing women completely covered in their abayas and shayla scarves was different, but you get used to it quickly and soon realize that a different way of dressing doesn't necessarily mean you're so different as people. School has been a challenge. It was hard to leave my friends at home--we were a very close-knit group. I'm also planning to apply for Oxford University back in the UK and the teachers out in Oman have been great, but have never had to help someone prepare for it before. It's difficult finding the right study materials and organization is a little harder, but it has taught me to be self-motivated. Education is important, though--the government has made it a high priority. Before 1970, Oman had only three formal schools with 1,000 students. Today there are more than 1,000 state schools and around 650,000 students. There are three British and American schools in Muscat. Oman is still a very traditional place. All the buildings have to be constructed in the old Arabian style, but there are a few Western influences. You can go to Starbucks for your coffee and, if you want Western clothes, Gap and Zara opened up recently. You see more and more tourists, too. Further along the coast, a whole series of brand new hotels are being built. People's lives are very different in Muscat compared with out in the villages, though. I've visited villages a few times through an initiative I help out at called the Omani Dress Project. It was set up by an American lady who has a love of the traditional Omani dress and is worried it is dying out in favour of the abaya. When you go to the villages, you see women wearing the traditional styles more often. Life outside of the city is much more traditional--many still live as Bedouin, with their camels and goats, and the weight of the silver jewellery they wear acts as a display of their wealth. Ultimately, the most important thing is to get out there and learn about the environment you live in. There are things I miss about home--grass, our garden, even the British rain--but Oman is really enriching, fun and different. It would be very easy to carry on living as close to a British lifestyle as possible, without learning about the country you're in. But you have to make the most of what is around you.

Horizon, Issue Seven 2008 Exploration and Production

REPORT BY Lisa Davidson Rock solid approach to Omani gas Working round the clock has certainly paid off for BP Oman's 3D seismic team. With a record-breaking survey complete, drilling is now well under way to source and tap vast reservoirs of tight gas in the desert. Photography by Richard Davies The energy industry has always been defined by the challenge to access new sources of oil and gas. With those sources increasingly located in hard-to-get-at places, that challenge increasingly drives geoscientists to push the limits of available technology. Such is the case in Oman where, five hours' drive from the capital city of Muscat, lies a rich seam of gas. Its existence has long been known. However, it lies buried under 5km (three miles) of marble-hard rock. Wells have been drilled in the past but the tightness of the gas meant the flow quickly dwindled to uneconomic levels. All that is changing, though, thanks to an agreement between BP and the government of Oman, signed in January 2007. Under it, BP has six years to appraise four tight gas reservoirs. As well as acquiring new seismic data (along with re-analysis of existing studies), it will carry out drilling and well testing before deciding whether to move forward with full field development. It's a tough schedule, but the potential is huge. Located in the Middle East, with Saudi Arabia to its west and the Arabian Sea to the east, Oman has been producing oil and gas since the late 1960s. For much of that time, the industry was dominated by Petroleum Development of Oman (PDO)--owned by the government, Shell, Total and Partex. By allowing greater competition, Oman is hoping to unlock its tight reserves. "The reservoirs themselves have already been discovered," says Michael Townshend, president of BP Oman. "Looking at the existing data, we believe there could be a considerable quantity of recoverable gas." BP's experience with tight gas in other parts of the world was a significant factor in its winning bid. "Much of our gas in North America is tight," says John Pooler, subsurface and wells director. "It reflects the mature nature of the industry there." The first task was to produce new seismic data. Five months of 24-hour-a-day operations culminated in the successful completion of BP's largest onshore three dimensional seismic study. The new data helps the team locate natural fractures in the rock which, in turn, helps decide where to drill new wells. Covering a 2,800km2 (1,080 square mile) area in such a short space of time required some creative thinking. "Virtually everything about this survey is different," says senior geophysicist Jack Bouska. Some of those things are equipment adjustments, such as larger vibrator trucks--40 tonnes instead of the usual 30--and shorter vibration times--eight seconds instead of 12, to manage wear and tear, because Bouska ran them at 95% capacity instead of the standard 80%. Night-time operations in the desert are also rare, but tight deadlines and a lack of sandstorms at night pushed the team to work round-the-clock. More significant was the development of a groundbreaking technique called distance separated simultaneous sweeping, or DS3. The process allowed the team to conduct simultaneous seismic sweeps, using two or three widely spaced individual vibrator trucks vibrating at the same time. In the past, the three units would have been grouped closely together to produce a single record. In Oman, they were spaced 12km (7.5 miles) apart, generating multiple records and allowing the crew to cover double, or even triple, the area in one go. World record: The idea had risks: one truck might not produce enough energy to bring back a clear image; the simultaneous vibrations could have interfered with each other, again corrupting the image. Instead, the technique allowed the team to acquire the same amount of data in a single day as would previously have been obtained in one week. It also allowed them to repeatedly break the world record for the number of individual recorded vibration points in a single day--reaching 12,200 in July.

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These game-changing advances have caused other BP teams and the industry at large to take particular interest. Bouska has been invited to speak at the Society of Exploration Geophysicists next year as their `distinguished lecturer in geophysics', and the team also earned a place in this year's Helios Awards finals. The survey's completion is an enormous milestone in BP Oman's schedule. Another is the start of appraisal drilling. This is already under way, with two rigs mobilized in the block: the first well, Khazzan-4, was spudded in September 2008 and the second in November. The vertical wells will be `fracced' using hydraulic fracturing stimulation. Fraccing is used to encourage gas to flow over a longer period of time, using hydraulic pressure to force cracks in the rock hundreds of metres long. These are then propped open with sand, so that when the pressure is taken away the fracture doesn't automatically reseal itself. By using the seismic data to find naturally occurring fractures, the team hopes to use the rock's own weak points to help draw out the gas. "It's quite an artform," says John Gaffey, subsurface team leader. "There is no room for trial and error here, so we have been trying to apply as much science and engineering in advance to give us the best chance of success. Our role in the industry is to tackle things on the technological edge, and this is out there." Also `out there' is the operational hub itself. Located in the middle of the desert, the Khazzan/Makarem project is five hours' drive from the capital city of Muscat and BP's new Oman headquarters. Also, the only way to get around the block itself is by driving, the risk of which had to be managed with extreme care. "Any remote field location has two big challenges," says Townshend. "One is driving safety--which is a big risk for BP anywhere in the world--and the other is its very remoteness. While you might have core operations taking place in a relatively small area, it's the peripheral work you have to keep a close eye on. There might be two people going out on a survey an hour's drive away from the core and we have to keep on top of that. During the construction of the Baku-Tbilisi-Ceyhan pipeline [prior to Oman, Townshend was the chief executive of the BTC project], we found it was these peripheral activities where the accidents were occurring." Food hygiene is another challenge. The 200-strong seismic team all had to be kept healthy in the searing summer heat. "It wouldn't take much for an entire crew to get food poisoning," says Gaffey, proud of the fact that no one has fallen sick. "It's a big risk, but one that we continually manage." Indeed, the team has much to be pleased about when it comes to its safety record during the seismic operations, with some 450,000 man hours completed, 1 million km (620,000 miles) driven and not a single day away from work case or recordable incident. "I'm extremely proud of the work the team has already done," says Townshend. "There is, of course, a lot more to do in a relatively short timescale. However, it is an exciting opportunity to apply the best BP technology-- often for the first time in Oman--in order to help the country meet its future energy targets." OMAN CAPITAL CITY: Muscat AREA: 309,500km2 (119,500 square miles) POPULATION: 2.6 million POPULATION DENSITY: 8.4 per km2 OFFICIAL LANGUAGE: Arabic THE ROAD TO GREATER RECOVERY Thanks to the `pushing reservoir limits' flagship programme, BP now has the technology to get even more out of its existing oil reservoirs. Derek Smith finds out how it is done BP has identified 10 technology areas--or flagship programmes--each with the potential to deliver more than 1 billion barrels of additional reserves. As it is becoming increasingly difficult to find or gain access to new hydrocarbon resources, and the scale of investment required for new exploration continues to grow, BP, like others in the industry, needs to make the most of the reserves it already has. Once a reservoir is successfully brought onstream, it is essential to enhance recovery from it for as long as economically sensible.

