These excerpts taken from the BP 6-K filed Jul 28, 2009.
Principal risks and uncertainties
The principal risks and
uncertainties for the remaining six months of the financial year remain as set out
Annual Report and Accounts
We urge you to consider carefully the
risks described below. If any of these risks occur, our business, financial condition and
results of operations could suffer and the trading price and liquidity of our securities
could decline, in which case you could lose all or part of your investment.
In the current global financial crisis
and uncertain economic environment, certain risks may gain more prominence either
individually or when taken together. Oil and gas prices and margins are likely to remain
lower than in recent times due to reduced demand; the impact of this situation will also
depend on the degree to which producers reduce production. At the same time, governments
will be facing greater pressure on public finances leading to the risk of increased
taxation. These factors may also lead to intensified competition for market share and
available margin, with consequential potential adverse effects on volumes. The financial
and economic situation may have a negative impact on third parties with whom we do, or may
do, business. Any of these factors may affect our results of operations, financial
condition and liquidity.
If there is an extended period of
constraint in the capital markets, with debt markets in particular experiencing lack of
liquidity, at a time when cash flows from our business operations may be under pressure,
this may impact our ability to maintain our long-term investment programme with a
consequent effect on our growth rate, and may impact shareholder returns, including
dividends and share buybacks, or share price. Decreases in the funded levels of our pension
plans may also increase our pension funding requirements.
Our system of risk management provides
the response to risks of group significance through the establishment of standards and
other controls. Inability to identify, assess and respond to risks through this and other
controls could lead to an inability to capture opportunities, threats materializing,
inefficiency and non-compliance with laws and regulations.
The risks are categorized against the
following areas: strategic; compliance and control; and operational.
Principal risks and