BP News - 2007

News summaries from company press releases and from unaffiliated news agencies are provided below. The summaries are sorted by month and are further categorized as upstream news, downstream news, and business/finance news.

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January

• Upstream news:

­- Overall BP production in 4Q'06 is expected to be around 3,820 mboed. Excluding volumes from TNK-BP operations, production in 4Q'06 is expected to be around 2,890 mboed, slightly higher than in 3Q'06. The recovery from the summer maintenance season (primarily in the North Sea and Alaska) and continued ramp up of new projects in Azerbaijan and North Africa is expected to be partly offset by weather related delays to Alaskan loadings, unusually low seasonal gas demand, OPEC quota restrictions, and reduced entitlements under Production Sharing Contracts. BP's net share of production from TNK-BP is expected to be approximately 930 mboed, versus 948 mboed in 3Q'06, with the reduction reflecting the impact of divestments. Relative to 3Q'06, the TNK-BP result is expected to be adversely affected by an incremental tax lag of around $300m, and the absence in 4Q'06 of the gain on divestment which amounted to around $0.9bn in 3Q'06. ­

- Venezuela will end negotiations with foreign oil companies over how it will take a majority control of their operations along the Orinoco River, the country's oil minister, Rafael Ramírez, said. Mr. Ramírez said that ''there's no possible negotiation'' with the foreign companies, but he said that private companies would be allowed to own minority stakes in lucrative oil projects in the Orinoco River basin. The government negotiated last year with the companies about its plans to take majority control of oil operations in the country, but no agreements were reached. In a speech to Congress last week, President Hugo Chávez said the private companies -- BP, Exxon Mobil, Chevron, ConocoPhillips, Total and Statoil -- would be given the option to stay on as minority partners. Mr. Chávez also announced plans to nationalize companies within Venezuela's telecommunications, electricity and natural gas industries. The government has already taken majority ownership of Venezuelan oil-producing operations outside the Orinoco region through joint ventures controlled by the state oil company. ­

- BP signed a major production-sharing agreement that will give the company access to two Middle East fields and associated accumulations that could yield resources of some 20 - 30 trillion cubic feet of natural gas. The agreement was signed by His Excellency Mohammed Bin Hamad Al Rumhi, Minister of Oil and Gas, Sultanate of Oman and Tony Hayward, BP's CEO for Exploration and Production and recently designated Group Chief Executive. The agreement covers an area of some 2,800 square kilometres in central Oman, including the Khazzan and Makarem gas fields which were discovered in 1993 but have remained undeveloped due to the complexity of their 'tight gas' reservoirs. ­

- BP announced that it will invest up to $2.4 billion over the next 13 years to increase its share of ultimate recovery of coalbed methane natural gas from the San Juan Basin of southwestern Colorado by an estimated 1.9 trillion cubic feet. The company anticipates a steady development program that will increase current BP net production of 425 million cubic feet per day by more than 20 percent, and maintain production above present levels for more than a decade. The project includes funding for the drilling of more than 700 new wells for which BP has obtained regulatory infill approval, and associated field facilities. To minimize environmental impact, BP plans to drill nearly all of the new wells from existing well pads, using existing roads and pipelines where possible. ­

- Sociedade Nacional de Combustíveis de Angola (Sonangol) and BP Exploration (Angola) Limited today announced the Terra oil discovery in ultra-deepwater Block 31, offshore Angola. Terra is the twelfth discovery that BP has drilled in Block 31. The well is located approximately 30 km NW of the recently announced Titania discovery. Terra was drilled by the Jack Ryan drill ship, in a water depth of 2,328 metres, some 411 kilometres northwest of Luanda and reached a total depth of 6,118m TVD below sea level. This is the third discovery in Block 31 where the exploration well has been drilled through salt to access the oil-bearing reservoir beneath. Well test results indicate anticipated flow capacity in excess of 5000 barrels a day under production conditions. ­

- BP Egypt announced that it has drilled a successful well, Giza North-1, in the North Alexandria concession held by BP, RWE Dea and EGPC/EGAS. The well encountered a significant gas accumulation as part of a large channel complex. It is estimated that the Giza complex contains more than 1 trillion cubic feet of gas and another well is planned to be drilled to further appraise the complex in April 2007.

• Downstream news:

- In the first apparent test of a beefed-up "anti-flaring" law, regional air regulators said they are investigating an incident at the ConocoPhillips refinery in Wilmington that sent flames shooting high into the air. The incident is one of half a dozen that have occurred this week, within days of an expanded ban on flaring by the South Coast Air Quality Management District. Three ConocoPhillips smokestack flares could be seen as far north as the Century Freeway and as far south as the Palos Verdes Peninsula. The tougher regulations ban open burn-off of excess gases from South Bay refineries except in emergencies or during planned shutdowns, start-ups or other "essential" operations. Violators can face fines of $1,000 or more. Emissions from such events are also supposed to be cut sharply in coming years. Four events were planned. The other unplanned event, which was at a BP facility, is also being investigated, said South Coast AQMD spokesman Sam Atwood. Few other details were immediately available. ConocoPhillips spokesman Andy Perez said Friday that the flaring at the refinery at 1400 W. Anaheim St. was not an emergency but a safety precaution after workers noticed that a key piece of equipment that boils oil was malfunctioning. Sulfur oxide emissions from flaring contribute to fine particulate pollution, or soot, which has been linked to increased hospital admissions and premature deaths from respiratory and heart problems. Low levels of sulfur oxide can also exacerbate asthma symptoms. ­

- BP Alternative Energy North America Inc. announced that it expects to begin construction on five wind power generation projects in the US in 2007. Located in four states – California, Colorado, North Dakota and Texas – the projects are expected to deliver a combined generation capacity of some 550 megawatts (MW). When complete, the projects will exceed the company’s previously announced target to build 450 MW by end of 2008. ­

- BP, under pressure because of a refinery explosion that killed 15 workers, suffered from systemic safety failures, according to a report by a committee headed by former Secretary of State James A. Baker III. The Baker panel found fault with the handling of safety issues by upper management at London-based BP, including top executives, said a person who has seen the report and asked not to be named because it is not yet public. The committee was set up after a March 2005 blast at BP's Texas City, Texas, plant. The report may bolster the view of lawyers who are suing on behalf of those killed or injured in Texas City. They have argued that more senior BP executives should shoulder the blame for the safety failings. BP spokesman Neil Chapman said he would have no comment on the Baker report before its formal publication in Houston. In addition to the Texas City tragedy, BP last year shut part of the Prudhoe Bay oil field in Alaska after a spill, and it delayed the start of its Thunder Horse oil platform in the Gulf of Mexico. The company has also been accused by U.S. regulators of trying to manipulate fuel markets. The Baker report also said executives relied too much on safety statistics from the U.S. refineries. It makes recommendations for improvements, including putting an outside body in charge of monitoring safety at the BP plants, said the person who has seen the report. BP has taken responsibility for the Texas City accident and set aside $1.6 billion to compensate victims. The refinery was closed for months after Hurricane Rita in September 2005 as the company made improvements to boost safety. The U.S. Chemical Safety Board, which recommended in August 2005 that the independent review committee be established by BP, concluded in October that BP knew about safety lapses at Texas City years before the explosion and failed to act. BP tapped Baker in October to run the safety review. BP has five major refineries in the country: Texas City; Carson; Whiting, Ind.; Cherry Point, Wash.; and Toledo, Ohio. The plants can process a total of almost 1.5 million barrels of oil a day, according to the U.S. Energy Information Agency. That's equal to about 9% of total U.S. refinery capacity. Texas City is BP's largest U.S. refinery and the country's third largest, with a capacity of 437,000 barrels a day. ­

- BP p.l.c. will implement the recommendations made by an independent safety review panel as part of the company’s continuing effort to improve its safety culture and to strengthen and standardize process safety management at BP’s five U.S. refineries. BP already has taken a number of actions which align with the recommendations of the BP US Refineries Independent Safety Review Panel and will, after a more thorough review, develop plans for additional action at its U.S. refineries and for applying lessons learned elsewhere. In a report made public today, the Panel identified material deficiencies in process safety performance at BP’s U.S. refineries and called on BP to give process safety the same priority BP has historically given personal safety and environmental performance. The Panel made recommendations for improving BP’s process safety leadership, systems, expertise and oversight of process safety performance. ­

- An investigation led by former Secretary of State James A. Baker III has concluded that weak leadership at BP and a lack of attention to effective safety helped create a dangerous setting that led to 15 deaths at the oil giant's Texas refinery, according to the report released. ­

- BP announced that the first cargo of Forties blend containing crude from the Buzzard oil field has been exported from Hound Point terminal on the Firth of Forth. After the start up of Buzzard the first crude from the field entered the Forties Pipeline System on 14 January. Buzzard is the latest entrant to the Forties Pipeline System which now transports oil from over fifty fields. The Forties Pipeline System is owned by BP and commences at the Forties Charlie platform with the landfall at Cruden Bay, Aberdeenshire. The pipeline then continues to the processing terminal at Kinneil, adjacent to the Ineos-operated Grangemouth complex in central Scotland. Crude oil is shipped from the Hound Point terminal on the Firth of Forth. ­

- Royal Dutch Shell said that it would sell its Los Angeles refinery and related assets to the Tesoro Corporation. Other major oil companies, including BP and Chevron, are also shedding refineries, a move that analysts interpret as a sign they think the “golden age of refining” of the last two years is coming to an end.

• Business/Finance news:

- BP is to launch a major Carbon Challenge education programme for schools in September 2007. This new education programme under the themes of carbon footprint and climate change is for 14 to 16 year olds across the UK. The main subjects for the BP Carbon Challenge are Science, Mathematics and Enterprise, with activities linked to the relevant UK education curricula and guidelines. ­

- BP announced that after more than a decade in the CEO role Lord Browne has decided to retire as chief executive at the end of July 2007. The board is pleased to announce that Tony Hayward, currently BP’s head of exploration and production, will succeed Lord Browne following his retirement as group chief executive. ­

- The beleaguered energy giant BP unexpectedly named a successor for its chief executive, John Browne, and said Mr. Browne would step down more than a year earlier than expected. ­

- BP's chief executive is stepping down by the end of July — more than a year ahead of schedule — after a series of high-profile problems including a deadly refinery blast in Texas and a giant oil spill in Alaska tarnished the image of one of the world's largest oil companies. Browne joined the company in 1966 and worked his way up, taking the top job in 1995. He oversaw BP's expansion in the United States, which involved a number of takeovers, including the 1998 purchase of Amoco and the subsequent acquisitions of Arco and Castrol. During Browne's tenure as CEO, BP said, the company saw a fivefold increase in its market capitalization to $202.7 billion. Browne's attempts to fashion BP as environmentally friendly — he was the first major oil company CEO to acknowledge global warming and masterminded BP's logo change from a shield to a flowerlike sunburst with the slogan "Beyond Petroleum" — were undermined by the company's recent U.S. troubles. BP was forced to temporarily close some of its operations at the Prudhoe Bay oil field in Alaska because of a major pipeline spill in August. The 2005 explosion at its Texas refinery that killed 15 workers has so far cost the company about $2 billion in compensation payouts, repairs and lost profit. ­

- Is the oil and gas giant BP that John Browne built fundamentally flawed? That is the question that analysts and investors are starting to ask as they re-examine BP and the legacy of Mr. Browne, who announced that he was stepping down sooner than expected. ­

- Oil companies embraced Gov. Arnold Schwarzenegger's new executive order to fight global warming by boosting the consumption of alternative fuels and cutting carbon emissions from car and truck exhausts by 10% over the next 13 years. The order is a key component of last year's global warming law, which seeks to reduce emissions of carbon and other greenhouse gases by 25% by 2020. Environmental activists continue to strongly support the initiative. But the enthusiasm for the governor's action by the oil industry is in sharp contrast to its groans about last year's landmark legislation. Schwarzenegger unveiled his fuel standard proposal during last week's annual State of the State speech. He said then and now that California must become a leader in combating global warming to fill a void created by the inaction of the administration of President Bush. Schwarzenegger predicted that his initiative would put more than 7 million alternative or hybrid vehicles on California roads by 2020, reducing the demand for gasoline and diesel fuel by 3.2-billion gallons a year. Oil companies, which opposed last year's global warming law, now say they're happy to be on the governor's team. They say they like Schwarzenegger's market-friendly approach of allowing petroleum refiners and companies that develop clean alternative fuels to compete for the motoring public's business. They also are enthusiastic at being able to buy and sell credits that would be earned by exceeding state requirements for reducing the carbon content of fuels. BP markets gasoline in California under the Arco brand. Electricity generators, meanwhile, also said they're eager to compete in the vehicle fueling business. ­

- Ten major companies, with operations in utilities, manufacturing, petroleum, chemicals and financial services, have joined with leading environmental groups to limit nationwide carbon dioxide emissions; coalition, including industry giants like General Electric, DuPont and Alcoa, aims to reduce emission by 10 to 30 percent over next 15 years; diversity of group could send powerful message that industries are committed to federal emissions controls amid political pressure to make changes. ­

- targetneutral, the UK’s first mainstream scheme to “neutralise” CO2 emissions caused by driving, has been voted Innovation of the Year by the readers of BusinessCar Magazine. targetneutral is being presented with the accolade at an exclusive ceremony for the fleet industry’s top executives. ­

- The cost of neutralising the CO2 emissions caused by driving a typical 4x4* is less than £25 a year, according to the UK’s leading carbon offsetting scheme for car drivers. Drivers of 4x4 cars face increased parking bills, congestion charges and other high-emission penalties. But offsetting a 4x4’s CO2 emissions for a year through the online targetneutral.com scheme (available at www.targetneutral.com) costs from just £16.71 for a Land Rover Discovery to £24.69 for a BMW X5*.