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The `recovery factor'--the amount of oil actually produced from a conventional oil reservoir--is typically around 35%. In other words, some 65% of the oil known to be in the field is left in the ground. Improving this rate, even marginally, delivers significant benefits. For BP, just a 1% increase in the recovery would deliver an extra 2 billion barrels of oil equivalent. The pushing reservoir limits (PRL) programme aims to push the boundaries of what is possible to maximize recovery of conventional oil from BP's existing portfolio. BP's technologists believe it has the potential to deliver the most of all the flagship technology programmes. Field trials: PRL encompasses 11 technology projects at different stages of maturity. The initiatives span the development process--from supporting novel ideas, by enhancing their laboratory development and testing, to conducting field trials to supporting deployment. The industry average recovery factor is as low as 35% because of four factors: displacement--the ability of the oil to be pushed out of the tiny spaces it fills in the rock by an injected fluid, usually water, sometimes gas; sweep--the ability of the injected fluid to spread out from the injection well and gain access to all the rock between injector and producer; drainage--the ability to place a well in contact with each separate part of the reservoir, enabling as much of the oil in the reservoir as possible to reach a production well; and commercial cut-off--the limit to which you can operate the field before the small trickle of oil still being produced at the end of field life has less value than the cost of operating the field. Since these are all fractions, multiplying them together gives a small number. When you consider the individual fractions, sweep and displacement are the lowest and, hence, offer the most potential for improvement. That is why PRL focuses on technologies that improve those in particular. BP has a higher recovery factor than the industry average and a good track record in enhancing oil recovery. A hydrocarbon miscible gas project begun at the Prudhoe Bay oil field in the 1980s, for example, is now the world's largest, and has contributed to a recovery factor of more than 60%. Prudhoe Bay processes, compresses and reinjects more gas every day than the UK consumes daily as a nation. In addition, BP is using miscible gas to improve recovery at its Ula and Magnus fields in the North Sea. Technologies that improve the effectiveness of water-floods are becoming more important as BP moves towards 2010 when some 80% of its oil production will come from water-flood projects. In addition to the use of miscible gas, BP has invented two game-changing approaches, revolutionizing the way incremental oil is recovered from water-floods. The first is the oil recovery technology known as BrightWaterTM, where a special thermally activated chemical is injected into reservoirs to increase the sweep of the injected water. BrightWater has the ability to increase recovery factors by up to 10%, and field trials have already produced hundreds of thousands of barrels of additional oil at low cost. The second is BP's LoSalTM enhanced oil recovery technology, in which injection water with a much lowerthan-usual salt content is used to flush out--or displace--extra oil from the reservoir. Reduced salinity water can boost oil recovery by more than 40%. The best result so far has shown a 54% increase over a conventional water-flood--an incredible impact that has energized interest across the industry. Commercial application: Taking a technology idea through to commercial application requires time, patience and long-term financial support. These conditions have been met in the development of BrightWater and LoSal. The company has completed more than 20 treatments with BrightWater, more than any other operator, and 75% of the first wave that has passed its evaluation window has been successful. In parallel, several LoSal projects are progressing through design into implementation. Both hold an enormous amount of potential for BP. Investment in PRL has grown many-fold over the past five years and now amounts to 10s of millions of dollars, and continues to grow. LoSal is a trademark of BP. BrightWater is a trademark of the Nalco company.

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DENALI PROJECT GAINS MOMENTUM Engineering and permitting are moving ahead briskly on the Alaska gas pipeline project, Denali, in preparation for a 2010 open season. Frank baker reports

The formation of Denali--The Alaska Gas Pipeline LLC--by BP Alaska and its partner, ConocoPhillips, has kickstarted the long-awaited Alaska natural gas pipeline project. In June, BP Alaska's Bud Fackrell was named president of Denali and other top Denali executives have since been selected. These included Robert Hawley from BP Alaska, named vice president of technical services and health, safety and environment director, and Steve Findlay from ConocoPhillips, vice president for regulatory affairs and chief compliance officer. Other leadership team members are: David O' Connor, vice president and gas treatment plant project general manager; Kris Fuhr, vice president and general manager, Alaska mainline project; Patrick Coughlin, vice president and general counsel; Dave Calvin, vice president and operations director; Mehmet Muftuoglu, vice president and chief financial officer; and Scott Jepsen, vice president for external affairs. The Denali headquarters are located in Anchorage and a small field office was opened in Tok, Alaska, near the proposed pipeline route. By the end of the year, a third office will be opened in Calgary, Canada. Last summer, fieldwork began to support permit applications. More than 60 people carried out cultural resource identification and research, hydrology studies, soil and air monitoring and aerial photography and mapping. "The 2008 fieldwork programme was a critical step towards meeting the target of a 2010 open season, when buyers of pipeline space [the `shippers'] make long-term financial commitments that underpin pipeline financing," notes Fackrell. "Our pre-filing and ongoing communication with the US Federal Energy Regulatory Commission will ensure we progress the project on time." The largest private sector project in North American history, Denali will extend around 3,200km (2,000 miles) from Alaska's North Slope to Alberta, Canada, with a possible 2,400km (1,500 mile) leg to US markets. The large-diameter, 122-132cm (48-52 inch), high-pressure pipeline will carry about 4 billion cubic feet of natural gas a day from the North Slope for delivery to Alaskan, Canadian and lower 48 markets. At that rate, it will supply about 6 to 8% of US consumption. Studies of long-term gas needs will begin in 2009 and at least five gas take-off points are planned. Design features: A major component of the project will be the construction of a gas treatment plant on the North Slope that will remove carbon dioxide and other impurities. The plant will dehydrate, compress and chill the gas for its shipment through the pipeline. The new facility will dwarf the existing gas facilities, the central compression plant and central gas facility, which are already the largest of their kind in the world. Most of the chilled pipeline will be buried, while segments through earthquake-prone areas and major river crossings will be built above ground and placed on supports similar to those used for the trans-Alaska oil pipeline. Upgrades of key infrastructure in Alaska will be required, mainly on bridges, highways and ports needed to support heavy loads during construction. The 2.5cm (one inch) thick pipe walls will make it very heavy and loads on highways and bridges will be substantial. Fackrell says that at peak construction the pipeline project will require 10,000 construction workers. Workforce development: "Training will be a monumental task," he says. "Fortunately, Denali's owners--BP and ConocoPhillips--have had job development programmes under way for years and we hope to tap into this experience." Fackrell says Denali will fill up to 100 positions over the next nine months, and will have up to 400 people conducting fieldwork in Alaska and Canada in 2009. The company expects to spend around $600 million

