British Petroleum (BP ) Management Planning

1. British Petroleum (BP) Management Planning Matthew J. McKinnis MGT/230 Management Theory And Practice August 20, 2012 Angela Guest

2. Values and Visions Missions and Goals • Core values of BP are Safety, Respect, Excellence, and Courage. • Produce energy that is affordable, secure and doesn’t harm the environment. • A great company that is successful and make a difference in the society. • Progressive, responsible, innovative, and performance driven.

3. The Team • Bod Dudley, Chief Executive Officer; 30 years of experience. • Mark Bly, Executive VP, Safety & Operational Risk ; 26 years of experience. • Brian Gilvary, Chief Financial Officer ; 20 years of experience. • Iain Conn, Chief Executive, Refining and Marketing ; 20 years of experience • BP Accomplishments. -- Sustainable Biofuels 2009 Awards for developing a fuels to change the market. -- U.S. Environmental Protection Agency (EPA) 2010 award for improved performance and reducing emissions. -- U.S. Department of Energy (DOE) Clean Energy Award 2011 for producing clean fuels and energy.

4. Legal Issues Ethics Corporate Responsibility Corporate Social Responsibility

5. Legal Issues • South America’s Pan American Energy deal derail • $7 Billion deal collapsed from China’s largest offshore oil producer. • BP did not obtaining Argentine anti-trust and Chinese regulatory approvals. • Deep water Horizon oil spill -- Company's liability for negligence to communities affected by OPA is capped at $75 million. -- Class action lawsuits in state or federal court by individuals.

6. Ethics • Fulfill professional responsibilities with honesty and integrity --- OPA cap is $75 million for negligence; BP has paid $4.7 billion to claimants • Support the principle of due process and protect the civil and human rights of individuals • Obey local, state, and national laws and will not knowingly join or support any organization that advocate, directly or indirectly, the overthrow government • Avoid conflict of interest and will not use their position for personal gain through political, social, religious, economic, or other influence • Honor all contracts until fulfillment or legal release • Acknowledge that the system is accountable to the taxpayer • Maintain the standards and seek to improve effectiveness through research and continuing professional development

7. Corporate Social Responsibility • Strives to be a force for good and a force for human advancement in every country we operate. • A responsible global citizen, earning the confidence and support of its employees and partners. ---Within days BP set up a $20 billion fund to compensate local business • Pursues responsible development in its social and environmental engagement in the communities where we operate, investing its resources in its core competencies

8. Controlling Planning Planning Function Of Management Organizing Leading

9. BP 5-Point Plan to Build A Stronger and Safer BP • Exploration of 15 new wells per year. • 15 Major Upstream Project Start-Ups • 8 Rigs operating in the Gulf of Mexico by 2014 • Operating cash flow to increase by 50% in 2014 • Organic capital expenditures increase to $22 Billion

10. Organizing BP Business Plan • Exploration of 15 new wells per year --Utilize a 3D Eco Green seismic surveys process which is 50% less to operate and safer for the environment --Utilize new sniffer technology which sniffs molecular signatures of hydrocarbons floating in the air at 10 parts per trillion • 15 Major Upstream Project Start-Ups -- Over hall balance of factors that have an impact on a development and reduce CAPEX/OPEX costs while maintaining a realistic development schedule and producing safe/environmentally solutions -- Reestablish partnership with Foster Wheeler; they have the new solutions for today’s upstream challenges • 8 Rigs operating in the Gulf of Mexico by 2014 -- Install new 30”, 3,000-psi Blowout Preventer to cut through pipe in the well and seal it off in an emergency --Change to biodiesel to fuel diesel engines; exhaust fumes are much cleaner smelling than regular diesel and environment friendly • Operating cash flow to increase by 50% in 2014 -- New 3D Eco Green seismic surveys process will save $60 million per well by the 30 wells supported -- New sniffer technology would increase profits by $100 million per year • Organic capital expenditures increase to $22 Billion -- Expenditures for 2012 including acquisitions and capital leases are estimated to be around $17 billion -- Organic capital to increase around another $10 billion due to new 3D Eco Green seismic surveys and sniffer technology