February

• Upstream news: ­

- Venezuelan President Hugo Chavez set a May 1 deadline for the world's biggest oil companies to surrender control of multibillion-dollar crude oil projects, accelerating his raft of nationalizations. Oil Minister Rafael Ramirez said the state would seize the Orinico Belt fields if the deadline was missed, threatening U.S. companies such as Chevron Corp., Exxon Mobil Corp. and ConocoPhillips, British firm BP and Norway's Statoil. In Washington, the White House said it hoped that U.S. companies would be treated in accordance with international regulations. ­

- BP Exploration (Alaska) Inc. successfully drilled a research well on the North Slope in partnership with the U.S. Department of Energy and the U.S. Geological Survey to collect samples and gather knowledge about gas hydrate, a potential long-term unconventional gas energy resource. The stratigraphic test well enabled BP and the Department of Energy to gather core, log, reservoir performance and fluid data from an ice pad location at Milne Point. The drilling began Feb 3. Field teams began pulling hydrate core samples on Feb. 10. Extensive well logging and wireline formation testing was completed between Feb. 14-18.

• Downstream news:

- BP announced that it has agreed to sell, subject to required regulatory approvals, its Coryton Refinery in Essex, UK, to Petroplus Holdings AG, a leading independent refiner and wholesaler of petroleum products headquartered in Zug, Switzerland. The sale price of $1.4 billion - plus hydrocarbons to be valued at closing - includes the adjacent bulk terminal and BP's UK bitumen business which is closely integrated with the refinery. BP and Petroplus have also entered into a long term supply agreement which will provide BP's UK based retail and other businesses with the products they require. ­

- A device designed to clean waxy buildup from the walls of the 800-mile Alaska pipeline broke apart inside the pipeline in December, raising the possibility that any remaining shards of machinery might damage sensitive valves, an executive of Alyeska, the company that runs the pipeline, confirmed. ­

- The nation's first certifiably green gasoline station sports a futuristic metal canopy covered in shiny triangles of uncoated, recyclable stainless steel. The rooftop holds 90 solar panels and a collection system that gathers rainfall to irrigate drought-tolerant plants nearby. The underside is outfitted with low-energy lighting. Cars will roll across concrete mixed with bits of recycled glass. At a time when oil companies are feeling the heat from lawmakers and motorists worried about global warming and high fuel prices, British oil giant BP plans to open what it calls "a little better gas station" — albeit one that will sell the same hydrocarbon-based fuels blamed for worsening air pollution and climate change. Dubbed Helios House by BP, the eco-friendly station at the corner of Robertson and Olympic boulevards replaces a slightly run-down Thrifty station that served customers from Los Angeles and nearby Beverly Hills. The new gas station was built with cutting-edge earth-friendly design, using such materials as farmed wood and less-polluting paint, and its customers will be pushed to save energy. While its customers pump gas — a three-minute task, on average — BP will show eco-vignettes and green videos on screens built into the fuel dispensers. The oil company is considering adding biodiesel and alternative fuels to the site, as well as selling carbon offsets to customers who want to make up for their fuel use. BP's new green gas station is an extension of the company's "Beyond Petroleum" marketing campaign that has highlighted the oil company's investments in solar and other forms of alternative energy. BP, one of the world's largest solar panel manufacturers, this month contributed $500 million toward alternative-fuel research through a venture led by UC Berkeley. Helios House is set to win certification this week as the nation's 735th building — and first gasoline station — to be certified as green by the U.S. Green Building Council, a Washington-based nonprofit, council spokeswoman Taryn Holowka said. ­

- The energy giant BP has settled two more lawsuits stemming from a 2005 explosion at its Texas City oil refinery that killed 15 people and injured more than 170, the company and a lawyer for two injured contract workers said. Terms of the deal were not released. Jury selection had been set for next week over lawsuits filed by the workers, E. J. Godeaux and Clarence Kinard. Theirs would have been the first cases connected to the blast to go to court. Mr. Godeaux, 61, a painter and sandblaster from Texas City, had neck and back injuries, and his right eardrum was blown out. Mr. Kinard, 67, a boilermaker from Cleveland, Tex., injured his back and experienced hearing loss.

• Business/Finance news: ­

- The board of BP p.l.c. announced that it has appointed Andy Inglis as a managing director of the BP Group. He also succeeds Tony Hayward as chief executive of BP's Exploration & Production (E&P) business. Both appointments are with immediate effect. ­

- BP announced it has selected the University of California Berkeley and its partners the University of Illinois, Urbana-Champaign and the Lawrence Berkeley National Laboratory to join in a $500 million research program that will explore how bioscience can be used to increase energy production and reduce the impact of energy consumption on the environment. The Energy Biosciences Institute will perform ground-breaking research aimed at the production of new and cleaner energy, initially focusing on renewable biofuels for road transport. The EBI will also pursue bioscience-based research in three other key areas; the conversion of heavy hydrocarbons to clean fuels, improved recovery from existing oil and gas reservoirs, and carbon sequestration. ­

- Oil giant BP will give $500 million to a partnership led by UC Berkeley to develop new biofuels and reduce environmental harm caused by the use of fossil fuels, Gov. Arnold Schwarzenegger and company officials announced. UC Berkeley will team up with the University of Illinois at Urbana-Champaign and the Lawrence Berkeley National Laboratory to develop fuel from plants, improve the extraction of oil from existing reserves and find ways to keep carbon from entering the atmosphere. University and oil company officials said the creation of the Energy Biosciences Institute is an unprecedented effort to find clean, sustainable sources of energy and reduce the emission of greenhouse gases that cause global warming. BP, formerly known as British Petroleum, has agreed to provide $50 million a year for 10 years to the institute, an unusual partnership between the universities, the oil company and state and federal governments. As many as 50 BP employees will work at the two campuses. Much of what the institute develops will be made available to the public, but BP will retain exclusive control over certain discoveries, said Robert C. Dynes, president of the University of California system. The institute will be governed by a board that will include university and oil company officials. ­

- Fourth quarter results: • BP's fourth quarter replacement cost profit was $3,895 million, compared with $4,432 million a year ago, a decrease of 12%. For the year, replacement cost profit was $22,253 million compared with $19,314 million, up 15%. • The fourth quarter result included a net non-operating charge of $152 million compared with a net nonoperating charge of $553 million in the fourth quarter of 2005. For the year, the net non-operating gain was $1,062 million compared with a net non-operating charge of $1,754 million for 2005. • Compared with a year ago, the fourth quarter trading environment reflected higher oil realizations, lower refining and retail marketing margins and lower gas realizations. • Net cash provided by operating activities for the quarter and year was $5.0 billion and $28.2 billion, respectively, compared with $4.2 billion and $26.7 billion a year ago. • The ratio of net debt to net debt plus equity was 20%. • The quarterly dividend, to be paid in March, is 10.325 cents per share ($0.6195 per ADS) compared with 9.375 cents per share a year ago. For the year, the dividend showed an increase of 10%. In sterling terms, the quarterly dividend is 5.258 pence per share, compared with 5.288 pence per share a year ago; for the year the increase was 6%. During the year, the company repurchased 1,334 million of its own shares, representing 6.5% of the end 2005 outstanding shares net of treasury shares, at a cost of $15.5 billion. ­

- Oil giant BP reported its lowest profit in two years because of falling energy prices and declining production, and it said output would probably drop again in 2007. Fourth-quarter net income declined 22% to $2.88 billion, or 15 cents a share, from $3.69 billion, or 18 cents, a year earlier, London-based BP said. Its U.S.-traded shares fell 54 cents to $63.25 as the company said further delays at the Atlantis and Thunder Horse rigs in the Gulf of Mexico would crimp output this year and next. The drop in production was the first since Chief Executive Lord John Browne spent $100 billion buying Chicago-based Amoco Corp. in 1998 and Los Angeles-based Atlantic Richfield Co. in 2000 and was caused by lost output from Alaska and delays at the two gulf rigs. Its profit also was lower than at BP's bigger competitors, Royal Dutch Shell and Exxon Mobil Corp. For the entire year, BP's earnings rose 15% to $22.3 billion because of higher energy prices in 2006 compared with 2005. ­

- BP reports fourth-quarter profit fell 22 percent to two-year low, driven down by declining price of oil and increased safety spending; adjusted net profit dropped to $2.88 billion, from $3.69 billion year earlier; revenue fell 1.6 percent, to $62.8 billion. ­

- A FREE environmental health check for petrol cars has been launched this month. targetneutral, the UK’s first mainstream scheme to “neutralise” CO2 emissions caused by driving, has teamed up with automotive experts Kwik-Fit to create the environmental ‘car surgeries’ – a first in Britain. targetneutral is a voluntary, non-profit making partnership initiative from BP. As well as offering the opportunity for petrol motorists to offset CO2 emissions from their cars, the targetneutral scheme encourages drivers to follow the Reduce, Replace, Neutralise philosophy.

March

• Upstream news: ­

- Venezuela said it had reached a $250-million deal to compensate Total and BP for an oil field it seized from them in April, but said it would not make the compensation in cash. Speaking at the signing of the deal, Energy Minister Rafael Ramirez pegged the compensation slightly lower than the $262 million that a government official had given earlier. Venezuela seized the Jusepin field after the companies failed to agree to terms under which the field would be operated as a "mixed company," with state oil company PDVSA holding a majority stake. ­

- BP said it had agreed to buy Chevron Corp.'s Netherlands manufacturing company, Texaco Raffinaderij Pernis, for about $900 million, excluding working capital and hydrocarbon inventory. BP will acquire Chevron's 31% stake in Netherlands Refining Co., or Nerefco, Chevron's stake in the jointly owned wind farm at the refinery and a stake in the nearby crude oil terminal and storage facility and a number of associated pipelines.

­- BP said it had agreed to buy Chevron Corp.'s Netherlands manufacturing company, Texaco Raffinaderij Pernis, for about $900 million, excluding working capital and hydrocarbon inventory. BP will acquire Chevron's 31% stake in Netherlands Refining Co., or Nerefco, Chevron's stake in the jointly owned wind farm at the refinery and a stake in the nearby crude oil terminal and storage facility and a number of associated pipelines. ­

- Angola, which shared the stage with the world’s most powerful oil-producing nations at its first OPEC meeting, is an unlikely candidate to be the darling of the global oil industry. A corrupt, underdeveloped and war-scarred country, Angola is one of the poorest lands on earth. But ask any energy executive these days and another picture emerges: a place of immense riches, solicitous of foreign investors and among the three fastest-growing oil exporters in the world today. In the capital, Luanda, hotel rooms cost more than $200 a night and are booked two months in advance by the oil companies; three times a week, nonstop charter flights known as the Houston Express ferry workers to and from Texas; offshore, dozens of oil fields have been discovered and given names like Cola and Canela. Exxon Mobil, Chevron, BP and others have poured billions into Angola in the last decade to unlock petroleum resources in the country’s deep waters, where the vast majority of the oil is, and the payoffs are finally coming in. In recent years, Angola has become the fastest-growing source of oil exports to the United States and, along with Nigeria and smaller West African countries, it is about to become an important component of American energy security. Within three years, producing nations in western Africa will account for one of every three new barrels pumped worldwide. By 2015, the United States is projected to import a quarter of its oil from Africa, up from 15 percent today. Angola’s promise stems from a series of big discoveries some 100 miles offshore, which have increased the country’s oil production tenfold since the mid-1970s, to 1.5 million barrels a day in 2006. Next year, Angola is expected to reach two million barrels daily and by 2011, 2.6 million barrels, the equivalent of Kuwait’s output. But Angola is finding itself at the crossroads of today’s energy geopolitics. It has become the latest stage in a global rivalry playing out among Western, Russian and Chinese oil companies. This year, it joined the Organization of the Petroleum Exporting Countries, which has been paring global supplies to keep prices from falling below $50 a barrel. China has identified this country as a promising source in its rush for energy resources, providing billions in loans and development aid in return for favorable treatment of its oil interests. Last year, Angola overtook Saudi Arabia as the largest oil supplier to the Chinese. It is currently the sixth-biggest exporter to the United States. The Angolan government seems emboldened by its new status as a member of the small club of big oil producers. The decision to join OPEC baffled energy analysts because it implied that Angola might have to slow its growth just when it seemed to be hitting the jackpot in oil. Energy companies have big stakes in the notion that Angola, which is nearly twice the area of Texas, may be one of the last large untapped regions of the world. Eni of Italy bid a startling $902 million last year to secure the rights to drill offshore, then the highest fee ever paid by an oil company. After the Eni bid, Sinopec, a Chinese state-owned company, and Sonangol jointly offered $2.2 billion for two other offshore blocks. While oil companies talk at length about how welcoming the government is to foreign investors, they are much more circumspect when it comes to the country’s lack of transparency or its history of corruption. ­