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between now and the filing of regulatory permits following open season. That investment will help to get the best cost estimates possible for the project and move it forward. SEISMIC STUDY SETS SAIL IN LIBYA Work has begun on the largest 3D marine seismic survey ever carried out in BP. Horizon reports on its progress, along with plans for an onshore study WORK HAS begun on the largest 3D marine seismic survey that BP has ever undertaken--in one of North Africa's most prospective hydrocarbons basins. Located in the Mediterranean waters of Libya's Sirt basin, the survey is the first major exploration activity since the ratification in December 2007 of an historic $1.25 billion exploration and production agreement between BP, its partner the Libyan Investment Corporation (LIC) and Libya's National Oil Corporation. Sirt is Libya's most productive hydrocarbons basin. More than 45 billion barrels of oil equivalent have been discovered to date, through approximately 280 discoveries. Most of these have been onshore, with offshore areas remaining largely undrilled. BP is confident that the basin's prospectivity extends offshore, where the company is now exploring. BP's exploration acreage in the offshore Sirt basin is around 30,000km2 (11,600 square miles), equivalent to the size of Belgium. The seismic survey area is 17,000km2 (6,600 square miles). Seismic acquisition will continue until mid-2009, making it one of the most ambitious seismic projects ever embarked upon in the industry as a whole. The survey is a conventional 3D marine seismic survey and is being carried out by the vessel Geowave Endeavour--operated by the Norwegian company Wavefield Inseis. During October, the Endeavour surveyed 2,500km2 (950 square miles) of acreage--a production world record for a seismic vessel. The first swath-- some 4,000km2 (1,500 square miles)--is due for completion in December. "This is a major achievement for BP in Libya," says Jens Pace, BP North Africa's exploration director. "BP Libya's seismic team, together with our colleagues in Wavefield Inseis, have done an outstanding job in getting us to where we are today--safely, cost effectively, and ahead of schedule. "This is the first operational step on the road to delivering what we hope will be BP's next significant offshore petroleum province." An initial phase of seismic data processing is conducted onboard the Endeavour, by Geotrace. This data will then be interpreted by BP geoscience personnel--including Libyan geologists recently recruited by BP-- located in Tripoli and Sunbury, UK, and a 3D model of the subsea geology will be generated. "This will enable us to make recommendations to our drilling team on structures to drill, which should commence in 2010," says Pace. Preparations have also begun on an onshore seismic survey in the deep deserts of the highly prospective Ghadames basin. This represents another enormous undertaking--the acreage awarded to BP and the LIC in the North Ghadames block alone is 24,000km2 (9,300 square miles), roughly equivalent to the size of Kuwait.

Libya Facts

CAPITAL: Tripoli LANGUAGE: Arabic POPULATION: 6,036,000 LAND MASS: 1,759,540km2 MUNICIPALITIES: 32 GROSS DOMESTIC PRODUCT (TOTAL): $75 billion GROSS DOMESTIC PRODUCT (PER CAPITA): $12,700

Horizon, Issue Seven 2008

NEWS IN BRIEF Oil discovery US BP has made a discovery at its Freedom prospect in the deepwater Gulf of Mexico. The well, located in Mississippi Canyon Block 948, approximately 110km (70 miles) southeast of the Louisiana coast, is in around 1,860 metres (6,100 feet) of water. The Freedom well was drilled to a total depth of approximately 8,927 metres (29,280 feet). Appraisal will be required to determine the size and commerciality of the discovery. "This further strengthens BP's resource base and portfolio of potential development projects in the Gulf of Mexico," says Exploration & Production chief executive Andy Inglis. BTC export Kazakhstan The first volumes of oil from the Tengiz oil field in Kazakhstan have entered the Baku-Tbilisi-Ceyhan (BTC) pipeline from Azerbaijan to Turkey. Kazakhstani oil is transported by the pipeline in accordance with the agreement reached by the BTC Pipeline Company and Tengiz Chevron, the owner and operating company of the Tengiz field. The shipment of Tengiz marks the first time non-Azeri crude has been put into the 1 million barrels per day BTC pipeline, and also represents a notable step in Kazakhstan's efforts to diversify its crude export routes. International standards Russia TNK-BP's drilling and well servicing enterprises have been awarded international certificates ISO 9001, ISO 14001 and OHSAS 18001. The certificates testify that TNK-BP's oilfield services comply with international standards, with regard to quality of operations, protection of environment and occupational safety. "The work done to achieve this international certification has laid a foundation for creating an integrated management system for our oilfield services. This will ensure the company is more efficient, its employees safer and the quality of our services will continuously improve," says Mikhail Osipov, executive vice president for oilfield services. Angolan discovery Angola BP and Sonangol have announced the Dione oil discovery in ultra-deepwater Block 31, offshore Angola. This is the 16th discovery BP has made in Block 31, and is located around nine kilometres (5.5 miles) to the southwest of the Juno-1 discovery. Dione was drilled in a water depth of 1,696 metres (5,564 feet), some 390km (240 miles) northwest of Luanda and reached a total depth of 3,272 metres (10,732 feet) below sea level. Well test results confirmed the capacity of the reservoir to flow in excess of 5,000 barrels a day under production conditions. Anniversary celebrations Azerbaijan On 20 September, Azerbaijan marked the 14th anniversary of the signing of the Azeri-Chirag-Gunashli (ACG) production sharing agreement, widely known as the `contract of the century'. The date also coincided with the 160th anniversary of industrial oil production in Azerbaijan. In 2007, the country's oil production reached a record level of 42 million barrels, with this year's production forecast to rise to 52 million, according to the State Oil Company of Azerbaijan. Industry honour US Robert Webb, adviser for measurement and allocation, has been honored by the American Petroleum Institute (API) for 20 years of service to the API's standards programme. "On behalf of the Institute's Committee on Petroleum Measurement and Committee on Production Measurement and Allocation, I want to take this opportunity to personally thank BP America for Bob's invaluable service," said API Standards director, David Miller. "Bob recognized the need for technical standards in this emerging area early on and was able to

