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BP plc (BP.B) Risk Analysis
Risk Overview Q4, 2024
Source: the company's latest filing for the period ended Dec 31, 2024, filed Mar 06, 2025
Risk Change Over Time
- Employment / Personnel - Risk 1Talent and capability: inability to attract, develop and retain people with necessary skills, capabilities and behaviours could negatively impact delivery of our strategy.
The sectors in which we operate face increasing challenges to attract and retain diverse, skilled and capable talent. An inability to successfully recruit, develop and retain core skills and capabilities and to reskill existing talent could impact delivery of our strategy.
- Costs - Risk 2Prices and markets: our financial performance is impacted by fluctuating prices of oil, gas and refined products, technological change, climate policies and regulations, exchange rate fluctuations, and the general macroeconomic outlook.
Oil, gas and product prices are subject to international supply and demand and margins can be volatile. Political developments, fluctuations to the supply of either oil or natural gas or to alternative low carbon energy sources, technological change, global economic conditions, public health situations (including the outbreak of an epidemic or pandemic), the introduction of new (or amendment to existing) carbon costs and the influence of OPEC+ can impact supply and demand and prices for our products (including low carbon investments). Decreases in the price of energy outputs we produce could have an adverse effect on revenue, margins, profitability and cash flows. If these reductions are significant or for a prolonged period, we may have to write down assets and reassess the viability of certain projects, which may impact future cash flows, profit, capital expenditure«, the ability to work within our financial frame and maintain our longterm investment programme. Conversely, an increase in the prices of the energy outputs we produce may not improve margin performance as there could be increased fiscal take, cost inflation and more onerous terms for access to resources. The profitability of our refining activities can be volatile, with periodic oversupply or supply tightness in regional markets and fluctuations in demand. Exchange rate fluctuations can create currency exposures and impact underlying costs and revenues. Crude oil prices are generally set in US dollars, while products vary in currency. Many of our major project« development costs are denominated in local currencies, which may be subject to fluctuations against the US dollar.
Risk Highlights Q4, 2024
Risk Word Cloud
Risk Factors Full Breakdown - Total Risks 20
- Manufacturing - Risk 1Product quality: supplying customers with offspecification products could damage our reputation, lead to regulatory action and legal liability, and impact our financial performance.
Failure to meet product quality specifications could cause harm to people and the environment, damage our reputation, result in regulatory action and legal liability, and impact financial performance.
- Manufacturing - Risk 2Process safety, personal safety, and environmental risks: exposure to a wide range of health, safety and environmental risks could cause harm to people, the environment and our assets and result in regulatory action, legal liability, business interruption, increased costs, damage to our reputation and potentially denial of our licence to operate.
Process safety, personal safety, and environmental risks: exposure to a wide range of health, safety and environmental risks could cause harm to people, the environment and our assets and result in regulatory action, legal liability, business interruption, increased costs, damage to our reputation and potentially denial of our licence to operate. Technical integrity failure, natural disasters, extreme weather or a change in its frequency or severity, human error and other adverse events or conditions, including breach of digital security, could lead to loss of containment of hazardous materials, including hydrocarbons«. This could also lead to fires, explosions or other personal and process safety incidents when drilling wells, constructing and operating facilities; in addition to activities associated with transportation by road, sea or pipeline. There can be no certainty that our OMS or other policies and procedures will adequately identify all process safety, personal safety and environmental risks or that all our operating activities, including acquired businesses, will be conducted in conformance with these systems. Such events or conditions or inability to provide safe environments for our workforce and the public while at our facilities, premises or during transportation, could lead to injuries, loss of life or environmental damage. As a result, we could face regulatory action and legal liability, including penalties and remediation obligations, increased costs and potentially denial of our licence to operate. Our activities are sometimes conducted in hazardous, remote or environmentally sensitive locations, where the consequences of such events or conditions could be greater than in other locations.
- Manufacturing - Risk 3Drilling and production: challenging operational environments and other uncertainties could impact drilling and production activities.
Our activities require high levels of investment and are sometimes conducted in challenging environments such as those prone to natural disasters and extreme weather, which heightens the risks of technical integrity failure. The physical characteristics of an oil or natural gas field, and cost of drilling, completing or operating wells are often uncertain. We may be required to curtail, delay or cancel drilling operations or stop production because of a variety of factors, including unexpected drilling conditions, pressure or irregularities in geological formations, equipment failures or accidents, adverse weather conditions and compliance with governmental requirements.
- Manufacturing - Risk 4Accessing and progressing hydrocarbon resources and low carbon opportunities: inability to access and progress hydrocarbon resources and low carbon opportunities could adversely affect delivery of our strategy.
Delivery of our strategy depends partly on our ability to progress hydrocarbon resources from our existing portfolio and access new resources. Our ability to progress upstream« resources and develop technologies at a level in line with our strategic outlook for hydrocarbon production could impact our future production and financial performance. Furthermore, our ability to access low carbon opportunities and the commercial terms associated with those opportunities could impact our financial performance while moving at pace with society and its changing wants and needs.
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