- BP said that it planned to bid against the state-owned oil giant Rosneft in a bankruptcy auction for assets of the Yukos oil company, a surprise announcement that signaled BP’s deepening involvement in Russia’s turbulent energy sector. BP owns about $1 billion in stock in Rosneft, a company it considers a strategic partner. On Friday, BP’s chief executive, John Browne, was in Moscow to meet his counterpart from Rosneft and Russia’s president, Vladimir V. Putin, along with BP’s designated successor for the top job, Tony Hayward. With the offer, BP is entering an auction process in a country with a history of troubled asset sales in such proceedings, beginning with the 1990s privatization auctions that are now widely thought to have been rigged. Also, BP’s willingness to wade into the legal and political morass of the Yukos affair suggests the lengths Western oil companies will go to win access to scarce reserves, analysts said. In Russia, this has meant risking legal repercussions from working with state companies accused of nationalizing private assets. BP is bidding in the auction through a subsidiary of its Russian joint venture, TNK-BP, which is half-owned by Russian partners. Yukos was declared bankrupt last August after Russian tax authorities pressed billions of dollars in claims that critics say were trumped up. The company’s former chairman, Mikhail B. Khodorkovsky, is serving eight years for tax evasion and fraud. TNK-BP will bid for 9.44 percent of Rosneft’s stock — worth about $9 billion at today’s market prices — that is owned by Yukos. The starting bid, however, is $7.5 billion. For the auction to meet Russian bankruptcy rules, at least two bidders must participate. Until Friday, only the Rosneft subsidiary had formally expressed interest and deposited $1.5 billion in an escrow account. A TNK-BP spokeswoman, Marina Dracheva, insisted her company would bid competitively. Ms. Dracheva said TNK-BP was interested in Rosneft stock to deepen its strategic relationship with the company. Still, some analysts speculated that TNK-BP had leant its name to the process to allow the auction to proceed in exchange for favorable treatment in other energy deals in Russia. TNK-BP, for example, is struggling to hold onto a large natural gas development in Siberia after the Kremlin threatened to revoke the license because the field was not developed quickly enough. That threat was not taken lightly; in December, the Kremlin pressured Royal Dutch Shell over environmental issues until Shell sold a controlling stake in its Sakhalin II offshore Siberian oil and gas development to Gazprom at a steep discount. On Friday, the same day TNK-BP announced the offer, Mr. Browne of BP was in Moscow for his second visit in three weeks, prompting some criticism from former Yukos management. Claire Davidson, a spokeswoman representing the overseas management of Yukos, said the meeting between the chief executives of Rosneft and BP — the only two bidders — so close to the auction date could create the appearance of collusion. BP and Rosneft spokesmen declined to elaborate on what the pair discussed.

• Downstream news: ­

- BP announced that it has agreed to purchase Chevron’s Netherlands manufacturing company, Texaco Raffinaderij Pernis B.V., for around $900 million, excluding working capital and hydrocarbon inventory. As a result of the deal, BP will acquire Chevron’s 31 per cent minority shareholding in the Netherlands Refining Company (Nerefco), Chevron’s stake in the jointly owned wind farm located at the refinery and their shareholdings in the nearby TEAM crude oil terminal and storage facility and a number of associated pipelines. On completion of the transaction, which is expected during the first half of the year subject to the required regulatory approvals, Nerefco Refinery, which is located in Europoort, Rotterdam, will become a 100 per cent BP owned asset. ­

- BP said it had agreed to buy Chevron’s manufacturing company in the Netherlands, Texaco Raffinaderij Pernis, for about $900 million, excluding working capital and hydrocarbon inventory. BP will acquire Chevron’s 31 percent minority shareholding in the Netherlands Refining Company as well as Chevron’s stake in the jointly owned wind farm located at the refinery; shareholdings in the nearby crude oil terminal and storage facility; and a number of associated pipelines. The deal, which is expected to be completed during the first half of the year, would make the refinery a 100 percent BP- owned asset.

­- BP announced its intention to sell its ethyl acetate (ETAC) and vinyl acetate monomer (VAM) manufacturing units at Saltend, near Hull, UK, and the associated commercial businesses. The decision follows a review which concluded that the Saltend site would focus on its existing acetic acid and acetic anhydride businesses. In addition, BP is proposing to relocate all commercial roles in the European region of its acetyls business from its offices in Sunbury-on-Thames, Middlesex to the Saltend site. The proposed move is expected to create more than 30 commercial roles at the Saltend Site which is the largest producer of acetic acid in Europe. ­

- Oil giant BP has stepped in to try and help solve the petrol contamination mystery. Market leader BP has not been affected by the issue, but has today approached the Trading Standards Institute offering to put its world leading research and development facilities behind the investigation. BP’s scientists are on standby to work across the weekend, depending on the response from investigators. ­

- BP accepted responsibility for the March 23, 2005 explosion and fire at the Texas City refinery: We have apologized to those harmed. While we cannot change the past or repair all the damage this incident caused, we have worked diligently to provide fair compensation, without the need for lengthy court proceedings, to those who were injured and to the families of those who died. On the recommendation of the U.S. Chemical Safety and Hazard Investigation Board (CSB), we created an Independent Panel, led by Former U.S. Secretary of State James A. Baker, III to assess process safety management and safety culture at our US refineries. The Independent Panel undertook extensive investigations, and issued their report in January of this year. BP is implementing the recommendations in full. We have completed and made public the results of our own investigation of the incident and, as CSB Chairman Merritt has publicly recognized, BP cooperated in an unprecedented way with the CSB investigation. BP voluntarily produced to CSB over 6,300,000 pages of documents, made over 300 witnesses available for CSB interviews, including some of its most senior executives and, importantly, agreed to form the Independent Panel. Notwithstanding the Company’s strong disagreement with some of the content of the CSB report, particularly many of the findings and conclusions, BP will give full and careful consideration to CSB’s recommendations, in conjunction with the many activities already underway to improve process safety management. BP and its employees are ready, willing and able to achieve the goal of becoming an industry leader in process safety management. ­

- At the inauguration of a new 36MW solar photovoltaic (PV) production line, the board of Tata BP Solar confirmed that this represents another step towards realizing the designed potential of the 300MW plant. The new production line has seen Tata BP Solar more than double its cell manufacturing capacity to reach some 50MW per annum. The next phase of the expansion will see an additional 128MW of cell manufacturing capacity added during 2007-8. As well as the cell manufacturing capacity increase, the Tata BP Solar board has also approved investment which will double the facility’s module manufacturing capacity from 45MW to 85MW by end 2007. ­

- BP Solar announced that it has begun constructing a mega cell plant at its European headquarters in Tres Cantos, Madrid. For phase 1 of the Madrid expansion, BP Solar is aiming to expand its annual cell capacity from 55 MW to around 300 MW. This follows the announcement on 21st March of the construction of a similar facility in Bangalore, India. The new cell lines use state-of-the-art screen printing technology, much of it proprietary to BP Solar. By fully automating wafer handling, the lines will be able to handle the very thinnest of wafers available and ensuring the highest possible quality. ­

- Refineries in California and across the country are breaking down with unusual frequency this year, boosting prices at the pump and endangering workers and communities. The rash of oil plant problems may not be a coincidence. The breakdowns stem from the hard use of aging equipment, a shortage of trained workers, corporate cost cutting and ownership changes, refinery experts say. In the first six weeks of 2007, there were 43 incidents involving pipeline leaks, chemical releases, plant breakdowns and fires, more than has been typical, Kim Nibarger, a safety expert for the United Steelworkers Union, told Congress during a Thursday hearing on refinery safety. Several of the accidents — including two in California — left employees injured. The California incidents, coupled with an abnormal number of maintenance projects and mishaps, recently pushed the average per-gallon cost of gasoline past $3 for the first time in six months. The California plants may share some of the same stresses that were at play two years ago, when an explosion and fire at a BP refinery in Texas killed 15 and injured 180. That incident was the nation's worst workplace accident since 1990, triggering regulatory and criminal investigations as well as Thursday's hearing before the House Education and Labor Committee. The U.S. Chemical Safety Board, an independent federal agency, released its report on the March 23, 2005, tragedy in Texas City, concluding that "organizational and safety deficiencies at all levels of BP caused this terrible accident," according to board Chairwoman Carolyn Merritt. The oil giant cut training, maintenance and staffing budgets, ignored safety recommendations stemming from other fatal accidents, failed to invest in refinery improvements and allowed unsafe practices to persist, the report said. The board also criticized the Occupational Safety and Health Administration's inspection record at the BP plant and elsewhere. BP has taken responsibility for the accident but has disputed some of the board's findings, particularly the notion that funding cuts played a role in the incident. BP said it was making widespread changes and was "committed to preventing such a tragedy from occurring again." Rep. George Miller (D-Martinez), the committee chairman, told reporters after the hearing that he would write legislation to improve refinery worker safety. BP, based in London, operates five U.S. refineries, including a large fuel-making operation in Carson. Affixed to one of the plant's units is a giant American flag that is visible from the 405 freeway. BP also operates Arco stations on the West Coast. An independent-panel report commissioned by BP that was released in January concluded that "BP's Carson refinery appears to have a generally positive, trusting and open environment with effective lines of communication between management and the workforce," retired Admiral Frank Bowman, a member of the study group, testified Thursday. He added, however, that the panel found "apparent complacency toward serious process safety risks at each refinery." BP's Carson plant was the site of a small fire last week that was quickly contained without injury. The incident nonetheless triggered a jump in the Los Angeles wholesale price of regular gasoline, reflecting market worries about supplies. An unusually active maintenance schedule at many of California's 14 fuel-making plants over the last few months left the state vulnerable to outages and the resulting price surge. Mishaps further strained fuel production and left inventories low, said Claudia Chandler, the California Energy Commission's assistant executive director. The agency was concerned enough to ask Valero Energy Corp. to postpone a project that would have cut gasoline production at its Wilmington refinery beginning in mid-April. The Valero facility produces about 14% of Southern California's gasoline. Valero, based in San Antonio, has suffered several refinery mishaps in recent months. The most serious came in mid-February, when an explosion and fire ripped through the company's McKee refinery in West Texas, injuring 19 people. Some injuries also have occurred at California refineries. A recent fire at Chevron Corp.'s Richmond refinery extended the plant's down time by a month. It also injured one employee and led to a precautionary evacuation of nearby neighborhoods. And in early February, a fire at Shell Oil Co.'s Wilmington plant sent four workers to the hospital, one with critical burns. Despite those incidents, an official with California's Division of Occupational Safety and Health praised the safety record of refineries in the state, which he described as substantially better than that of plants in states that don't conduct their own safety inspections. ­

- WHAT may soon be certified as the nation's first green gas station opened last month at a busy intersection here on the border with Beverly Hills. It's the station itself that's considered green; the unleaded gasoline it sells is not. ­

- An explosion and a fire that killed 15 contractors and injured 180 other workers at the giant BP oil refinery in Texas City two years ago was caused by company deficiencies “at all levels,” a federal safety panel reported on Tuesday. Ending its investigation of the disaster, which sent 43,000 people fleeing to indoor shelters and resulted in more than $1.5 billion in financial losses, the Chemical Safety and Hazard Investigation Board found that safety measures at the plant repeatedly fell victim to cost cutting — even after 23 accidental deaths at the plant in the 30 years before the explosion on March 23, 2005. At a news conference, Carolyn W. Merritt, the safety board’s chairwoman and chief executive, called the accident avoidable and “the inevitable result of a series of actions by the company.” “They cut costs that affected maintenance and safety,” Ms. Merritt said. “They ignored the implications of previous accidents that were red warning flags. There was a broken safety culture at BP.” The Justice Department is conducting a separate criminal investigation, said a lawyer representing victims, who said he had shared information from nearly 7 million company documents and 150,000 pages of depositions with federal prosecutors and investigators. The lawyer, Brent Coon of Beaumont, is to appear in Washington at a hearing on the explosion before the House Education and Labor Committee with a client, Eva Rowe, whose parents were killed in the blast. Ms. Merritt said the safety board had provided an advance copy of its findings to the Justice Department. The report, 335 pages plus supporting documents, traced the immediate cause of the explosion, the nation’s deadliest industrial accident since 1990, to high-risk startup operations after a maintenance shutdown of an octane processing tower. Because of a broken gauge, volatile hydrocarbons overflowed the tower and a connecting treatment drum. The drum was of an “antiquated and unsafe design” dating from the 1950s and lacked a flare system to burn off flammable vapors, which escaped into the air and were ignited by the backfire of a truck idling 25 feet away. The explosion obliterated 13 employee trailers and damaged 27 others as far as 1,000 feet away. The plant, the third-largest refinery in the United States with a capacity of about 10 million gallons a day or 2.5 percent of the gasoline sold daily nationwide, employed 1,800 workers and 800 contractors on a 1,200-acre site about 30 miles southeast of Houston. In a statement on Tuesday, BP said it “accepted responsibility” for the accident and apologized to the victims. The company has settled millions of dollars in claims and estimated that it would invest $1 billion to improve the plant over the next five years. Despite its “strong disagreement with some of the content of the C.S.B. report,” the statement said, BP “will give full and careful consideration” to the recommendations. The chemical safety board also criticized the federal Occupational Safety and Health Administration, saying it had failed to follow up earlier accidents at the plant and refused to share information with the board. Edwin G. Foulke Jr., assistant secretary of labor for OSHA, did not respond to the board’s complaints but said in a statement that the agency had fined BP a record $21 million after the explosion and was enacting a program “to ensure that every refinery under its jurisdiction is inspected and all employees are protected.” The five-member safety board scheduled a public meeting with Texas City residents on Tuesday evening, after which it planned to vote on adopting the report. Before and after BP’s 1999 merger with Amoco, the previous plant owner, cost cutting left the refinery particularly “vulnerable to a catastrophe,” the report said. BP instituted further budget cuts of 25 percent in 1999 and another 25 percent in 2005 “even though much of the refinery’s infrastructure was process equipment in disrepair.” In 2004, three workers were critically burned, two of them fatally, and just months after the 2005 explosion two accidents caused $32 million in property damage. BP, which financed an earlier inquiry by a panel headed by James A. Baker III, a former secretary of state, has denied that budget cuts played any part in the accidents. But the safety board released company documents reflecting internal concerns over cost cutting, including a 2003 health and safety audit of the Texas City plant by BP managers from other facilities citing a “checkbook mentality” that shortchanged efforts to address risks. The board also found that four operators on the equipment that exploded in Texas City were fatigued from working at least 29 straight days of 12-hour shifts. It further cited a 2004 safety assessment of the Texas City plant by consultants from the Telos Group who said, “We have never seen an organization with such a history of leadership changes over such short period of time.” The consultants found “little organizational stability” and said they had never seen such “intensity of worry” about a catastrophe “by those closest to the valve.”