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effectively convey his vision to the rest of the industry." At BP, Webb is now focusing on leading BP's efforts to develop industry measurement standards for what he calls `the extreme upstream'. Farewell sunshine US North Slope workers bid `farewell' to the sun as it made its last dip below the horizon 24 November, not to return again until 18 January, an absence of 56 days. Veteran Arctic dwellers have their own way of dealing with the psychological and physiological effects of long hours of darkness, ranging from vitamin supplements to daily treatments with full spectrum lighting. UK ­ Clair licenses BP and their partners in the Clair field have been offered the award of four licence blocks in the 25th seaward licencing round. The blocks, which are in the south west area of Clair, could help secure further appraisal activity, following the successful core area start up and subsequent work on the Clair Ridge. The Clair subsurface teams have completed a 3D seismic shoot of the blocks and will use this to assess the potential for drilling and development. Clair began production in February 2005. It was the first fixed platform in the West of Shetland area, brought onstream some 27 years after discovery, thanks to advances in technology, innovative engineering and fabrication and a strong partnership approach.

Horizon, Issue Seven 2008 Refining and Marketing

REPORT BY Joe Strebel WHITING HAS ALL THE RIGHT MOVES The Whiting refinery team had a tough time last year, but out of adversity can arise opportunity--in Whiting's case a chance to reposition for a strong future During its 100-plus years of operations, BP's Whiting refinery has endured many ups and downs. But the year 2007 stands out in that long history--not so much for the things that went awry as for the refinery's magnificent response to major adversities. Whiting's business unit manager Dan Sajkowski, characterized 2007 as "a really tough year", but also one during which "the Whiting team solved extremely complex problems in a remarkably short period of time and, what's more, did things right." The first setback occurred in March when a compressor seal failed, allowing hydrogen--used to remove sulfur from crude oil--to escape. A subsequent explosion and fire completely or partially destroyed three of the four compressors that served the refinery's cat feed hydrotreater, crippling Whiting's ability to process heavy, highsulfur crude oil. Rather than simply tackling repairs, refinery personnel first conducted a root cause analysis of the compressor fire. Their investigation uncovered issues with what had been accepted maintenance and operating practices. "There were also problems with the compressor design, as well as the instrumentation that monitors the machine's operations, and alerts operators to problems," says Jim Maguire, manager of projects. "We decided to address all these issues even though doing so would extend repair time." Dan Feddeler, reliability consultant, agrees the Whiting refinery response went well beyond simple repairs: "We made significant upgrades to the machines and adopted best practices to ensure that future operation would not repeat the previous failures." While the compressor repairs were proceeding, Whiting endured a second major problem. In April, a construction crane struck a high-voltage electric wire, interrupting power to several of Whiting's processing units. Although other units restarted safely, an inspection team discovered a minor leak in the 11 Pipestill C unit. Repairing the leak would be a minor job, but inspectors were troubled that pressure inside the vessel climbed sufficiently to cause a leak. "That investigation revealed the pressure relief system was inadequate--a design flaw that had been there all along, but which we were unaware of and which, if uncorrected, could lead to catastrophic failure," says Vic Venturini, asset manager of crude and infrastructure. In the spirit of `doing things right' the team widened its inspection and found the same problem in the 11 Pipestill A unit. This deeper look meant overcoming the original design flaws in the units' pressure venting system, before bringing 11 Pipestill A and C back to operation. Ultimately, the units were equipped with relief valves, combined with a sophisticated monitoring system that ensured the valves should not have to be used. "We adopted a safety instrument system that is the first of its kind," says Mike Scherwa, manager, engineering and technical. "It consists of dedicated computers and duplicate sensors that detect pressure abnormalities, and institute corrections before relief would be needed." Normally, more than two years of work would be needed to bring the 11 Pipestill units and hydrogen compressors back into service--an unacceptable period for reduced production at Whiting. To minimize downtime, both repair teams assigned key personnel from the refinery to focus full-time on restoring production, and brought in experts from BP's Refining Technology group, as well as external specialists. In addition, the teams brought equipment back into service in stages so the refinery achieved incremental increases in production. Using this approach, a spare compressor was obtained from the Texas City refinery and adapted to Whiting's system. Spare parts were utilized to help rebuild the destroyed compressors. That allowed high-sulfur crude processing to resume at a reduced rate within six months and all three compressors,

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with one spare, were returned to service in less than a year. Repairs and upgrades required construction to go on throughout the cold winter months, with many construction crews working overtime. "We heard back that some workers were feeling pressure to meet aggressive completion dates," says Venturini. "We had a stand-down and told the crews to let us worry about the deadlines. Their concern should only be about doing their jobs safely." The approach paid off as the 11 A unit came back online in early December 2007, restoring 70,000 barrels a day of heavy crude processing. In March 2008, the 11 C unit was restored to service with its 100,000 barrels a day of processing capacity. In addition to the staggered restoration of Whiting's processing capability, commercial teams helped make up for the lost production. "The fuels value chain showed remarkable ingenuity in adjusting the crude slate to replace heavy crude with sweeter blends that the refinery could process," says Mark Lutz, commercial manager. "In addition, the group was able to capture good margins on sales of partially refined product, which allowed Whiting to maintain higher crude runs." Key enabler: Whiting's ability to recover from severe setbacks in a short time is important in itself, but it raised additional opportunities. "Besides restoring refining capability, the team achieved operating stability, a key enabler for the decision to invest in the Operation Canadian Crude [OCC] project," says Sajkowski. That undertaking is expected to reach completion in 2011. Described as a rebirth for the refinery, the project will increase the facility's ability to process an additional 240,000 barrels a day of heavy crude oil produced from oil sands in Canada, and increase production of vehicle fuels by 6.4 million litres (1.7 million gallons). The OCC project represents a new start for Whiting as it moves forward into its second century of `doing things right'. Grandfather of refining adapts over the years The Whiting refinery was built by John D Rockefeller in 1898, on the southern shores of Lake Michigan. It formed the basis for Standard Oil of Indiana, later Amoco, which became part of the BP organization in 1999. Whiting, located in the heartland of the US, has witnessed many industry firsts. For example, the BurtonHumphreys thermal cracking process, that sharply increased the yield of gasoline from crude oil, was introduced there in 1913. In the 1930s and 1940s, research at Whiting led to key contributions to the development of the catalytic cracking process, which enabled refineries to produce even more fuel from a barrel of crude oil. This included higher-octane aviation fuel, essential to the World War II campaigns. Expansions over the past 100-plus years have increased Whiting's processing capacity to its current 400,000 barrels per day, making it the fourth largest refinery in the US. The facility produces gasoline, diesel, asphalt and other products. It occupies around 570 hectares (1,400 acres) and employs approximately 1,300 BP employees and some 500 contract workers. Daily production of 61 million litres (16 million gallons) of product--about half made up of gasoline--is enough to fuel 430,000 automobiles, 10,000 farm tractors, 22,000 large trucks, and 2,000 jet airliners. The Whiting refinery was designed to enable it to process `sour', or sulfur-laden, crude oil from newly discovered Lima field in the neighbouring state of Ohio. The current Operation Canadian Crude project will greatly expand the facility's ability to refine heavy crude from oil sands, mirroring its past and opening up the way for a new century of production.

