bp in new zealand

BP in New Zealand

Sustainability Report 2004

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2 BP in New Zealand

1 From the managing director

3 BP – our business

4 A sustainable approach to business reporting

5 BP at a glance 6 Financial performance,

the BP New Zealand network 8 The facts about fuel pricing10 Our people12 Health and safety performance16 Future Fuels case study

17 BP and the environment

18 Environmental performance22 Bio-diesel23 Liquid Natural Gas24 Dairy Flat: environment case study

26 BP in society

27 BP in the community29 BP’s continued support of Surf

Lifesaving New Zealand30 BP and the world’s toughest

yacht race31 Who BP works with32 Saturn tanks: a new approach

to community consultation34 URS New Zealand Limited

Verification Statement

37 Provide us with your feedback

Performance highlightsOur BP

• BP sold 2.19 billion litres of fuel and lubricants.

• BP made investments in New Zealand totalling $26 million.

• BP made an average return on capital employed of 12%.

• BP directly employed 1,740 people in its company-owned service stations,

operations and offices.

BP and the environment

• BP opened its new Dairy Flat service station with what is believed to be the

largest solar canopy in Australasia and state-of-the-art rainwater collection and

sewage treatment systems.

• BP was nominated as a finalist in the Deloitte/Management Magazine top

200 Business Awards for its commitment to sustainability reporting and

cleaner fuels.

• BP’s new office recycling and waste management system reduced Head

Office waste to landfill by 70%, or around six tonnes per annum.

• Using a range of heavy vehicles, BP successfully conducted extensive trials

in New Zealand of bio-diesel made from tallow.

• The accident rate involving light BP vehicles dropped from five in 2003

to just one in 2004.

• BP’s lubricant production centre in Auckland marked 14 years of operation

without a single injury requiring time away from work.

BP in the community

• BP made donations to more than 230 community organisations.

• BP continues to offer eligible staff three months’ paid parental leave, which is

additional to statutory requirements.

• BP’s sponsorship support for Surf Life Saving New Zealand entered its 37th year.

• At BP service stations around New Zealand, Tsunami Relief Fund collection

boxes collected more than $950,000 in donations, in conjunction with an 0900

phone number. BP New Zealand staff donated more than $11,000, BP staff

internationally donated US$1.6 million and the BP Group donated US$4.6 million.

• BP paid $53.7 million in wages.

Unless otherwise stated ‘BP’, ‘We’ and ‘Our’ refer to BP Oil New Zealand Limited.

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From the managing directorWelcome to BP New Zealand’s Sustainability Report for 2004.

BP has been producing these reports since 2002 in an ongoing effort to measure

and continually improve the company’s performance across all areas of operation –

in particular our environmental, our social and our financial performance.

It is no longer good enough for companies to remain solely focused on the

financial bottom line. Increasingly the public, our customers, want to know that

they are supporting a business which not only sells the highest-quality products,

but which goes out of its way to protect its staff and the communities and

environment in which it operates.

Customers are demanding more accountability and transparency from business,

and this is a challenge that BP remains committed to meeting. This Report is an

example of this commitment in action – it provides an honest look at the key areas

of BP’s business and shows what we have done well and what we can do better.

This Report also reflects the issues that were of most interest and/or concern

to our range of stakeholders over the year.

For BP, and for the global energy industry, 2004 was a year which threw up a

number of challenges. Record levels of global economic growth, driven particularly

by large developing countries such as China, significantly increased the global

demand for hydrocarbon fuels and for energy in general.

Following such strong economic growth, the increased demand saw prices for

crude oil regularly hitting record levels of more than US$50 per barrel. Oil is a

commodity which is traded in US dollars on international markets, and a country

which doesn’t produce its own oil is at risk of the fluctuations in the international

benchmark price.

New Zealand has been no exception. Over 2004, the price of a barrel of

Brent Crude oil ranged between a low of US$29 and a high of US$52,

representing a variance of 80% in just one year.

On average, the price of a barrel of oil traded 33% higher in 2004 than in 2003.

This Report provides some detail on the factors that determine domestic fuel

prices, but a key determinant will always be the international trading price of crude oil.

I believe 2004 was a year which heralded a significant international shift in the

value of oil-based products. As demand for oil and fuel continues to increase, so too

does its value. While the world’s existing oil reserves are still significant, and new

discoveries continue to be made, the days of cheap fuel appear now to be behind us.

The new challenge for the world’s energy industry is to continue providing the

energy that people need, while at the same time preparing for a fundamental

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... from the managing director (continued)

shift towards new fuels and new climate-friendly technologies.

The companies that lead this transition and invest in new, cleaner energy

technologies will be among the most successful companies of this century.