• Business/Finance news: ­

- Since the first Earth Day almost 37 years ago, U.S. companies have been eager to trumpet their environmental good deeds, even when they were more about public relations than clean air or water. But increasingly, corporate America is going green in new, serious and costly ways. After years of being prodded — and in some cases punished — by protesters, lawmakers, regulators and, now, even Wall Street, businesses are looking beyond the bottom line. And it's not happening just in California, the Northwest and other ecologically minded areas. In Texas, a group of private investors last week agreed to pay about $32 billion for the largest utility in the state. The private equity firms pledged to back U.S. legislation on global warming and to build no more than three of 11 planned coal-fired power plants. Texas Pacific Group and Kohlberg Kravis Roberts & Co. announced that they were buying Texas' TXU Corp. in a deal that included commitments to scrap most of the coal-fired power plants planned by TXU. Environmentalists, who sat at the table during part of the negotiations, also won a promise from investors to double investments in wind power and other sources of alternative energy. The agreement is the latest sign that corporations and environmentalists can do business together, said Denis Hayes, the coordinator of the first Earth Day in 1970. Chevron Corp., BP and other oil companies are spending billions of dollars to develop alternatives to petroleum-based fuels. Farmers are turning fields of corn into ethanol used to run cars and trucks. California and, increasingly, its neighbors are continuing that kind of environmental leadership. This week, governors from five Western states pledged to cooperate in enlisting government agencies and the private sector in the fight to curb global warming. The governors of Arizona, California, New Mexico, Oregon and Washington said they were taking action because of a lack of leadership from President Bush and Congress. ­

- A $25-million donation from BP has capped phase one of the Los Angeles County Museum of Art's three-part expansion and renovation campaign. Solar panels atop a new entry pavilion named for the British oil company will signal BP's wish to be seen as an environmental innovator. LACMA plans to announce today that the glass-encased structure will be called the BP Grand Entrance. It's under construction along with the adjacent Broad Contemporary Art Museum, with both additions to the museum's Wilshire Boulevard campus projected to open next February. The entrance is a key point in architect Renzo Piano's plan to unify LACMA's sprawling, often confusing layout of buildings. Bob Malone, chairman and president of Houston-based BP America, said the gift betokens a commitment to the arts and a steady philanthropic role in Los Angeles. Before it was merged into BP in 2000, L.A.-based Arco was hailed locally for its philanthropy, including a $10-million donation in 1997 for the Walt Disney Concert Hall. To allay concerns over the merger, BP promised to donate at least $100 million to California charities within 10 years. Malone said that BP's gift to LACMA is free-standing and won't be counted toward the $100 million. He said the same goes for a recently announced $500-million, 10-year research grant to UC Berkeley and other institutions to develop alternative, cleaner-burning fuels. Since 2002, BP has agreed to more than $125 million in legal settlements with state and regional agencies over pollution problems. BP reported profits of $22 billion in 2006 and a record $22.3 billion in 2005. The $25 million for LACMA matches Walt Disney Co.'s 1997 gift for Disney Hall as the biggest corporate donation to the arts in Los Angeles' recent memory. It comes as the arts recede as a cause for big corporations. A survey by the Conference Board, a nonprofit business research organization, showed a 6.1% drop in average arts giving from 2002 to 2005, according to figures from the Americans for the Arts advocacy group. For BP, environmentally tinged largess comes after several years of environmental mishaps in California. In 2002, BP paid the state $45.8 million to settle a suit over pollution from leaking gasoline storage tanks. Later, air quality regulators sued over leakage of smog-forming chemicals at BP's Carson refinery. BP settled for $81 million. ­

- Visitors to the Los Angeles County Museum of Art will get an alfresco welcome when its new entrance pavilion opens next winter, instead of the glassed-in greeting initially envisioned two years ago by architect Renzo Piano. The switch comes at the behest of museum director Michael Govan who, after being hired away from New York's Dia Art Foundation a year ago, decided that a glass pavilion would be a waste of good Southern California weather. The BP Grand Entrance, named Tuesday in honor of a $25-million gift from the oil company, will have a roof for rare rainy days and solar panels to exploit the many sunny ones. Otherwise, it will be an open-air structure, a sort of mega-gazebo on the museum's doorstep, supported by steel beams painted a bright red-orange.

­- When an angry Enrico Mattei coined the phrase the "Seven Sisters" to describe the Anglo-Saxon companies that controlled the Middle East's oil after World War II, the founder of Italy's modern energy industry could not have imagined the profound shift in power that would occur barely half a century later. As oil prices tripled over the last four years, a new group of oil and gas companies rose to prominence. They have consolidated their power as resource holders and pushed the world's biggest publicly traded energy companies, which emerged out of the original Seven Sisters — ExxonMobil Corp. and Chevron Corp. of the U.S. and Europe's BP and Royal Dutch Shell — onto the sidelines and into an existential crisis. The "new seven sisters," or the most influential energy companies from countries outside the Organization for Economic Cooperation and Development, have been identified by the Financial Times in consultation with numerous industry executives. They are Saudi Aramco, Russia's Gazprom, CNPC of China, NIOC of Iran, Venezuela's PDVSA, Brazil's Petrobras and Petronas of Malaysia. Overwhelmingly state-owned, they control almost one-third of the world's oil and gas production and more than one-third of its oil and gas reserves. In contrast, the old Seven Sisters — which shrank to four in the consolidation of the 1990s — produce about 10% of the world's oil and gas and hold just 3% of reserves. Even so, their integrated status — which means they sell not only oil and gas but gasoline, diesel and petrochemicals — pushes their revenue notably higher than that of the newcomers.

­ - BP announced that it had chosen UC Berkeley, in partnership with the Lawrence Berkeley National Laboratory and the University of Illinois at Urbana-Champaign, to lead the largest academic-industrial research alliance in U.S. history. If the deal is approved, BP will give $500 million over 10 years to fund a new multidisciplinary Energy Biosciences Institute devoted principally to biofuels research. Gov. Arnold Schwarzenegger, UC administrators and BP executives immediately proclaimed the alliance — which is not yet a done deal — a victory for higher education and for the environment. But here's another way to see it. For a mere $50 million a year, an oil company worth $250 billion would buy a chunk of America's premier public research institutions, all but turning them into its own profit-making subsidiary. This is shameful. The core mission of Berkeley is education, open knowledge exchange and objective research, not making money or furthering the interests of a private firm. In the last two decades, however, Cal and other universities — increasingly desperate for research dollars — have signed agreements that fail to protect their essential independence, allowing corporations excessive control over their research. Normally, even when university research is corporate sponsored, professors alone direct and shape it. Often, funds are assigned and research proposals are accepted through an independent, peer-review process. In the BP deal, however, the institute — with a director to be "proposed" by BP and other high-level positions to be filled by BP employees or appointees — would play a major role in setting research agendas and controlling purse strings. The plan touts the company's role: BP's "business industry leadership will strongly differentiate the EBI from other primarily academic research enterprises." ­

- BP cut 2006 bonus of departing chief executive John Browne almost in half for year when company reported record earnings but faced accusations that cost-cutting led to safety lapses at plant in Texas; Browne received performance bonus of 900,000 pounds ($1.74 million) for last year, down from 1.75 million pounds for 2005; total compensation fell to 4.57 million pounds ($8.8 million) from 6.36 million pounds; salary rose 5.5 percent, to 1.53 million pounds, from 1.45 million pounds; BP's compensation committee says lower bonuses were result of considering 'broader qualitative factor,' including reviews of operational and safety issues in American division; explosion at BP's Texas refinery in 2005 killed 15 people and led to probes about how company was dealing with health and safety issues. ­

- The Los Angeles County Museum of Art announced that it had received a $25 million gift from the energy company BP to finance a new entrance pavilion for the museum. The pavilion, to be called the BP Grand Entrance, will bridge the area between the new Broad Contemporary Art Museum, scheduled to open in February 2008, and the current complex of buildings at the Museum of Art. The museum also announced that an earlier $25 million gift from Lynda and Stewart Resnick would be used to pay for a new exhibition space and the redesign and refurbishment of the former May Company department store building, both on the western end of the 20-acre museum campus. The museum said the BP gift was one of the largest single corporate gifts ever made to an arts institution in Southern California. ­

- Auction of remaining assets of Yukos Oil signals final stage for company following prosecutorial campaign that began four years ago; it also represents milestone for Pres Vladimir V Putin's campaign to bring Russia's energy resources under state control; Rosneft, once-forlorn state oil company, is widely expected to be winning bidder for Yukos's remaining assets; bank analyst expects bidding to be repeat of wildly rigged auctions in 1990s that tycoons used to buy up state property; recalls how Putin railed against those transactions. ­

- Russian state oil company Rosneft wins auction for assets of bankrupt company Yukos after bidding that lasted four minutes, further tightening Kremlin's control of energy industries in Russia.

April

• Upstream news:

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­- BP Makes Thirteenth Oil Discovery in Ultra-Deep Water Block 31 Angola Sociedade Nacional de Combustíveis de Angola (Sonangol) and BP Exploration (Angola) Limited announced the Miranda oil discovery in ultra-deepwater Block 31, offshore Angola. Miranda is the thirteenth discovery that BP has drilled in Block 31. The well is located 11 kilometres south of the recently announced Titania discovery. Miranda was drilled by the Jack Ryan drill ship, in a water depth of 2,436 metres, some 375 kilometres northwest of Luanda and reached a total depth of 5,116 metres TVD below sea level. The well was tested at a flow rate of 3,822 barrels of oil per day (b/d) through a 48/64ths inch choke.

• Downstream news:

- New fuel testing results shared by DuPont and BP indicate that biobutanol has proven to perform similarly to unleaded gasoline on key parameters, based on ongoing laboratory-based engine testing and limited fleet testing.

• Business/Finance news:

­ - BP first quarter results posted. ­

- A decline in oil and gas prices is expected to translate into lower profits for the big oil companies. Earnings are scheduled to be reported by BP, ConocoPhillips, Exxon Mobil and Chevron. ­

- BP, the European oil giant, reported a 17 percent drop in first-quarter earnings on lower oil prices and declining production. Net profit for the quarter fell to $4.66 billion (3.43 billion euros) from $5.62 billion (4.1 billion euros) in the first quarter a year ago.

May

• Upstream news:

­

­- Sociedade Nacional de Combustíveis de Angola (Sonangol) and BP Exploration (Angola) Limited today announced the ‘Cordelia’ oil discovery in ultra-deepwater Block 31, offshore Angola. Cordelia is the fourteenth discovery that BP has drilled in Block 31. The well is located approximately 3.5 kilometres to the south-east of the recently announced Miranda discovery. Cordelia was drilled by the Jack Ryan drill ship, in a water depth of 2,308 metres, some 371 kilometres north west of Luanda and reached a total depth of 4040 metres TVD below sea level. Sonangol is the concessionaire of Block 31. BP Exploration (Angola) Limited as operator holds 26.67 percent. ­

- BP and its Libyan partner, the Libya Investment Corporation (LIC), signed a major exploration and production agreement with Libya's National Oil Company (NOC). The initial exploration commitment is set at a minimum of $900million, with significant additional appraisal and development expenditures upon exploration success.

• Downstream news:

­ - BP and Rio Tinto announced the formation of a new jointly-owned company, Hydrogen Energy, which will develop decarbonised energy projects around the world. The venture will initially focus on hydrogen-fuelled power generation, using fossil fuels and carbon capture and storage (CCS) technology to produce new large-scale supplies of clean electricity. Decarbonised energy projects are based on the conversion of fossil fuel feedstocks such as coal, petroleum coke (a refinery by-product) or natural gas, to hydrogen and carbon dioxide gases, with the carbon dioxide being captured and sent for permanent storage in geological formations deep beneath the Earth’s surface. In power projects, the hydrogen would be used to fuel a gas turbine for generation of industrial-scale supplies of electrical power. Full integration with CCS technology would ensure that 90 per cent of the carbon dioxide which would otherwise have been emitted to the atmosphere would be safely captured and stored.

- BP and Rio Tinto announced that they are beginning feasibility studies and work on plans for the potential development of a A$2 billion (US$1.5 billion) coal-fired power generation project at Kwinana in Western Australia that would be fully integrated with carbon capture and storage to reduce its emissions of greenhouse gases. This will be the first new project for Hydrogen Energy, the new company launched by BP and Rio Tinto last week, subject to regulatory approval. The planned project would be an industrial-scale coal-fired power and carbon capture and storage project. It would generate enough electricity to meet 15 per cent of the demand of south west Western Australia, while each year capturing and permanently storing about four million tonnes of carbon dioxide which otherwise would have been emitted to the atmosphere. The project would gasify locally-produced coal from the Collie region to produce hydrogen and carbon dioxide. The hydrogen would be used to fuel the power station and around 90 per cent of the carbon dioxide would be captured and stored permanently in a deep underground geological formation. The costs of this low-carbon hydrogen-fuelled power generation are higher than those of traditional power generation. For the project to be economic and able to compete effectively in the electricity market, it would require appropriate policy support and a regulatory environment which recognises and encourages the low-carbon benefits it can deliver. Subject to the successful outcome of detailed engineering and commercial studies, and providing government policy is in place to make the project commercially viable, a final investment decision to develop the project could be made in 2011, with the project coming into operation after a three year construction period.