Horizon, Issue Seven 2008

QUALITY PRODUCT THAT HELPS DRIVE BUSINESS A new assurance system in the US is helping deliver a more consistent product to customers. Joe Strebel reports The US fuels value chain (FVC) is pursuing a challenging, but essential, goal in today's fiercely competitive market: ensuring consistent product quality by providing customers with fuel products that meet specifications. The benefits are clear. A company that earns a reputation for quality attracts repeat customers. Conversely, poor quality breeds dissatisfied customers who spread, via word-of-mouth, news of their negative experience, with the possibility of multiplying lost sales. There are potential challenges. Turning the wrong valve, allowing instrumentation to go out of calibration, failure to verify that fuel purchased from a third party meets specification--all these, and many other processes, can erode quality. Moreover, the consequences grow exponentially depending on where they occur within the supply chain. "If a tanker truck unloads diesel fuel into a service station's gasoline tank, a few hundred customers' vehicles could be affected," says Mark Ensinger, manager, FVC technology, North America. "But a similar incident at a terminal supplying a number of service stations could cause problems for several thousand customers. If an incident occurs at the refinery, it could affect multiple terminals, involving service stations in different cities potentially affecting hundreds of thousands." To manage these risks, BP has developed a newly upgraded quality assurance system in the US. This system has been formed to: clarify accountabilities in the newly formed FVC structure and consolidate quality-related operating processes; identify and assess potential fuel quality risks at primary control points in the supply chain; and ensure any potential risks can be mitigated with robust processes and actions. After the formation of the FVCs, an initial risk analysis was conducted to pinpoint where to employ quality assurance process improvements. Based on this, and the consolidation of other quality assurance efforts, the project has developed a framework that clearly assigns individual responsibilities for fuel quality assurance. The project has also brought together, in a single system, all the procedural and emergency response documents for which other parts of the organization had previously been accountable. "In developing the system, the project was directed to keep the approach simple and straightforward to implement," says Mark Stanke, manager, quality assurance project. "We recognized the excellent system already in place in BP's Australia and New Zealand operations and the project team adapted it to represent the US FVC." The US quality assurance project preserved the core BP quality system proven over the past 15 years, incorporating best practices and adapting them to fit the new organizational requirements. "We work with a project governance board chaired by Angela Strank, vice president, technology global fuels and lubricant technology," says Stanke. "Board membership includes senior representatives from the US FVCs, including marketing, refining, fuels technology, US pipeline and logistics and global oil trading, who identify needs and make recommendations for the new quality assurance processes." Stanke consolidates these governance board inputs and works on implementation through a core project team. They then link the quality assurance framework with the quality assurance group essentials outlined in BP's Operating Management System, in terms of optimizing operations and following the principles of `people, performance, processes and plant'. Project expansion: The project is currently focusing on identifying critical quality control points in the supply chain, and ensuring any potential risks can be mitigated. This aspect is scheduled for completion by year end. In 2009, the project will expand to BP operations in Europe and southern Africa. Once the new processes are in place, the project has provisions to sustain quality assurance efforts by keeping them up to date through periodic risk assessments and training of personnel. Despite these efforts, the capacity for human error remains. Ensinger recalls an incident earlier in his career when he managed a fuels terminal in Philadelphia, US. "An experienced driver pulled into a service station, hooked up hoses and began filling the fuel tanks," he says. "It was only at that point he looked up and noticed

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he was at a competitor station across the street." Fuels quality assurance will continue to be successful by eliminating lapses and, if they do occur, by identifying them quickly and correcting them at minimal cost, while preserving BP's reputation for quality. For more information, visit http://productquality.bpweb.bp.com. FOR YOUR CONVENIENCE The expansion of the highly successful ampm c-store franchise across the US brings revenue increases well beyond expectation, writes Paula Kolmar These days, filling up often includes a stop in a service station's convenience store (c-store), where customers buy food and drinks. BP-owned and recognized c-store brand ampm has taken its successful model into the midwest and eastern US, where, until recently, customers and station owners were unfamiliar with it. Since marketing began in March 2008, however, brand awareness has sky-rocketed and new franchisees are buying the ampm c-store offer at an expanding pace. Created in 1978 by ARCO, ampm has long enjoyed high brand recognition in the western US. In late 2007, US convenience retail announced that ampm would be its single, national convenience brand. In addition, it announced it would convert its company-owned and company-operated gas and c-store locations in the US to franchises by mid- to late-2009. The decision created simplification and focus with a single business model where previously there had been multiple routes to market, offers and brands. Fiona MacLeod, business unit leader for convenience retail Americas, explains: "Simply put, our convenience business exists to support the delivery of the fuels value chain (FVC). The ampm brand has a great track record of attracting customers, which benefits BP as well as the franchisees in several ways. First, it gives the franchisee an alternative profit centre so they can grow their business; second, secured by 20-year contracts, we are able to have a long-term relationship with our franchisees on fuel and c-store; and third, it enhances the BP brand." In the west, the conversion to an all- franchise portfolio is largely coming through existing franchisees who want to operate additional ARCO/ampm sites. Alongside brand awareness, this desire for more sites is testament to the brand's staying power. In the midwest and southeast, the portfolio conversion is largely through jobbers (large fuel distributors) purchasing ampm stores, as well as supplying BP-branded fuel to the fuel facilities located at the store site. Instead of owning and operating fleets of trucks to move the product from terminals to the stations, BP will rely on its strong relationship with jobbers to buy the BP fuel and to use their own trucks to distribute it to the retailer. Andrew Baird, ampm vice president of marketing, emphasizes the importance of maintaining this relationship: "Increasingly, customers are choosing to get fuel at a place where they can also buy food. The ampm brand offers a vibrant, fun ambience, with food and drink selections that the customer can customize in ways only limited by the imagination. It is like a snack-food theme park where customers can indulge their cravings with abandon. In today's highly competitive c-store and gasoline business, franchisees are finding that ampm helps them compete." Success has been the result of improving the consistency of the ampm c-store and helping people relate to the fun, dynamic environment. According to MacLeod, customers relate very well to ampm. "We started from zero awareness in the midwest and southeast and have rapidly grown to levels we never anticipated in a few short months. To meet our prime goals, we had to deliver a strong and distinct offer to differentiate it from existing c-store competitors--vital in this tough US economic climate." "The business has been successful in attracting franchisees with the right business sense and financials to the ampm model," adds Baird. "When BP adds new franchisees, we provide training, marketing and merchandising expertise to help them consistently present the ampm `personality'." The programme fits well with BP's current strategy, says MacLeod: "A complex retail marketing system has been simplified with one brand and a business model that places the responsibility for operating this system with local entrepreneurs. In BP-branded markets we add the simplification of using jobbers as our fuel distribution source, resulting in growth for franchisees as well as BP. The convenience stores also provide