BP is already investing heavily in preparing to lead the energy sector into the

next generation of fuels. This Report provides an overview of some exciting trials

that BP is conducting with renewable bio-fuels in Auckland, profiles environmental

initiatives at our new Dairy Flat site and looks at major new investments to

enable the production of cleaner fuels.

This Report also examines the role that imported Liquified Natural gas (LNG)

could play in helping New Zealand make the transition towards cleaner and more

sustainable energy generation.

And perhaps most importantly, this Report measures the impact of our

operations on the natural environment and the contribution that BP makes

to the communities and the people we serve.

I want to take this opportunity to thank every member of the BP team for

making 2004 such a successful and safe year. Many of the challenges that

presented themselves in 2004 were also opportunities for us, and I am proud

to lead such a capable, talented and committed team in working to make

the most of them.

Peter Griffiths

Managing Director

BP Oil New Zealand Limited

11 July 2005


Sustainability Report 2004 3

1BP – our business1.1 A sustainable approach to business reporting

1.2 BP at a glance

1.3 Financial performance, the BP New Zealand network

1.4 The facts about fuel pricing

1.5 Our people

1.6 Health and safety performance

1.7 Future Fuels case study


4 BP in New Zealand

Businesses are fast learning that

the manner in which they interact

with the community and the natural

environment can have a direct bearing

on their financial performance.

Customers wanting to buy fuel

for their car, for example, may

want to know that the company

selling it has worked in partnership

with the community where the

product originated, has treated its

staff well and strives to protect

people and the natural environment

in the course of its business.

To this end, the advent of

sustainability reporting is a victory

for consumers.

With an increasingly competitive

marketplace, consumers can often

buy similar products at similar prices

from a range of different suppliers.

The challenge that BP is embracing

is to differentiate our products on the

grounds of quality and to continue

to earn the trust of our customers.

BP is committed to three simple

but important operational goals –

no accidents, no harm to people and

no damage to the environment. This

Report measures BP’s performance in

each of these areas, and against the

issues of most concern, or interest,

to our range of stakeholders.

Social performance

• What role does BP play in the

community and how does the

company interact with people?

• How does BP perform in its

interaction with all of its key

stakeholders including staff,

suppliers, government and

non-government organisations,

contractors and customers?

• How successful is BP in meeting its

goals of no accidents and no harm

to people and what steps is BP

taking to achieve these goals?

Environmental performance

• What impact do BP’s operations

have on the New Zealand

environment?

• What processes and systems are

in place to help meet BP’s goals

of no damage to the environment,

and how successful are they?

Financial performance

• How well has BP performed

financially over 2004?

• What contribution has BP made

both to its shareholders and to

the New Zealand economy?

BP’s business principles Underpinning

these three areas are principles that

govern all of BP’s business operations

around the world. In all of our actions

and our dealings with others, BP

commits to:

• Respect the rule of law.

• Promise only what we expect to

deliver, make only commitments

we intend to keep, not knowingly

mislead others and not participate

in or condone corrupt or

unacceptable business practices.

• Fulfil our obligations and

commitments, treat people

according to merit and contribution,

refrain from coercion and never

deliberately do harm to anyone.

• Act in good faith, use company

assets only for furthering company

business and not seek personal

gain through abuse of position

in the company.

We expect the same commitments

from all third parties directly

acting on BP’s behalf.

Additionally, wherever BP has

control or influence, it will:

• Consult, listen and respond openly

to customers, neighbours and

public interest groups.

• Work with others – partners,

suppliers, competitors and

regulators – to raise the standards

of the industry.

• Openly report on the company’s

health, safety and environment

(HSE) performance, good and bad.

• Recognise those who contribute

to improved HSE performance.

1.1 A sustainable approach to business reportingReporting on the steps businesses are taking towards sustainability has

become more common as consumers become more discerning about the

companies they choose to support.



BP worldwide Since it was established

in 1909, BP has grown into one of the

world’s largest energy companies.

Internationally, BP:

• Employs 102,900 people across

more than 100 countries.

• Has more than 1.2 million

shareholders.

• Has discovered more oil and gas

reserves than it extracted, for

the 12th consecutive year.

• Sold just under seven million

barrels of refined fuels per day.

• Served around 13 million retail

customers every day.

• Owns or part-owns 23 refineries.

• Produces oil or gas in 23 countries.

• Has proved reserves of 18.3 billion

barrels of oil and gas equivalent

(approximately 55% oil, 45% gas).

• Produces 2.5 million barrels of crude

oil and 8.5 billion cubic feet

of natural gas per day.

• Is one of the world’s leading

producers of photovoltaic solar cells.

• Is building expertise in the area of

wind energy and is implementing

wind energy projects on BP sites.

• Is reducing its carbon emissions.

In 1998, BP set itself the target of

reducing its own carbon emissions

to 1990 levels by 2010. BP achieved

this in 2001, nine years earlier than

expected.