- BP announced that Iain Conn has been appointed chief executive of the Group’s refining and marketing business with effect from June 1, 2007. He replaces John Manzoni who is leaving BP after 24 years’ service.

• Business/Finance news:

­ - BP Chief Resigns After Losing Battle to Conceal Gay Lover The British magnate John Browne, who as its chief executive transformed BP into one of the most successful global oil companies, resigned abruptly after losing a court battle with a London tabloid over disclosure of his sexual relationship ­

- Following a decision taken by Lord Browne to step down as the company's chief executive officer, the board of BP p.l.c. has appointed his designated successor, Dr Tony Hayward, as new CEO with immediate effect. Lord Browne tendered his resignation after the lifting by the UK courts of a legal injunction preventing a newspaper group from publishing details of his private life. Manchester Business School’s (MBS) Retail Centre, has signed a new deal with BP to provide strategic training for its senior retail managers. The one week programme, which starts in May, will enhance BP managers’ customer focus in order to drive the company’s retail strategy. It will see over 50 BP managers graduate from Australia, Asia and Africa - with the European phase taking place later this year, in autumn 2007. ­

- John Browne, who transformed BP into one of most successful global companies, resigns abruptly after losing court battle with Daily Mail newspaper over disclosure of his sexual relationship with younger man; Browne acknowledges offering 'untruthful account' to court about circumstances under which he met man, former companion; Browne says he will step down immediately, three months earlier than planned, in resignation that could cost him more than $30 million in retirement and stock benefits; BP says Browne will be replaced immediately by Tony Hayward, who had been expected to take over in July; also exonerates Browne of suspected misdeeds relating to use of BP facilities by his former companion. ­

- BP's newly named chief executive Tony Hayward faces critical task of fixing company with broken image and damaged morale on top of dealing with problems he already knew were there; at top of list were investigations in US over BP's safety record and conducting negotiations with foreign governments to ensure that BP can get access to sorely needed resources; Hayward has succeeded John Browne, who quit in midst of revelations about his personal life that prompted him to lie to court. ­

- It was an abrupt and humiliating end for one of Britain's biggest corporate leaders who had turned a small company on the verge of bankruptcy into one of the world's biggest oil producers. John Browne who was knighted in 1998 and made life peer in 2001 by Prime Minister Tony Blair, unexpectedly resigned from BP after losing a court battle with a London newspaper over the disclosure of his relationship with a younger man. His successor, Tony Hayward, now faces a daunting task of restoring morale at BP and refocusing the company on what it does best: finding and developing oil and gas. He will also have to deal with investigations over defective operations in the United States, oil spills in Alaska and a refinery explosion in Texas. Mr. Hayward must also step into a job long filled by an executive who personified the company's image and strategy. ­ ­ - The board of BP p.l.c. announced that it has appointed L. Duane Wilson as the independent expert who will monitor progress in implementing the recommendations of the Baker Panel to improve safety performance at the Group’s five US refineries which are owned and operated by BP Products North America, Inc. The Panel, an independent body chaired by former US Secretary of State, James A. Baker, III, was established by BP on the recommendation of the US Chemical Safety Board to examine safety management systems at the Group’s US refineries and corporate safety culture following the explosion and fire at Texas City in March 2005. Mr Wilson was one of the Panel’s 11 members. ­

- The Rio Tinto Group, a mining company that is a major producer of coal, will join the oil company BP to develop power generation plants that will pump their carbon dioxide emissions underground to help curb global warming. The companies said that Rio Tinto would pay BP $32 million for a 50 percent stake in a new company, to be called Hydrogen Energy. BP will fold its carbon capture and storage operations into the new entity. The extra cost involved in carbon capture plants, compared with traditional power plants, means their development depends on government financial incentives like tax breaks or carbon credits that can be sold on international markets. ­ ­ - The University of Manchester is to deliver executive education programmes for BP as part of a multi-million pound strategic partnership. The two parties will sign a Memorandum of Understanding (MoU), marking their intention to establish a closer working relationship across recruitment activities, research, education, and the application of scientific knowledge. As part of this relationship, The University has been selected by BP to host “Managing Projects” and “Engineering Management” education programmes, after competing against other leading UK universities. Managing Projects will draw on expertise within Manchester Business School and the School of Mechanical Aerospace and Civil Engineering to provide world-class project management education to professionals in the BP Group. ­

- Russian government continues to press its strategy of securing for Gazprom monopoly on exports to Asia; it is threatening important investment by BP with methods similar to those used last fall to force Royal Dutch Shell to sell controlling stake in another energy development in Russian Far East, Sakhalin II project; Gazprom was also beneficiary in that case; BP, which operates through Russian joint venture TNK-BP slips closer to losing its license to Kovykta gas field when Siberian court declines to hear its arguments; Kovykta is BP's largest natural gas project in Russia and is valuable because of its proximity to China. ­

- An executive of the energy company BP felt compelled to hold a news conference in Baku, the capital of oil-rich Azerbaijan, to deny allegations that the company had tried to stage coups in 1992 and 1993. The executive, Bill Schrader, the country president for BP, said such an action would ''contradict corporate philosophy,'' according to a report by the Interfax news agency. Mr. Schrader was responding to articles in Azeri newspapers and the British tabloid Daily Mail citing accusations of a former BP employee. ­

- BP, the British oil company, said the chief executive of its refining and marketing operations is leaving to run Talisman Energy of Canada. The executive, John Manzoni, had been passed over for the chief executive's position at BP when Tony Hayward was named to the job this month. Mr. Manzoni will become president and chief executive of Talisman. He will be succeeded at BP by a fellow executive, Iain Conn, BP said. Mr. Manzoni was criticized for his handling of safety management after an explosion killed 15 workers at a BP refinery in Texas in March 2005.

June

• Upstream news:

­­ - BP Exploration & Production Inc. (NYSE: BP) announced a hydrocarbon discovery in an exploration well that tested its Isabela prospect in the Gulf of Mexico. The well is located on Mississippi Canyon Block 562 in approximately 6,500 feet of water, about 150 miles southeast of New Orleans. Isabela was drilled to a total depth of approximately 19,100 feet into Miocene era sands. ­

- BP announced plans for significant investment in its southern North Sea business which will lead to an increase in recoverable gas reserves and create opportunities for further development offshore. The Dimlington Onshore Compression & Terminals Integration project will see some £125 million ($250 million) invested in new gas compression facilities at the BP-operated terminal which receives gas from fields in the southern North Sea. This new equipment will reduce pipeline pressure between the offshore fields and the terminal allowing the gas fields to increase production. BP expects remaining recoverable reserves in West Sole and Amethyst fields to increase by around 30% as a result of this project.

• Downstream news:

- New fuel testing results shared by DuPont and BP indicate that biobutanol has proven to perform similarly to unleaded gasoline on key parameters, based on ongoing laboratory-based engine testing and limited fleet testing.

- The wide spread availability of biofuels in the UK took a major step forward as BP, Associated British Foods (ABF) and DuPont announced major investment plans, totalling around $400 million, for the construction of a world scale bioethanol plant alongside a high technology demonstration plant to advance development work on the next generation of biofuels. The bioethanol plant, in which BP and ABF subsidiary British Sugar would each hold 45 per cent with DuPont owning the remaining 10 per cent, will be built on BP's existing chemicals site at Saltend, Hull. Due to be commissioned in late 2009, it will have an annual production capacity of some 420 million litres from wheat feedstock. Although initial production would be bioethanol, the partners will look at the feasibility of converting it to biobutanol once the required technology is available.

- BP and D1 Oils plc announced that they are to form a 50/50 joint venture, to be called D1-BP Fuel Crops Limited, to accelerate the planting of Jatropha curcas – a drought resistant, inedible oilseed bearing tree which does not compete with food crops for good agricultural land or adversely impact the rainforest – in order to make more sustainable biodiesel feedstock available on a larger scale. ­

• Business/Finance news:

­ - The board of BP announced that it has appointed Mrs Cynthia Carroll as a non-executive director of BP p.l.c. with immediate effect. ­

- The year 2006 was another year of high and volatile energy prices. But despite high prices, world energy consumption growth remained above average, continuing the trend of recent years. Energy use is also increasingly shifting away from OECD countries and becoming more carbon-intensive. It was a year when energy markets were once again the centre of attention, attracting the interest of politicians, consumers and policy-makers alike. ­

- BP and TNK-BP announced that they have signed a memorandum of understanding to create a strategic alliance with the Russian gas giant, Gazprom, to invest jointly in major long-term energy projects or swap assets around the world. In a move designed to extend Gazprom's access to international markets and deepen BP and TNK-BP involvement in Russian oil and gas, the companies will establish a joint team to identify strategic opportunities for investment both overseas and inside Russia. ­

- A Russian committee delayed a decision on whether to revoke the license for a major natural gas field held by a BP joint venture, though draft minutes for the meeting are said to have included a recommendation to cancel the license. ­

- Under pressure from the Russian government, BP agreed to sell one of the world's largest natural gas fields to Gazprom, the natural gas monopoly, in the latest apparently forced sale that benefited a Russian state company. BP's local joint venture, TNK-BP, sold the field.

July

• Upstream news:

­­- BP and Chinese Academy of Sciences (CAS) held a ceremony in Shanghai to celebrate the signing of a Memorandum of Understanding (MoU), announcing their intent to establish the Clean Energy Commercialization Centre (CECC). CECC aims to accelerate the development in China of clean coal conversion technologies and the creation of associated value chain investment opportunities through the commercialization of key technologies and coordinated management of large scale demonstration projects which primarily use coal as feedstock for fuel production, chemicals manufacturing and power generation.

• Downstream news:

- BP Shipping took delivery this week of the British Emerald, the world’s largest liquefied natural gas carrier (LNGC), the first in a series of dual-fuel diesel-electric gas ships. Built by Hyundai Heavy Industries in Ulsan, Korea, at 155,000 cubic metres she is the largest LNGC to date. The design and construction of this technologically advanced vessel is more fuel efficient than comparable LNG carriers, which will result in reduced fuel costs and greenhouse gas emissions. The dual-fuel technology allows the diesel engines to run on “boil-off” gases from the cargo tanks or on conventional diesel fuel. The vessel will burn 40 tonnes per day (tpd) less than a conventional LNGC of similar size which would burn about 180 tpd.

- Divers have now completed a detailed visual inspection of the CATS pipeline at the location where a large vessel dragged its anchor causing damage to the pipeline’s protective concrete coating. CATS stands for “Central Area Transmission System”. The CATS pipeline is a 36” diameter gas pipeline transporting gas from fields in the central North Sea to terminals at Teesside. The diving work was conducted from a dive support vessel which was secured at short notice following wide scale industry co-operation. Following a comprehensive engineering assessment of the inspection data, it has been determined that the pipeline has suffered damage and a permanent repair will be required before the pipeline is safe to start up. A metal sleeve will be installed to strengthen and protect the affected area of pipeline. Design and fabrication of the sleeve is already underway and it is expected that the system will restart during September. BP will advise when this work has been completed and the pipeline has been returned to service.

• Business/Finance news:

- Carbon specialists are among rising stars in London financial district; managing emissions has become one of fastest-growing specialties in financial services, and companies are scrambling to find workers; their goal is slice of market now worth about $30 billion and that could grow to $1 trillion within decade; investment banks like Goldman Sachs and Morgan Stanley have rapidly expanded their carbon businesses; emergence of carbon finance in London is largely result of decision by European governments to start limiting amounts that industries emit

- A webcast will be hosted by hosted by Tony Hayward, Group Chief Executive, and his senior colleagues, during which BP's second quarter and half year results results will be discussed.

- BP's $18-million settlement with California utilities and state officials over electricity sales made during the state's energy crisis in 2000 and 2001 was approved by the Federal Energy Regulatory Commission. The commission issued an order approving the agreement among London-based BP and the state's three major utility owners, PG&E Corp., Edison International and Sempra Energy Corp., as well as the state's utility regulator, attorney general, Electricity Oversight Board and Department of Water Resources. The settlement resolves claims arising from power sales made by BP Energy, a subsidiary, to California from Jan. 1, 2000, to June 20, 2001.

- Sally Bridgeland takes over as chief executive officer of BP Pension Trustees Limited, which manages the £13 billion BP Pension Fund on behalf of its members, with immediate effect. Sally, who is a Fellow of the Institute of Actuaries, moves to the post following a 20 year career with Hewitt Associates. As CEO she has the Trustee’s delegated authority to direct and oversee the running of the BP Pension Fund, a defined benefit scheme based on final salary which is open to new members, including its investment strategy.