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customers with a fun place to indulge. "This is a fundamental change. We will release around $1 billion in capital employed, reduce our cost to serve by more than $500 million and, together with our FVC colleagues, put in place 20-year supply contracts to underpin our refinery and traded volumes. This is on top of $1 billion in proceeds from asset sales and is only possible because of our move to a single-branded channel of trade." Exciting challenges face BP staff in the new model. "Our ongoing transformation to franchise is very much a team effort with our FVC partners," MacLeod asserts. "And as a team, we are rapidly developing expertise in giving support to and maintaining existing franchisees, while growing our franchisee base. Growth is a constant and critical part of success in this competitive business, and we are up for the challenge." INSIDE AMPM arco founded the ampm brand in 1978 in California and it became part of BP when it acquired ARCO in 2000. ARCO-branded ampm stores can currently be found in California, Nevada, Oregon, Washington and Arizona; BP-branded ampm stores, meanwhile, are located in Chicago, Indianapolis, Pittsburgh, Orlando, Columbus, Cleveland, Cincinnati and Atlanta. There are also more than 2,000 ampm stores in Brazil, Japan and Mexico. The brand is a well-respected name in the industry, ranked by Franchise Times at number 29 on its list of 2008 Top 200 franchise systems, which marks a 10-point jump from last year's position. Indeed, powerful, distinctive branding is the cornerstone of ampm's high visibility in the convenience store industry. Particularly in the western US, ampm has broad name recognition, as a result of the familiar trademarks and unique marketing methods. By combining top brands with in-demand offerings, ampm franchises continue to lead in the convenience store industry: proprietary offers differentiate ampm from the competition; innovative marketing, branding and media advertising help support business growth; and the ampm franchise offer is leveraged by the strong BP and ARCO gasoline brands. Finally, the ampm training programme is among the franchise industry's most comprehensive, including back office accounting, safety and security, customer service, alcohol and tobacco sales, fast food preparation and inventory management. CASTROL PROFESSIONAL ROLLS OUT THE RED CARPET The training that puts automotive service advisers on the road to better performance. By Julia Pierce A new global training programme to improve the career development, performance and retention of frontline dealership staff in the automotive service sector is being rolled out by BP, starting in the UK. Red Carpet is part of the Castrol Professional offer and was launched in June this year to improve both customer satisfaction and encourage repeat business. The Castrol Professional programme has manufacturing partnerships with automotive brands, including BMW, Audi, Ford and Volkswagen. However, in order to do well within the sector, Castrol has long recognized that, although historically known as an oil company, value must be added through the `up-selling' of products, such as lubricants. Several years ago, the Castrol Professional team, therefore, approached automobile dealers within their network to ask how they could help to win more of the lubricants business. The answer given was to focus on service advisers and managers. Extensive research was undertaken, with 600 UK service advisers participating at the end of 2007. "We carried out the largest-ever research strategy with advisers," explains Adrian Brabazon, original equipment manufacturer and workshop marketing manager, UK and Ireland. "We looked at factors such as how long they had been there and what impacted on their role, in order to develop training for them. We found that the role is very difficult and with high staff turnover, we decided to be the champions of the service adviser, to gain them more recognition."

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Once the research had been analyzed, the results were presented to the trade press to gather credibility for the programme within the industry. Among the findings was the fact that although up-selling is the fifth most important role within the business, more than half of service advisers had received less than five days training and 29% did not want to be in the role any more, meaning their experience was in danger of being lost. Two programmes arose as a result--an online lubricants and sales training initative and Red Carpet. The latter, which can take place after the service adviser in question has participated in online training for a minimum of three months, was developed in conjunction with a leading company from the airline business that is recognized for its customer service skills. "It's evident that there are some issues and concerns for many service advisers around role clarification and key responsibilities or activities," says Hamish McCowan, aftersales and logistics director, Kia Motors UK. "The Castrol research highlights to the dealer principals the importance of role clarification, responsibilities and activities and we hope will enable them to understand the commercial impact and importance within their business." To develop the programme, BP worked with the Institute of the Motor Industry (IMI), the recognized training body for upskilling within the industry. The IMI is currently launching a new Motor Industry Accreditation scheme for service advisers in the UK, the first of its kind. Red Carpet has been designed to fulfil all the criteria for this assessment, and covers customer-focused soft skills, sales techniques and how to recognize customer needs. Offering tips on improving customer satisfaction, repeat business, up-sales and bottom-line performance, the programme has increased BP and the Castrol Professional brand's credibility, building on the success of online lubricant and sales training, with more than 700 service advisers registered across the UK and Ireland. "It has really helped to differentiate ourselves from the competition," says Max Wilkinson, business development manager. "Unlike some competitors, we have an added value offer. In the current economic environment, people are hanging on to their vehicles for longer, so looking after them well is key." As training takes place onsite at the dealership using interactive sessions, there is no need to do without staff while they train, saving money and minimizing disruption to the business. The interactive training is designed so staff can share best practice and provide a consistent approach to customers, as well as suggesting practical tips and tricks. Dealerships can use the programme to assess capability and performance, as well as increase repeat business--the net result being improved profits. POPULAR PARTNERSHIP REACHES A CENTURY Collaboration hits new high with the opening of the 100th BP/M&S Simply Food store, writes Mark Salt There were celebrations in BP's UK convenience retail business in September, as the successful partnership with Marks and Spencer (M&S) reached a century of stores. The opening of the 100th BP/M&S Simply Food store in Towcester, Northamptonshire, was commemorated by a visit from the town's mayor and a weekend of special events around the shop and town centre. The partnership has come a long way since the first pilot stores opened almost three years ago. "We are delighted to have reached 100 stores in our partnership with M&S," says UK convenience retail director Karen Hubbard. "The combination of BP's Connect offer and M&S Simply Food has been a great success, offering a unique blend of food for now and food for later." BP and M&S began their initial trial of M&S Simply Food at BP Connect sites back in October 2005, at Hammersmith Flyover in west London and Milton in Dumbarton. The trial was then extended to 11 sites during 2006, before being rolled out across the network of BP Connect sites in England and Scotland. The full rollout started in earnest in April 2007--with 89 stores opening for business in the past 16 months. It's hoped that there will eventually be a national network of between 150 and 200 stores. The collaboration lets customers choose from around 750 Simply Food lines, including ready meals, sandwiches, wine, flowers and basic groceries, alongside BP's award-winning Wild Bean Café and multibranded impulse and fuel offers.

