BP, with a tagline “Beyond Petroleum”, is a company that centers its primary goals in terms of meeting the incessantly heightening demand for fossil fuels, product advancement and transitioning to a lower carbon future. BP learnt some indispensable lessons from the Gulf War when its expansive strategies were undermined.
The lessons have since resulted into spectacular success through efficient investments, which have proved worthy, both in short and long term while also ensuring that the company has access to growth markets while being able to maximize value chains and reduce costs.
In reference to cost cutting and efficient investment, BP in order to reduce costs which was greatly being incurred in wood burning and the use of electricity, BP has resorted to using solar power. Notably, it is always encouraged that financial leadership goals must be in line with company values which in this case are mutual advantage, environmental care and constructive engagement when a company wants to cut costs.
In order to achieve these, long and short term goals such as maximization of value chains flexibility and judgments are essential as a result of imposed external events. BP is also in the process of developing a technology to capture and store carbon dioxide.
The company officials believe that carbon capture and storage is an overly pertinent contribution in light of the growing need to tackle carbon emission. Also notable is the BP’s 10 point plan which can be viewed as a unique aspect of the financial strategies used by BP.
BP’s 10 point plan to increase value in transparency for its shareholders is in measure to its strengths which include gas value chains, technology, relationships, giant fields and deep water. The 10-point plan also strives to build a stronger and safer company which will in turn guarantee a sustainable value for the company.
These strategies measure active portfolio management of investors, they also give insight to whether there is strong balance sheet with gearing which refers to the groups net debt plus equity in the lower half of the 10-20% range, for re-investment purposes half of incremental operating cash to be used while the other half for other purposes, new upstream projects on-stream with unit operating cash margins double the 2011 average (constant oil price $100 per barrel) and lastly generate around 50% more annually in operating cash (Dudley 1).
Statements of directors’ responsibilities, consolidated financial statements and notes on the same, unaudited supplementary information on oil and natural gas, board performance reports whose primary focus is to provide guidance, resources and support required by the organization are all clear proofs that the company has been able to manage its finances effectively.
Nonetheless, the annual reports on management, shareholders, directors and senior management as well as competent and skilled employees and management also prove this (BP 1). The proof can be further extracted from emphasis on creating value in a harsh environment which underlines all of BPs activities.
However, there is a need for the company to make some adjustment to the statement of the directors’ responsibilities. It can be noted that the statements of the accounts which give an impartial view to state of affairs.
In the same light, the relevant notes on accounts, independent auditors report which provides evidence against inadequate representation of fact through fraud or any other errors, adherence to accounting policies and standards and procedures (BP 1).
References
BP. “Performance For All Our Futures.” BP. n.d. Web.
BP. “BPs Business Strategy.” BP. n.d. Web.
Dudley, B. “Refining & Marketing: Delivering a world class downstream business”. Web.