- BP agreed to freeze millions of dollars in payments to its former chief executive, John Browne, and its departing global refining chief, John Manzoni, while it defends itself against shareholder accusations of mismanagement. The agreement will keep Mr. Browne and Mr. Manzoni from receiving money owed them by the company until the conclusion of the shareholder lawsuit, Mary Blasy, a Lerach Coughlin lawyer representing the investors, said in a phone interview. The lawsuit, filed in state court in Alaska on behalf of BP investors, seeks unspecified damages from 39 current and past BP managers and directors. Shareholders assert in their complaint that BP’s management permitted violations of laws on environmental protection, worker safety and fair trade practices. The result, they assert, was a series of accidents that cost BP millions of dollars in repairs, damages and fines and devalued the stock.

- The New York State attorney general's office filed a lawsuit against Exxon Mobil and four other companies to force them to clean up a 57-year-old oil spill that has polluted the soil beneath Greenpoint, Brooklyn, and left traces of toxic chemicals in nearby Newtown Creek.

- Russia says it will respond in a ''targeted'' manner to Britain's expulsion of four diplomats in a confrontation over the radiation poisoning of a former KGB officer in London, an official warned. Still, both Russians and British officials tried to assuage concerns that the dispute would disrupt business between the countries, including a large BP investment in Russia.

- BP reports 1.5 percent increase in second-quarter profit, raised by proceeds from sale of its last British refinery and pipeline in US; earnings excluding those gains and other unusual items fell 12.5 percent from year ago; BP posts net profit of $7.38 billion for quarter, up from $7.27 billion in same period year earlier; revenue was $73.1 billion compared with $73.2 billion last year; company says oil and gas production in quarter averaged 3.8 million barrels of oil equivalent per day, down 5.3 percent from year ago and 2.8 percent less than in first quarter.

- An article about a lawsuit by New York State seeking the cleanup of an oil spill in Greenpoint, Brooklyn, misstated the number of defendants. The suit names only one company -- Exxon Mobil -- not five. The state had previously signaled its intent to sue four other companies -- BP, Chevron, KeySpan and Phelps Dodge -- but did not do so.

- Tens of thousands of people here have signed petitions protesting a permit granted in Indiana that allows the largest oil refinery in the Midwest to discharge more pollutants into Lake Michigan. The permit was issued by the Indiana Department of Environmental Management in June to the Whiting Refinery, a BP unit that produces 16 million gallons of oil products a day, about half of it gasoline. Last week, by a vote of 387 to 26, the United States House of Representatives approved a resolution urging Indiana to reconsider the permit. The resolution was introduced by Representatives Rahm Emanuel, Democrat of Illinois, and Vernon J. Ehlers, Republican of Michigan. Regulators in Indiana allowed the refinery in Whiting, Ind., just across the Illinois state line, to increase the amounts of ammonia and suspended solids that it releases into the lake after the facility undergoes a $3 billion expansion. BP last received a discharge permit for the refinery in 1990. Backers of the expansion, including Governor Daniels, said a bigger refinery would mean more jobs for Indiana — an estimated 2,000 contract jobs for the expansion and 80 positions at the refinery. It is estimated that the expanded refinery would produce an additional 620 million gallons of gasoline each year. Americans consume, on average, about 385 million gallons of gasoline a day, according to 2005 figures from the United States Department of Energy. Mr. Daniels said he had no plans to rescind the permit. According to documents on BP’s Web site, the new permit allows the refinery to discharge 1,584 pounds of ammonia, an increase of 54 percent over the current level, into the lake each day. Also allowed is discharge of up to 4,925 pounds of suspended solids into the lake each day, an increase of 35 percent. Scott Dean, a spokesman for BP, said that the Indiana permit’s requirements were stricter than federal requirements, and that BP expected to operate well within those limits. The permit is part of BP’s plan to expand and modernize the Whiting refinery, which was built in 1889 by the Standard Oil Company and which now processes 405,000 barrels of crude oil each day. About 1,700 people work at the facility, and BP has an annual payroll of about $100 million in Indiana. The expansion is set for completion in 2011. BP documents said the company would also spend $150 million to improve its wastewater treatment plant in Whiting, from which it discharges about 20 million gallons of treated wastewater a day, including the ammonia and suspended solids addressed by the permit, into Lake Michigan. But that promise has not sat well with lawmakers in Illinois and the region’s conservation groups, which have said the company could do more treatment to prevent the increase in pollutants. Last week, a bipartisan group of lawmakers from the region met with BP executives in Washington to express their dismay with the issuance of the permit. They are scheduled to meet again on Sept. 1, and have asked BP to look for ways to make its water treatment process more environmentally friendly. The company will review its water treatment plans, but will not halt plans for the Whiting facility’s expansion, Mr. Dean said.

- The owner of Russneft, one of Russia’s largest private oil companies, confirmed that he would sell the business to an investor loyal to the Kremlin, but he added in an open letter that the sale was not voluntary. Mikhail S. Gutseriev, who was once in the tight coterie of Russian billionaires known as oligarchs but has since fallen from favor, accused the government of President Vladimir V. Putin of forcing him out of the company using trumped-up tax claims. The critical letter was the first significant public challenge to Mr. Putin from an influential businessman since the imprisonment four years ago of Mikhail B. Khodorkovsky, the former chairman of Yukos Oil, who is serving an eight-year sentence in Siberia. The development left analysts wondering what the future holds now for Mr. Gutseriev. In a letter that was published on his company Web site, Mr. Gutseriev maintained that the government was using regulatory pressure on both foreign and domestic producers as a pretext to expropriate oil and natural gas property privatized in the 1990s, as part of an effort to effectively nationalize the energy industry. Oleg V. Deripaska, one of Russia’s wealthiest businessmen and an ally of Mr. Putin, applied for regulatory approval to acquire the oil company. In a statement, his holding company, Basic Element, said Russneft would be incorporated into a subsidiary called En+, which also owns Rusal, Russia’s largest aluminum producer. Mr. Gutseriev said he decided to sell rather than risk his company’s dismantlement and further harassment of his employees. He has denied any wrongdoing in forming Russneft in 2002. In an echo of the Yukos case, which began in 2003, the police charged Mr. Gutseriev with illegal business activity in May. Last autumn, Russian regulators pressured Royal Dutch Shell about environmental infractions in increasingly shrill terms, at one point threatening to sue for each tree cut down on a pipeline project. Shell and two Japanese partners, in response, sold 50 percent plus one share in the Sakhalin II project to the state energy giant Gazprom. Then, in June, BP’s local joint venture in Russia, TNK-BP, sold a controlling stake in a large natural gas project to Gazprom for a below-market price after being pressed by regulators for developing the field too slowly, a violation of a license technicality. In both cases, the foreign companies made no public protest or statement pointing out that the nominal claims against their operations in Russia appeared to be pretexts to force a sale, the point that Mr. Gutseriev made. A spokesman for Basic Element did not return calls requesting comment on Mr. Gutseriev’s claim that the transaction involving Russneft was not voluntary, something that could prove a stain on Mr. Deripaska’s business reputation as he expands his mining-to-automotive empire outside Russia’s borders. The board of Russneft issued a statement saying Mr. Gutseriev had resigned as director and would halt other business activity in Russia as well.

- British oil giant BP reported a better-than-expected second-quarter profit of $7.38 billion, or $1.90 a share, up from $7.27 billion, or $1.82, in the year-earlier quarter. The results were bolstered by one-time gains as well as a jump in refining and marketing income because of high gasoline prices in the United States and elsewhere. The company, still reeling from a deadly refinery explosion in Texas and a costly pipeline leak in Alaska, said operating results were hurt by continuing downtime at its Whiting, Ind., refinery. Nonetheless, the sale of a refinery in Britain and a Texas pipeline helped boost profit at BP's refining and marketing business to $2.7 billion, up 48%. BP's flagship business, production and exploration, had profit of $6.9 billion, down 12%. Average oil and natural gas production in that division fell by 5% to the equivalent of 3.8 million barrels a day.

August

• Upstream news:

­

• Downstream news:

- BP America promised to operate its Whiting refinery to meet the lower discharge limits contained in the refinery’s previous wastewater treatment permit.

- Divers have now successfully installed a metal sleeve to the CATS pipeline (CATS stands for “Central Area Transmission System”. The CATS pipeline is a 36” diameter gas pipeline transporting gas from fields in the central North Sea to terminals at Teesside. It is operated by BP on behalf of itself and the other owners (BG, Hess, ConocoPhillips, Eni and Total)) at the location where a large vessel dragged its anchor causing damage to the pipeline. The metal sleeve has been installed as a permanent repair to strengthen and protect the affected area of the pipeline. Gas has been reintroduced to the CATS pipeline to repressurise the system. A controlled re-start of the CATS system will commence later this week and a return to normal throughput levels is expected around the middle of September.

• Business/Finance news:

- BP and Chinese Academy of Sciences (CAS) held a ceremony in Shanghai to celebrate the signing of a Memorandum of Understanding (MoU), announcing their intent to establish the Clean Energy Commercialization Centre (CECC). CECC aims to accelerate the development in China of clean coal conversion technologies and the creation of associated value chain investment opportunities through the commercialization of key technologies and coordinated management of large scale demonstration projects which primarily use coal as feedstock for fuel production, chemicals manufacturing and power generation.

September

• Upstream news:

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• Downstream news:

• Business/Finance news:

October

• Upstream news:

­- Sociedade Nacional de Combustíveis de Angola (Sonangol E.P.), BP Angola (Block 18) BV, as the Operator, and Sonangol Sinopec International Limited (SSI) announce that production from the Greater Plutonio development area in Block 18, offshore Angola, started on 01 October 2007. It consists of five distinct fields discovered in 1999-2001 in water depths of up to 1,450 metres and is the first BP-operated asset in Angola. The Greater Plutonio offshore development area is located 160 kilometres northwest of Luanda and is comprised of the Galio, Cromio, Paladio, Plutonio and Cobalto fields in water depths varying from 1200 to 1450 metres. It will contain 43 wells: 20 producers, 20 water injectors, and 3 gas injectors. The development utilizes a floating, production, storage and offloading vessel (FPSO) to process produced fluids and export crude. The FPSO is connected to the wells by a large subsea system. The FPSO is 310 metres in length and has an oil storage capacity of 1.77 million barrels, oil processing of up to 240,000 barrels of oil per day, produced and treated water injection rate of 450,000 barrels per day, and gas handling of up to 400 million standard cubic feet per day. It is held in position by 12 mooring lines connected to anchor piles on the seabed.

• Downstream news:

• Business/Finance news:

- Electronic Arts (NASDAQ: ERTS) and BP have collaborated to include climate change education within SimCity(tm) Societies, the next iteration in the genre-defining city-building franchise that has sold more than 18 million games to date. The collaboration brings together world-class game building skills and industry expertise on energy, electricity production and greenhouse gas emissions to highlight the impact of electricity generation on the emissions of carbon dioxide that are linked to climate change. The low-carbon electricity choices and monitoring of SimCity's carbon emissions provide an entertaining, fully-integrated and accurate look at some of the causes and some of the major solutions available to combat rising levels of carbon and to help address the threat of global warming. SimCity Societies will be available at retailers across North America and Europe November 15.

- BP announced that it has agreed to sell its 47.41% equity interest in Samsung Petrochemical Co., Ltd. (SPC), to Samsung Corporation and Ms Lee, Boo Jin for consideration of $70m in cash. SPC, located in South Korea, is one of the leading producers of purified terephthalic acid (PTA) in Asia with a total production capacity in excess of 1.8 million tonnes per year. PTA is the preferred raw material used to manufacture polyester.

- BP reiterated its determination to improve performance by simplifying how the company is structured and run, ensuring that resources are increasingly shifted to the front line with operating managers freed from corporate bureaucracy and the burden of unnecessary overheads. Setting out his forward agenda for the cultural change he signalled to the financial markets in the summer, chief executive Tony Hayward said that while the process would yield some medium term cost reductions, the major benefit would be the revenue boost expected from greatly improved operational efficiency over the longer term. In a worldwide message to staff issued in London, Hayward said BP will in future comprise only two business segments, Exploration & Production and Refining & Marketing. The current third segment, Gas, Power & Renewables, would be incorporated mainly into the other two. A separate division, Alternative Energy, will handle BP's low carbon business and future growth options outside oil and gas. The two segments will be made up of a series of strategic performance units. These will become BP's main operating entities, each effectively a profit centre, with closely-defined remits and rigorous business objectives.

- BP's third-quarter replacement cost profit was $3,867 million, compared with $6,975 million a year ago, a decrease of 45%. For the nine months, replacement cost profit was $14,315 million compared with $18,358 million, down 22%. The third-quarter result included a net non-operating loss of $346 million compared with a net non-operating gain of $1,225 million in the third quarter of 2006. For the nine months, the net non-operating gain was $758 million compared with a net non-operating gain of $1,214 million for the first nine months of 2006. Net cash provided by operating activities for the quarter and nine months was $6.4 billion and $20.4 billion respectively compared with $5.1 billion and $23.2 billion a year ago.

- BP is announcing proposed plans for important changes to its North Sea organization, headquartered in Aberdeen, designed to secure a long-term future for the company's oil and gas business in the UK. The changes are intended to simplify the organization and improve the efficiency of work processes in response to the challenges of the increasingly mature North Sea, where declining production and rapidly rising costs have created business conditions which are not sustainable in the long term. The new structure will mean fewer organizational units and reduced management layers. This will allow consolidation of onshore non-technical support activities, leading to economies of scale and reduced complexity. Regrettably, the company anticipates that the changes will result in the loss of some BP staff and contractor positions which support its operations in the UK. BP estimates that somewhere in the region of 350 positions could be affected, from a total onshore staff and contractor workforce of 2,100. Most of these office-based support jobs are based in BP's North Sea operations HQ in Aberdeen.