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"This partnership has been great for the UK convenience retail business," says Hubbard, "allowing customers to select from such a wide selection of products. It has helped us make real strides on the path to becoming a great convenience retailer." The partnership has also created more than 600 new jobs across the country, and offered many new opportunities for successful staff. "This key achievement has only been delivered due to the hard work, dedication and commitment from hundreds of different people across the business."

NEWS IN BRIEF Safety acclaim US Cherry Contractors has won the top award from the Houston chapter of the American Builders and Contractors Association for a project in the demolition category. The organization won the accolade for their work on the plant closure and partial demolition of BP's linear alpha olefin chemical plant in Pasadena, Texas. BP closed the plant in 2006 and Project Pathway was launched to partially demolish it. The awards are based on multiple criteria, including safety, schedule, cost performance and innovation. Cherry Contractors won the award for excellence in construction and safety. The project was completed with zero recordable injuries. Terminal construction UK A major $30 million construction programme to enable Hamble oil terminal to import and distribute biofuels has been granted planning approval and will commence immediately. The work, which will last approximately 18 months, will involve the construction of three new storage tanks and associated import and road loading facilities on the 56-acre site on the banks of Southampton Water. The work is necessary to meet government guidelines on the introduction of biofuels into diesel and petrol sold on UK forecourts, reducing CO2 emissions. Refined reward Australia BP's Kwinana refinery has won a national awared for its 62-metre (200-foot) high, 300-tonne naphtha splitter column. The project, the largest piece of equipment ever built in Western Australia, won the Steel Fabricators Award from the Australian Steel Institute for its complexity, method of fabrication, erection and compliance with Australian Safety Standards. Funny accolade US Castrol-sponsored NHRA Funny Car rookie-of-the-year Ashley Force has also been named female athlete of the year by the Jim Murray Memorial Foundation during its 10th anniversary `Tribute to Living Legends of Sports and Media' awards dinner. The 25-year-old NHRA Funny Car driver, was first introduced to the sport by her 14-times Funny Car champion father John Force and spoke emotionally about growing up in a racing family and the journey she has taken to reach the top of her profession.

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Alternative Energy

SOLAR SAILS INTO CHINA With the construction of the iconic SolarSail in Guangdong, BP Solar showcases both cutting edge design and safety standards worthy of award. Horizon reports BP Solar recently completed the installation of the striking SolarSail at the Guangdong Science Centre, which will offset more than 25 tonnes of carbon dioxide emissions per year. The project not only had to satisfy the Guangdong government and the customer, the Guangdong Science Centre, but also BP's safety guidelines--which led to it being a commended entry in this year's Helios Awards. "The SolarSail is a fantastic example of `One BP': innovative people created the opportunity, developed the concept and then implemented it safely, within budget and on time," says Mark Twidell, performance unit leader (most of the world), BP Solar. "Also, it symbolizes what solar can bring to China--new ideas, new opportunities and new energy sources that can blend into the fabric of society without environmental impact." The SolarSail was part of an agreement to produce an innovative, iconic solar structure. BP Solar's expert teams in Australia and China collaborated to develop systems that could overcome many challenges. Crucially, BP's strong safety standards needed to be enforced in a country where cultural norms for construction staff include working barefoot on bamboo scaffolding. "There has been increased awareness of safety requirements on Chinese construction sites in recent years. However, the gap between these and BP Solar's standards is large," says Mike Schach, BP Solar project manager. "The greatest challenge was to close this gap on SolarSail's construction site." Power output: The result was a 20 metre (70 foot) high by 30 metre (100 foot) wide structure built from fabric, steel and transparent solar modules, secured with concrete plinths. It has a power output of more than 27,000 kilowatt-hours per year. BP Solar employed staff from a previous complex solar project in China to use their experience. The safety system integrated BP's Control of Work standard written in English and Chinese. BP inductions were carried out for construction staff who were then given BP-approved personal protective equipment. Bilingual staff were employed to communicate work orders and safety expectations. "Our local BP Solar project manager communicated with the team using regular `toolbox talks', while the safety compliance monitoring, corrective action and health safety, security and environmental recording were done by our local BP SunOasis joint venture staff," says Schach. The construction process was completed in eight weeks with no recordable injuries. External subcontractors in China who worked on the project have, as a result, adjusted their own safety standards and shared what they learnt within their own business. The project has also continued a practice of knowledge sharing, primarily between BP Solar Australia and BP SunOasis colleagues, while producing a strong commercial result for BP Solar. "Turnkey projects all have similar ingredients and we will use this proven recipe as a basis for future solar projects," says Schach. Setting a precedent for safety and innovation in the Chinese solar market, the SolarSail is more than just a green energy solution.