11. Mobilizing Business Plan • Exploration of 15 new wells per year (Mr. Iian Conn) --Utilize a 3D Eco Green seismic surveys process which is 50% less to operate and safer for the environment --Utilize new sniffer technology which sniffs molecular signatures of hydrocarbons floating in the air at 10 parts per trillion • 15 Major Upstream Project Start-Ups (Mr. Iian Conn) -- Over hall balance of factors that have an impact on a development and reduce CAPEX/OPEX costs while maintaining a realistic development schedule and producing safe/environmentally solutions -- Reestablish partnership with Foster Wheeler; they have the new solutions for today’s upstream challenges • 8 Rigs operating in the Gulf of Mexico by 2014 (Mark Bly) -- Install new 30”, 3,000-psi Blowout Preventer to cut through pipe in the well and seal it off in an emergency --Change to biodiesel to fuel diesel engines; exhaust fumes are much cleaner smelling than regular diesel and environment friendly • Operating cash flow to increase by 50% in 2014 (Mr. Brian Gilvary) -- New 3D Eco Green seismic surveys process will save $60 million per well by the 30 wells supported -- New sniffer technology would increase profits by $100 million per year • Organic capital expenditures increase to $22 Billion (Mr. Bod Dudley) -- Expenditures for 2012 including acquisitions and capital leases are estimated to be around $17 billion -- Organic capital to increase around another $10 billion due to new 3D Eco Green seismic surveys and sniffer technology

12. Controlling the Business Plan All items associated with new Business Plan will be evaluated by Mr. Bod Dudley prior to convening a board meeting. • Exploration of 15 new wells per year (Mr. Iian Conn); will meeting every Monday for review • 15 Major Upstream Project Start-Ups (Mr. Iian Conn) ); will meeting every Tuesday for review • 8 Rigs operating in the Gulf of Mexico by 2014 (Mark Bly) ); will meeting every Wednesday for review • Operating cash flow to increase by 50% in 2014 (Mr. Brian Gilvary) ); will meeting every Thursday for review The Board will convene the first and third Friday of each Month for a quality review of the whole project.

13. Upstream (Strategic Planning) Alternative Energy (Operational Planning) Influence of Management Refining and Marketing (Contingency Planning)

14. UPSTREAM: (Strategic Planning) • Deepen functional expertise, standardize the way we do business and, in doing so, leverage our strengths globally. • Create three distinct Divisions; Exploration, Developments and Production. Each led by an Executive Vice President reporting directly to Bob Dudley. • Developments Division there are two "Technical Functions"- the Global Wells Organization and the Global Projects Organization. • Strategy and Integration organization, led by a fourth Executive Vice President, hosts our "Business Functions" (including HR, Finance, IT and Technology) and ensures integration across the Divisions and Functions

15. ALTERNATIVE ENERGY: (Operational Planning) • Identify problems and opportunities. • Transition to a Global Bio-Economy • Construct Wind Farm -- $800 million wind farm development in Kansas • Become the biggest generators of wind power in U.S. -- 1,000 Wind Turbines spinning in Texas.

16. REFINING AND MARKETING: (Contingency Planning) • Converting crude oil into fuels, lubricants and petrochemicals, then transporting and selling these products to customers around the world. • Markets them to customers in more than 70 countries. • Transporting to 70 countries without spillage. • Maintaining 30 refinery throughout 12 countries. • Producing over 21 million barrels per year.

17. Summary • Values, Vision, Mission, and Goals • Planning Functions of Management -- 5-Point Plan to Build a Stronger and Safer BP -- Organizing -- Leading -- Controlling: Learning and Changing • Corporate Responsibility -- Legal -- Ethics -- Corporate Social Responsibility • Influence of Management -- Upstream: (Strategic Planning) -- Alternative Energy: (Operational Planning) -- Refining and Marketing: ( Contingency Planning)