- BP America announced two plea agreements and a deferred prosecution agreement with the U.S. Department of Justice and a consent order with the Commodity Futures Trading Commission which end governmental investigation of company wrongdoing on matters related to the March 2005 explosion and fire at the Texas City refinery, the March and August 2006 oil transit line spills in Alaska and improper propane trading in April 2003 and February 2004. Texas City: BP Products North America Inc. will plead guilty to a felony for failing to have adequate written procedures for maintaining the ongoing mechanical integrity of process equipment at the Texas City refinery and for failing to inform contractors of the hazards related to their occupancy of temporary trailers in the vicinity of the refinery's Isomerization Unit. BP Products has agreed to a $50 million fine and three years probation. The agreement requires BP Products to continue its cooperation with the government's ongoing investigation of the circumstances leading to the March 23, 2005 Texas City refinery explosion and fire which claimed the lives of 15 workers and injured hundreds more. The agreement also requires, as a condition of probation, compliance with all terms of the September 2005 Settlement Agreement with the U.S. Occupational Safety and Health Administration (OSHA) and the June 2006 Agreed Order issued by the Texas Commission on Environmental Quality. Under the agreement the Justice Department agrees not to bring additional criminal charges against BP. Alaska: BP Exploration Alaska, Inc. (BPXA) will plead guilty to a misdemeanor violation of the U.S. Federal Water Pollution Control Act and admits, in the plea agreement, that the company's approach to monitoring and managing corrosion in Prudhoe Bay oil transit lines failed to properly consider the risks posed by changing operating conditions in the field and that, as a result, BPXA failed to take necessary actions to prevent the March 2006 pipeline spill. BPXA has agreed to a $12 million fine and 3 years probation. Under the agreement, BPXA will also pay restitution of $4 million to the State of Alaska, which has agreed not to prosecute the company, and make a $4 million payment to the National Fish and Wildlife Foundation for Arctic environmental research. The Justice Department and State of Alaska have agreed not to bring further criminal charges against BPXA in connection with the March and August 2006 spills. The leak and the resulting 4,800 barrel spill impacted 1.9 acres and is the largest oil spill to ever occur at Prudhoe Bay. The plea agreement acknowledges that BPXA promptly and thoroughly cleaned up the discharged oil. No lasting harm to the surrounding environment is expected. April 2003, February 2004 propane trades: BP America has entered a deferred prosecution agreement (DPA) with the U.S. Justice Department under which the company admits that it manipulated the price of February 2004 TET physical propane and attempted to manipulate the price of TET propane in April 2003. The DPA concludes all criminal investigations of BP America on matters related to propane, gasoline, crude oil and other commodity trading. BP Products North America Inc. also has entered a companion consent order with the U.S. Commodity Futures Trading Commission (CFTC) resolving all civil enforcement matters concerning the company's propane and gasoline trading. BP America will pay fines, penalties and restitution totaling just over $303.5 million, including $53.5 million to a victim restitution fund, a criminal penalty of $100 million, a civil penalty of $125 million and a $25 million payment to the U.S. Postal Inspection Service Consumer Fraud Fund. The DPA has a term of three years. Charges will be dismissed at the end of the term following Justice Department determination that BP America has complied with the terms of the DPA. The DPA requires BP America's continued cooperation with the U.S. government investigation of the trades in question. The DPA will result in the appointment of an independent monitor to make sure BP America has appropriate trading compliance policies and programs in place, that the policies and programs are implemented appropriately, and that they are being enforced. The independent monitor will have authority to investigate and report alleged violations of the Commodity Exchange Act or CFTC regulations and to recommend corrective action. BP America conducted its own investigation and cooperated with the Justice Department and the CFTC investigations of propane trading in April 2003 and February 2004. The February 2004 TET propane trades resulted in a loss of $10 million to the company.

- The chief executive of BP, Tony Hayward, presented himself when he took over in May as a leader who could move the company away from its troubled recent past. Mr. Hayward and BP took a big step forward in doing that. At a news conference in Washington, the Justice Department announced that BP and its subsidiaries had agreed to pay $373 million in fines and restitution to settle accusations of environmental violations that had led to a fatal explosion at a Texas refinery in 2005 and to leaks of crude oil from pipelines in Alaska. The settlement also covers fraud allegations related to conspiring to corner the market and manipulate the price of propane. As part of the plea agreement, BP will pay $50 million in criminal fines for the 2005 explosion and $20 million in fines, restitution and other payments for the pipeline leaks. In addition, BP said it would pay $303 million in penalties and restitution to settle the energy trading violations. The settlement included the largest criminal fines ever imposed for violations of the Clean Air Act, as well as the largest fine for a violation of the Commodity Exchange Act. Mr. Hayward has moved to change BP’s culture, despite some initial skepticism. He was a part of the management team during BP’s recent troubles, including the leaks in Alaska, the refinery explosion that killed 15 workers in Texas City, Tex., and problems at a refinery in Indiana. Mr. Hayward has already impressed investors with plans to streamline operations, cut costs and use more local expertise to catch up with rivals like Royal Dutch Shell and Exxon Mobil. BP still faces a shareholder lawsuit over the leaks in Alaska and more than 2,000 claims involving the Texas explosion. Its refineries in Texas and Indiana are expected to return to full capacity in early 2008.

- BP is taking a multimillion-dollar broom to sweep away a slew of federal charges linked to energy price fixing, a deadly refinery blast and pipeline leaks and focus on its energy business. The more than $373 million in settlements announced are part of BP's attempt to rid itself of problems from the stewardship of former Chief Executive John Browne and move ahead with the restructuring of Europe's second-largest oil firm. On top of the fines and restitution, four former BP employees were indicted by a federal grand jury in Chicago on 20 counts of mail and wire fraud connected to a scheme to manipulate energy markets. The bulk of the fines -- $303.5 million -- is punishment for BP's conspiring to fix propane prices in 2003 and 2004. London-based BP also agreed to pay a $50-million fine and plead guilty to a felony for its role in a 2005 explosion at its Texas City refinery that killed 15 employees and injured more than 170. Additionally, it will pay $20 million in criminal fines and restitution to Alaska and the National Fish and Wildlife Foundation for pipeline leaks and spills at Alaska's Prudhoe Bay, the nation's largest oil field. The settlements were made public at Justice Department news conferences in Washington and Houston. The chairman of the House Energy and Commerce Committee, Rep. John D. Dingell, criticized the amount BP will pay to settle the Texas City charge. "I note with curiosity that when an average citizen commits a felony it usually leads to a prison sentence. Yet, apparently, when a big oil company commits a felony that causes 15 deaths, it pays a criminal penalty equal to less than a day's corporate profits," the Michigan Democrat said. BP reported an adjusted net profit of $22 billion in 2006, or about $60 million per day.

November

• Upstream news:

­- BP announced several major contracts for the appraisal of the Khazzan/ Makarem gas field in Oman’s Block 61 awarded to BP in January. These include contracts for seismic acquisition services, seismic reprocessing, select stage engineering and drilling rigs. Global Geophysical Services has been awarded the contract for seismic acquisition. The US company will shoot 3D seismic over most of the 2,800 square kilometres of the acreage, mobilisation for which will be at the end of this year. PGS Data Processing Middle East has been awarded the contract for processing of the new seismic and re-processing of the existing seismic data over the concession area. Worley Parsons Oman has been awarded the select stage engineering contract. The scope of services under the select stage engineering includes evaluation of options for the appraisal phase of early production of the Khazzan/Makarem gas fields. Dalma Energy & Co LLC Oman has been awarded the drilling contract with a two rig well programme planned to commence by the end of 2008. BP signed an exploration and production sharing agreement for the appraisal and development of the Khazzan/Makarem fields in January 2007. The contracts awarded are part of the six year programme to appraise the ‘tight’ gas reservoirs.

- BP, on behalf of the Shah Deniz partnership, announced a further major new gas-condensate discovery in the Shah Deniz field in the Caspian Sea. The SDX-04 appraisal and exploration well, some 70 kilometres south east of Baku, discovered a new high pressure reservoir in a deeper structure below the currently producing reservoir. The well was drilled to a Caspian-record depth of more than 7,300 metres in the south western part of Shah Deniz. The exploration discovery represents a potentially significant find. There will be appraisal to fully delineate the new structure in the next few years. In addition, during the appraisal phase, the well encountered gas condensate in the currently producing horizons extending the field to the south. Test flows were at the maximum capacity of the on-board equipment of 35 million standard cubic feet a day (1 million standard cubic meters a day). Results confirm sufficient gas at Shah Deniz for a second stage of development. Although further work is required to define this second phase it will likely be similar or larger than stage 1 - 8.6 bcma (billion cubic metres a year).

- BP announced that natural gas production from the Mango field, offshore Trinidad, began on the evening of November 17, 2007. The field, in the South East Galeota Block, was first discovered in 1971 and further appraised in 2000. The Mango field is 35 miles south east of Galeota Point in water depths of some 235 feet (72 metres). BP Trinidad and Tobago (bpTT) holds a 100 per cent interest in the field. The field has been developed using a single unmanned platform with a capacity to produce from nine wells. Gas is exported through a new subsea four-mile 26-inch diameter pipeline tied into the current Cannonball pipeline and then to the Cassia B gas processing hub.

• Downstream news:

- BP America Inc. has submitted a permit application to the Indiana Department of Environmental Management (IDEM) in which the company is proposing to lower air emissions limits for the company's Whiting Refinery after completion of a $3.8 billion modernization that will equip the refinery to process more Canadian heavy crude oil and increase motor fuel production by about 1.7 million gallons a day. Under the permit application submitted to IDEM, regulated air emissions at the refinery will be held to more stringent limits than the refinery is currently allowed. The application proposes individual limits on almost all air emissions sources including those not currently subject to emission limitations. In addition to the modernization project, the permit application also accounts for all expected changes in emissions at the refinery from ongoing upgrades and maintenance through 2011.

- BP's U.S. Convenience Retail unit announced that it will sell all of its company-owned and company-operated convenience stores. The majority of sites will be sold to franchisees and some will also be sold to dealers and large distributors (jobbers). The sale of the convenience stores will be completed over the next two years. The sites will continue to market BP fuels in the eastern U.S. and ARCO fuels in the western U.S. The franchise agreement is 20 years and requires sites to be supplied with BP or ARCO branded fuels for the term of the 20-year contract.

• Business/Finance news:

- A federal judge in Louisiana handed the oil industry a major legal victory this week, saying the government had no authority to suspend billions of dollars’ worth of drilling incentives when energy prices were high. If upheld, the ruling could free companies from paying the government up to $60 billion in royalties for oil and gas produced in publicly owned waters of the Gulf of Mexico. The ruling, in a lawsuit brought by Kerr-McGee Oil and Gas Corporation, is not a final verdict. But the judge flatly rejected all of the government’s arguments, not only refusing to throw out the case but also agreeing with the oil company that the government had overstepped its authority. Royalties on oil and gas have become one of the government’s bigger sources of revenue after income and payroll taxes. Last year, such royalties totaled more than $10 billion, and high oil prices are likely to drive those numbers to a new peak this year. The Government Accountability Office, the investigative arm of Congress, estimated last year that an industry victory in the case could cost the government $60 billion over the next 20 years. But with oil prices now approaching $100 a barrel, and companies investing billions to develop new gulf fields, the losses to taxpayers could be considerably higher. At issue in the court battle is a 1995 law aimed at increasing oil and gas production in the Gulf of Mexico. Under that law, the Interior Department allows companies that drill in deep water to avoid paying a standard royalty on oil and gas from publicly owned waters — usually 12 percent to 16 percent of sales. But the government has also insisted that companies are not entitled to the incentive, known as royalty relief, if the market price of oil climbs above about $34 a barrel. Kerr-McGee sued the government last year, saying that Congress never authorized the Interior Department to impose the high-price restriction, even though lawmakers who drafted the law have often said that was their specific intent. The judge in Louisiana, Patricia H. Minaldi, rejected the government’s motion to throw out the case. In the ruling, Judge Minaldi wrote that Kerr-McGee, which Anadarko acquired last year for $21 billion, was correct and that the Interior Department had overstepped its authority. The judge also rejected all of the government’s technical justifications for the rules in the event that it lost the argument over its Congressional mandate. A victory for Kerr-McGee would apply to more than 50 companies, including industry giants like Exxon Mobil, Chevron, BP and Royal Dutch Shell. Chevron and its partners discovered a mammoth oil field last year that would be protected, but the court battle affects thousands of leases signed from 1995 through 2000. Because it takes so long for companies to explore and then develop a deepwater oil field, the oil and gas from those leases is just beginning to flow. Democratic lawmakers in Congress have been trying to address the oil and gas royalties as part of a broader energy bill, but the House and Senate have been stalled for months by differences on royalties and other issues. The House energy bill, passed early this summer, would prohibit companies from acquiring additional offshore leases if they did not agree to pay royalties during times of high prices. In the Senate, Republican lawmakers blocked Democrats this summer from including any provisions to raise taxes on oil companies.

- Tony Hayward, the chief executive of BP outlined what BP is doing in order to bolster U.S. energy security, investing $30 billion in the last five years. America is the biggest part of BP, said Hayward, accounting for more than 40% of the company's assets and almost 40% of its capital spending and production. BP is continuing to invest in U.S. energy security, said Hayward, spending $6 billion a year in the next five years on new projects, including the giant Thunder Horse platform in the Gulf of Mexico; the Wamsutter tight natural gas project in the Rockies; and upgrading the Whiting refinery to take complex and heavy crudes. BP is already one of the biggest biofuels blenders in the country and is investing $8 billion in alternative energy, including wind farms, solar, and a partnership with three major universities to develop the next generation of biofuels. However, looking to the future, Hayward said he hoped that a comprehensive energy policy for the U.S. would incorporate energy conservation as an important way to both promote energy security and to meet environmental concerns. He cited BP's own energy efficiency drive, which not only substantially reduced carbon emissions, but saved the company $2 billion a year.

