Managing Risk From Site To Board, BP Holdings barcelona BP’s risk management process is designed to help ensure that risks are identified, understood and managed so that we can deliver safe and strong operations We initiated a review of our risk management system in 2011 to identify what might be done to enhance the clarity, simplicity and consistency of our system, and have begun implementing enhancements. Our system is designed to generate consistent reporting of risks and prioritization of risk mitigation plans by our businesses, including for low-probability, potentially high-consequence scenarios. Our enhanced risk management system focuses on three levels of activity: Day-to-day risk identification and management occurs in the group operations and functions, with the approach varying according to the types of risk we face. We assess and manage these day-to-day risks with reference to our operating management system (OMS) and agreed action plans. Periodic collation and review of risks and risk management plans happens at the business and functional level, including major accident risk and other potentially high-consequence risks. Oversight and governance occurs at board, executive and function levels to help foster effective group-wide oversight, business planning and resource allocation, intervention and knowledge sharing. Restructuring to reduce our operational risk We have made significant structural changes to the way we run our business since the tragic accident in the Gulf of Mexico. The upstream business has been reorganized into three divisions (exploration, developments and production). This creates greater clarity and accountability, as well as bringing specialists together into teams where they can build their capability. For example, we have changed the way that our wells across the world are run, bringing them all under the management of one global organization. We have adopted a similar management strategy for all our global upstream projects. In addition, we have introduced an independent safety and operational risk function. It issues company-wide safety and operational risk standards, through our operating management system. It provides an independent view of risk and, it can escalate or intervene as necessary to promote the operating businesses’ application of global standards on safety and operational risk.

1. BP HOLDINGS
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2. MANAGING RISK FROM SITE
TO BOARD
BP’s risk management process is designed to help ensure that risks
are identified, understood and managed so that we can deliver safe
and strong operations
We initiated a review of our risk management system in 2011 to
identify what might be done to enhance the clarity, simplicity and
consistency of our system, and have begun implementing
enhancements. Our system is designed to generate consistent
reporting of risks and prioritization of risk mitigation plans by our
businesses, including for low-probability, potentially high-
consequence scenarios.

3. Our enhanced risk management system focuses on three levels of
activity:
Day-to-day risk identification and management occurs in the group
operations and functions, with the approach varying according to
the types of risk we face. We assess and manage these day-to-day
risks with reference to our operating management system (OMS)
and agreed action plans.

4. Periodic collation and review of risks and risk management plans
happens at the business and functional level, including major
accident risk and other potentially high-consequence risks.
Oversight and governance occurs at board, executive and function
levels to help foster effective group-wide oversight, business
planning and resource allocation, intervention and knowledge
sharing.

5. Restructuring to reduce our operational risk
We have made significant structural changes to the way we run our
business since the tragic accident in the Gulf of Mexico.
The upstream business has been reorganized into three divisions
(exploration, developments and production). This creates greater
clarity and accountability, as well as bringing specialists together
into teams where they can build their capability.

6. For example, we have changed the way that our wells across the
world are run, bringing them all under the management of one
global organization. We have adopted a similar management
strategy for all our global upstream projects.
In addition, we have introduced an independent safety and
operational risk function. It issues company-wide safety and
operational risk standards, through our operating management
system. It provides an independent view of risk and, it can escalate
or intervene as necessary to promote the operating businesses’
application of global standards on safety and operational risk.