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BIOFUEL FOR THOUGHT Alternative Energy kickstarts a series of staff debates with a lively and informative discussion on BP's commitment to biofuels. Emily Furlong highlights the key points raised As governments, non-governmental organizations and the public continue to discuss the energy challenges facing the world, Alternative Energy (AE) staff recently had their chance to debate the significance of biofuels. Launched by chief executive officer Katrina Landis, it was the first in a series of events aimed at helping the AE team learn more about the business outside their team. News anchor: Chaired by BBC news anchor Mike Ramsden, who addressed the audience's questions to a panel of three--vice president of biofuels Philip New, business technology manager Ian Dobson and independent biofuels expert Jeremy Woods, from Imperial College, London--the debate began with an introduction to the sector. "We believe that biofuels, for the next 15-30 years, are probably the only real alternative to fossil fuels for road transport applications," said New. He went on to explain how biofuels respond to a set of political drivers, allaying concerns over energy security. As a substitute for traditional fuels, biofuels done well can help lower greenhouse gas emissions and bring wealth to rural communities in developing countries by providing new markets for cash crops. He added that the rise in their significance marks the "coming together of the two most fundamental value chains for mankind--energy and nutrition. It's the first time they have come together in a meaningful way." At this point, the floor was opened to questions from the audience. The first brought up ethical issues involving the farming of crops for biofuels in developing countries, and specifically how BP could benefit local communities. In answer, New highlighted BP's latest venture in Brazil, which had to go through strict social and environmental vetting before being given the green light. As 50% owner of Tropical BioEnergia SA, BP has replaced some manual labour with mechanized harvesting, allowing for better working conditions, training opportunities and increased pay, while making the agricultural process itself more efficient. The question of food versus fuel was also raised--are fuel crops being planted at the expense of food and will this lead to rises in food prices? This, said Woods, is the central issue in the public's mind concerning biofuels. However, questioning which land should be used for food and which for biofuels, he believes, misses a key point of the debate. Rather, the integration of food and biofuel production can lead to gains in yields and efficiency. Taking advantage of the knowledge and infrastructure investment brought about by biofuels research can lead to increased yield of both food and energy crops. This is a positive outcome BP hopes to see. At the Brazil plant, explained New, the once-degraded pasture is now being regenerated. Bagasse, a byproduct of crushing sugar juice out of the cane, is being turned into fodder to increase the number of cattle reared on the land. Food price inflation has many causal factors, but as biofuels account for only around 1% of global agriculture, their impact is limited. Indeed, the price of sugar cane has fallen in the past two years. Hot topic: Climate change was another hot topic. Can biofuels help lower greenhouse gas emissions? Dobson used Brazilian sugarcane ethanol to explain how carbon dioxide absorbed by plants as they grow can offset those emitted during the whole process of farming, producing biofuel and burning it in an engine. As a result, emissions from sugarcane ethanol are up to 90% less than from conventional gasoline. Done well, biofuels can have a positive effect on the environment. However, this is dependent on responsible production--something BP is committed to. When the issue of rising land prices, brought about by increasing demand for fuel crops, raised the question of deforestation, New said: "I can assure everyone that we will not cut down an Amazonian tree while making biofuels for BP." He added that there is more than enough land in the world for us to feed ourselves and provide energy as long as unsustainable practices are avoided. Also, he said BP was the first oil company to devise a set of procurement guidelines to minimize risk of sourcing fuels from unsustainable plantations. The debate deepened understanding of a complex subject and, by encouraging internal debate, AE hopes its team can become knowledgeable advocates externally.

Horizon, Issue Seven 2008 Second Life

REPORT BY Dave Orman

`PYROMAN' PUTS ON A SHOW CARSON WORKER'S SPECTACULAR SKILL By day he's Leo Neuenswander, a shift-working, 24-year veteran of the machine shop at Carson refinery in southern California. Come 4 July or New Year's Eve, or any other night when fireworks light up the skies over the US west coast, he's `Pyroman'--a licensed, safety-conscious pyrotechnic professional, who has produced more than 200 firework shows during the past 10 years. From Coronado Bay in San Diego to the Queen Mary in Long Beach, Dodger Stadium in Los Angeles to Oxnard to the north, it's Pyroman who gets the call when there's the need for something spectacular--and safe. That's the best part of the story, since Pyroman and his team have been injury- and accident-free for all 10 years. It's because of his unwavering commitment to safety--nothing else would be acceptable in his line of work-- that 95% of the people who work with Neuenswander are Carson co-workers (the other 5% are usually family members of employees). He'll tell you there's a very good reason for that: "To do this kind of work," he says, "it's absolutely essential that you have intelligent people who take safety seriously. You need people who are confident handling explosives, people who understand the need for preparation, communication and teamwork. Aside from the explosives, of course, that's exactly what we're dealing with at Carson day in, day out." Neuenswander is particularly proud of what fire inspectors have had to say about his team's efforts. "We have impressed every fire inspector we've ever met," he explains, "including the Orange County fire department [OCFD]--perhaps the toughest of any of them." OCFD was on hand this past 4 July--Independence Day-- when Pyroman and friends staged a show in nearby Laguna Beach from a barge 300 metres (1,000 feet) offshore. "The customer wanted a fast-paced show and we delivered," says Leo. "After the show, he phoned me and said it was `epic'--the best he had ever seen. He also let us know he wanted us back next year." Pyroman's BP colleagues include Steve Binns, Rod Cramer, Mike Heimer, Steve Lawson, Adam Leonhardt, Louis Lizama, Mike Neuenswander and Jerry Sydow. Pyroman adds that he hasn't met a fire inspector yet who wasn't impressed by the team's knowledge and professionalism. And you can be sure he lets them all know about the team's affiliation with BP. If you have an unusual pastime, we'd love to hear about it. Please contact Horizon at [email protected]

Horizon, Issue Seven 2008 ENDGAME

HORIZON CROSSWORD

Across 1 10 11 12 15 16 17 18 19 20 22 24 26 27 ...... ....... Shaw (1856-1950) (6,7) A former kingdom of Germany (7) The former name Of Djakarta (7) A tree-dwelling ape (6) A tree-dwelling marsupial (6) See 7 down A port in Yemen (4) Adam and Eve's garden (4) Otalgia (7) Calliope was one (4) The capital of Azerbaijan (4) A warlike Roman 8 down? (7) Fruit-eating bird with a massive bill (6) `Say that ...... and wealth have missed me' (Leigh Hunt) (6) Jump named after a Swedish skater (7) Dry red Italian wine (7) Play by 1 across first performed in London in 1894 (4,3,3,3)

30 31 32

Down 2 3 4 5 6 7 8 9 13 14 15 21 23 24 25 Not easily disturbed or angered (7) It's on the Don (6) Sold his birthright to his brother (4) It flows through Dresden and Magdeburg (4) Mineral salt found in dried lakes (6) And 16 across Bible translation published1881-1895 (6,7) A producer of pithy sayings or short satirical poems (13) Indian-born British novelist (6,7) Somebody from Carson City or Reno perhaps? (7) Coarse grass with tough narrow leaves (7) Character in The Mikado (4-3) An extremely dirty and unpleasant state (7) The state capital of Georgia (7) Name shared by singers Johnny and Edith (6) American conductor James ......, born In 1943 (6)

Horizon, Issue Seven 2008

28 29 Wilfred ..... wrote Anthem For Doomed Youth (4) Short tail of a rabbit or deer (4)

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Editor's Letter

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