- If litigation is war by other means, then the Supreme Court case of New Jersey v. Delaware is nothing less than civil war — the latest battle in a dispute over the two states’ Delaware River boundary, which has flared up periodically for well over a century. Earlier Supreme Court face-offs involved the two states fighting over fishing rights and oyster beds. The case that was argued has a more modern focus: a huge liquefied natural gas storage and processing plant that BP wants to build on New Jersey’s Delaware River shore in Logan Township. New Jersey wants the $600 million plant and the economic boost that its construction and operation would bring. Delaware declared in 2005 that the project would violate its Coastal Zone Act and refused to issue a permit. The problem for New Jersey is that operating the plant requires a 2,000-foot pier, which would reach from the New Jersey shore to the navigable part of the river, so tankers can dock and unload. Under a 1934 Supreme Court decision that settled a long-disputed boundary, Delaware owns the entire riverbed, from its own shoreline up to the low-water mark on the New Jersey side. But that fact, which neither side in the current case disputes, is not the end of the case, but only the beginning, as the argument made clear. A major complicating factor is that in 1905, before the boundary was settled, the two states entered into a compact that is still in effect. It provides that “each state may, on its own side of the river, continue to exercise riparian jurisdiction of every kind and nature” under its own laws. The word riparian refers to shoreline, and under traditional land-use law, ownership of shoreline property conveys the right to build a pier or wharf extending far enough into the water to make the property accessible. To New Jersey, permitting the BP project is simply an exercise of “traditional riparian authority” recognized under the compact, its lawyer, H. Bartow Farr III, told the justices. But “the question that’s really at the rub of this case,” Delaware’s lawyer, David C. Frederick, said when his turn came, “is what you do on the wharf.” The “crucial distinction here,” he said, was that Delaware was entitled to exercise its police power to block an activity that it considers dangerous or a “nuisance.” The justices’ many questions during the animated session indicated that they found neither argument completely persuasive. “Obviously, the right to ‘wharf out’ does not include the right to use the wharf for whatever you like,” Justice Antonin Scalia said to Mr. Farr. And Justice Samuel A. Alito Jr. objected to Mr. Frederick that if Delaware was entitled to a veto power over the uses of New Jersey-based piers and wharves, then the effort in the 1905 compact to preserve New Jersey’s riparian rights was “worthless” and “meaningless.” Could Delaware declare that docking a sailboat was a “nuisance”? he asked. New Jersey brought its case against Delaware directly to the Supreme Court, invoking the court’s exclusive constitutional authority to decide suits between states under what is known as the court’s “original jurisdiction.” That fact presents a potential, highly unusual wrinkle. Justice Stephen G. Breyer recused himself from the case due to his ownership of BP stock, raising the possibility of a 4-to-4 tie. Ordinarily, a tie vote at the Supreme Court means that the lower court judgment is affirmed, without an opinion and without setting a precedent. But in this instance, there is no lower court judgment. There is simply the report of a lawyer from Portland, Me., Ralph I. Lancaster Jr., whom the justices appointed as a special master to investigate the dispute and make a recommendation. He recommended a ruling for Delaware. Kenneth S. Geller, a co-author of “Supreme Court Practice,” the leading manual on Supreme Court procedure, said in an interview that he was unaware of a tie vote ever occurring within the court’s original jurisdiction. If the court could not decide the case, he said, the states would probably have to find a political solution.

- Britain’s largest companies are pledging to offer greener products and invest in research and technology as part of a wider push to reduce carbon emissions. In an unprecedented joint effort, 18 of Britain’s top companies, including carmakers, airlines, retailers and banks, are publishing a report on Monday in which they promise to develop new products and services that allow customers to cut their carbon emissions.The initiative is also intended to send a message to companies around the world to move climate change higher on their agendas. The companies say that they will develop a standard for all businesses to report carbon emission levels regularly, invest in technology and emission-saving projects and promote greener behavior among their employees, starting by reducing emissions from company cars and offices. Among the companies are BP, the supermarket operator Tesco and the phone company BT.

December

• Upstream news:

­- BP announced the successful start-up of the world's deepest subsea multi-phase pump project, a breakthrough in application of a technology with the potential to increase recovery of oil from deepwater fields. Installation of the two subsea pumps and associated equipment at the King field in the Gulf of Mexico sets a double world record, for both depth and distance. At 5,500 feet below the sea's surface, the King facilities are in water almost twice as deep as the previous deepest installation of multi-phase pumps. The pumps are also positioned over 15 miles from the Marlin tension leg platform - well over twice the previous record distance from a host platform of six miles. BP is 100 per cent owner and operator of King. The two pumps will enhance production from the King field by an average of 20 per cent. After its 2002 start-up, the King field reached peak production in 2004, with recent production averaging 27,000 barrels of oil equivalent a day. In addition to the increase in production, this project will allow a seven per cent increase in recovery, extending the economic life of the field by five years.

- The British oil company BP and Husky Energy said they would form a joint venture linking a BP Ohio refinery with Husky’s Sunrise oil sands project in Alberta in what is the latest in a series of deals integrating Canadian oil production and United States processing. The British oil major and Husky, a Canadian producer controlled by Hong Kong tycoon Li Ka-shing, plan to spend at least $5.5 billion initially on the venture, which furthers efforts to secure markets for Canada’s huge oil sands resource. The transaction is similar to an oil sands-refining venture hammered out by EnCana and ConocoPhillips last year and follows various arrangements by Suncor Energy, Marathon Oil and others. BP was the only oil major without holdings in the oil sands, which are second in size only to Saudi Arabia’s conventional oil reserves. For BP and its new chief executive, Tony Hayward, the deal is a turnaround from the strategy of the former chief, John Browne, who shunned the oil sands as being too costly. Husky and BP will have 50 percent each of BP’s 155,000-barrel-a-day refinery in Toledo, the companies said. The plant will be retooled to process 120,000 barrels a day of extra-heavy bitumen from the Alberta oil sands and total capacity will be increased to 170,000 barrels a day. The work is expected to cost $2.5 billion. The companies will also share ownership of Sunrise, located near Fort McMurray, Alberta. It is expected to produce 200,000 barrels a day of heavy crude by 2015-2020, starting with a 60,000 barrel-a-day phase in 2012, they said.

- BP announced that natural gas production from the Cashima field, offshore Trinidad, started on December 15, 2007. This followed the first gas production from the nearby Mango field on November 17. The Cashima development comprises the Cashima field, discovered in 2001, and the North East Queens Beach field, discovered in 1975, both in water depths of some 270 feet (80 metres) on the South East Galeota Block, approximately 45 miles east of Galeota Point. BP Trinidad and Tobago (bpTT) holds a 100 per cent interest in the development. The fields have been efficiently developed using a single unmanned platform of the same standardised design first used for the Cannonball field and then the Mango field. Cashima has a capacity to produce from nine wells with gas exported through a new 11-mile 26-inch pipeline to the Amherstia gas processing hub.

- BP announced that it has completed commissioning of the Atlantis semi-submersible platform in the deepwater Gulf of Mexico and commenced the export of oil and gas from the deepest moored floating oil and gas production facility in the world. Production commenced with the commissioning of wells and facilities in October 2007. With gas facilities and export pipelines now fully commissioned, gas sales have started and oil volumes are increasing. Additional wells will continue to be brought on stream, and the facility is expected to reach plateau production by end of calendar year 2008.

• Downstream news:

- BP announced that it is moving into the Canadian oil sands by acquiring a half-share in the Sunrise field in Alberta operated by Husky Energy. At the same time Husky will acquire a half share in BP's Toledo oil refinery in Ohio, US, between them forming an integrated North American oil sands business. Two independent 50/50 joint ventures will be formed from the equally valued assets to own and develop the businesses. The Sunrise oil sands field is expected to be sanctioned in 2008 with first production of bitumen in 2012, building to 200,000 barrels of oil a day (bpd) by the end of the next decade with a 40 year production plateau. Sunrise, located in the Athabasca oil sands in northeast Alberta will be developed using steam assisted gravity drainage (SAGD), a tested technology which heats the bitumen within the reservoir allowing it to flow to the surface. The bitumen will be piped to Hardisty, Alberta, from where it will be transported via existing pipeline networks for refining. Sunrise will be operated by Husky as a Canadian oil sands partnership, based in Calgary. Toledo Refinery's crude distillation capacity is currently 155,000 bpd of which 60,000 bpd capacity is currently heavy oil. The refinery is located in one of the largest energy consumption regions of the US and, subject to necessary approvals and permits, will be expanded to process approximately 170,000 bpd of heavy oil and bitumen by 2015. It will be operated by BP as a US refining LLC.

- BP Solar, a European market leader in the design, manufacture and marketing of photovoltaic solar energy, will begin construction in the second quarter of 2008 of a module assembly factory in the industrial park of La Nava II, in Puertollano (Castilla La Mancha). This represents an investment of around 100m Euros. The new plant will use state-of-the-art technology to manufacture photovoltaic solar modules. The production capacity, in phase one, would be up to 300 MW per year, which means enough energy to meet the needs of between 150,000 and 200,000 homes and a saving of approximately 420,000 tons in CO2 emissions per year. A further possibility, once the phase one is in production and dependent on the conditions of the market, is the implementation of a second phase expansion of the plant to reach production capacity of up to 500 MW. The BP Solar factory in Puertollano will not only bring about social benefits but will deliver major advances in the economic development of the area as it is expected to generate 500-600 direct new jobs. The opening of the factory sets a benchmark in technological development in the field of the large-scale production of photovoltaic modules worldwide.

• Business/Finance news:

- Robert O. Anderson, an oilman whose Stetson-size accomplishments included building Atlantic Richfield into an industry giant; discovering oil in Alaska; becoming America’s largest rancher, and giving generously to environmental causes, died at his home in Roswell, N.M. He was 90. The cause was complications of a fall, his son Phelps Anderson said. It was Mr. Anderson’s insistence on drilling one more exploratory well on the North Slope in 1967 — after a succession of failures — that led to the discovery of what is still the largest oil field yet found in North America; it has produced billions of barrels of crude and accounts for a fifth of domestic oil production. Mr. Anderson also led the seven-company effort to develop the Alaskan oil pipeline in 1974. In 1982, he negotiated the first American offshore drilling operation in China. Even two decades after his retirement and even after Atlantic Richfield was bought by BP seven years ago, Mr. Anderson stood out as perceptive, unpredictable and outspoken. He was an oilman who warned of global warming caused by fossil-fuel consumption in the 1980s, and more than once advocated higher taxes on his industry. He rescued two flailing publications, The Observer, a British newspaper, in 1977, and Harper’s magazine in 1980. He was also a Reagan Republican who held many top nonelected posts in the Republican Party and favored nuclear power and a smaller federal government. Despite his large environmental philanthropy, he was once doused with a can of motor oil by an opponent of the Alaskan pipeline. He favored lively discussion and wide-ranging research, serving for many years as chairman of the Aspen Institute for Humanistic Studies, which convenes business executives and others to discuss world problems. He helped found the Worldwatch Institute in Washington to monitor global environmental trends, the International Institute for Environment and Development in London to study environmental and food issues and the John Muir Institute of the Environment in Davis, Calif. Mr. Anderson veered from corporate stereotypes, not least because he liked to wear a Stetson and bow tie. He bought and sold one of the most highly regarded makers of cowboy boots; a grain-trading operation; much of downtown Aspen, Colo.; and banks, steakhouses, ski areas and a bowling alley. Beginning in 1957, he assembled a farming and ranching enterprise exceeding a million acres, rivaled only by the renowned King Ranch. He, David Rockefeller and another partner once owned another million acres in Brazil. Mr. Anderson at his peak ran as many as 30,000 head of cattle and 12,000 sheep on ranches in three states. His collection of Arabian, thoroughbred and quarter horses was large and admired. He became one of the largest collectors of Indian art. Robert Orville Anderson was born in Chicago on April 13, 1917, to the Swedish immigrants Hugo A. Anderson and the former Hilda Nelson. Hugo was a prominent banker who, Robert said, was one of the first to lend money against proven but untapped oil reserves. The boy was entranced by his father’s stories about oil-patch wildcatters, Kenneth Harris wrote in his biography, “Wildcatter” (1987). Robert attended the Laboratory Elementary and High Schools of the University of Chicago and went on to a two-year college program at the university, majoring in economics. During summers, he worked on pipelines in Texas. His goals shifted from architecture to petroleum, and he pored over geology and engineering books to educate himself. After graduating in 1939, he worked for the American Mineral Spirits Company, a subsidiary of Pure Oil. In 1941, his father helped him and his brothers buy a refinery in New Mexico. Mr. Anderson soon persuaded the Army Air Corps that he could deliver 91-octane fuel. His employees had never produced it, and there was a 31-day deadline. It was met, Mr. Harris wrote. Over the next 15 years, he bought and improved other refineries in the Southwestern states. He also began wildcatting for new fields, and in 1957 discovered the large Empire-Abo field in southeastern New Mexico. He was not always so lucky: he passed up a lease in Colorado offered for $90,000 that eventually yielded 400 million barrels of oil.



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