BP in New Zealand BP has been

operating in New Zealand since 1946

– primarily as a seller of fuels and

lubricants and, more recently, as a

convenience retailer. BP New Zealand:

• Employs 1,331 New Zealanders in

82 company-owned service stations.

• Trades through a network of 234

BP-branded service stations which

are owned by independent operators

who employ their own staff.

• Operates 46 Wild Bean Cafés in

its Connect Service Stations.

• Has grown into one of New Zealand’s

leading coffee retailers, by volume.

• Holds a 25% shareholding in

Silver Fern Shipping Limited

– New Zealand’s coastal fuel

shipping company.

• Holds just under a 24%

shareholding in the New Zealand

Refining Company.

• Operates 16 service stations with

photovoltaic solar canopies.

• Has been a main sponsor of

Surf Life Saving New Zealand

for 37 years.

• Invested $26 million in New Zealand

in 2004.

• Sold 2.19 billion litres of fuel and

lubricants (all grades) to retail,

commercial aviation and marine

customers.

• Runs a fleet of 55 trucks – 29 leased

by BP, 20 of which are owned by

agents, and six others including

lubricant tankers.

• Has financial interests in nine fuel

terminals around the country.

• Supplies aviation fuel to more than

90 locations in New Zealand.

BP’s Corporate Responsibility Framework

In 2004 BP developed a new Corporate

Responsibility Framework which helps

clarify BP’s relationship with society.

In responding to risks and challenges

in our business, BP recognises the

need to act responsibly. At its most

fundamental level, this means obeying

the law – complying with the numerous

laws and regulations in each country

where BP operates. It also means

being a progressive operator, behaving

consistently and in accordance with our

Group values to guide our performance

and our behaviour in respect of people,

health, safety, the environment, and

external relationships.

Legal compliance and being a

progressive operator are aspects of

what we term ‘responsible operations’.

They lie within our ‘sphere of control’,

where we control the choices made

and are accountable for the outcomes.

At a further level, being responsible

prompts us to play our part in helping

to solve global challenges that are

directly relevant to our long term

business strategy. The difference

here is that we clearly do not control

outcomes – responsibility is shared

– so we work with governments,

business partners and civil society,

using our skills and resources to deliver

better outcomes for society. Our most

obvious example is climate change but

we are also engaged in community

projects, especially education, and

in promoting good governance.

1.2 BP at a glance

BP – our business


6 BP in New Zealand

1.3 Financial performance, the BP New Zealand networkIn order for a business to promote sustainability, it must itself be

sustainable on a financial basis.

The Turnover, Net Investment and

Historic Cost Net Profit figures

for 2001–2004 are sourced from

the company’s published financial

statements, audited by Ernst and

Young. The Return on Average

Capital Employed is calculated on

a replacement cost basis. That

measure and the amount of New

Capital invested are sourced from

BP’s internal management reports.

In order to grow our business, BP is

continually reinvesting in New Zealand.

Over the last five years, BP has

invested $153 million in its business

in New Zealand, with $26 million

of new investment in 2004. BP’s

net investment in New Zealand

in 2004 was $538 million.

Job creation BP New Zealand has a

network of around 330 BP-branded

service stations across the country.

Currently 82 are owned and

operated by BP and 234 are

privately owned and operated. Of

those privately owned businesses,

75 are run by a BP agent.

Wholesale agreements The oil industry

has been through many changes over the

last 20 years, particularly since

Turnover Graph (NZ$ million)

2001 2002 2003 20041,000

1,250

1,500

1,750

2,000

2001 2002 20032001 2002 2003 20042004

BP New Zealand performance indicators

Turnover (NZ$ million) 1,536 1,502 1,739 1,964

Net investment in New Zealand (NZ$ million) 466 455 468 538

Historic cost net profi t – after tax (NZ$ million) 17 35 23 54

Return on average capital employed (%) 16 13 15 12

New capital invested during the year (NZ$ million) 47 24 32 26

2001 2002 20032001 2002 2003 20042004

Number of staff employedNumber of staff employed

Non service station 272 267 251 409

Service station 1,015 1,124 1,268 1,331

Total 1,287 1,391 1,519 1,740

Over 2004 BP paid the following in wages:

Wages paid toWages paid to

BP company-owned service station staff (NZ$ million) 26.8Offi ce staff (including Head Offi ce) and the Auckland Lubricant Production Centre (NZ$ million) 24.5Contractors, airport staff (NZ$ million) 2.4Total 53.7



deregulation in 1988. The industry has

gone from four different fuel retailing

brands to 10; from more than 4,000

service stations to fewer than 1,400

and from small shops to larger

convenience stores.

BP New Zealand has not been

exempt from these changes –

the introduction of our network

of Connect and 2GO stores and the

commencement of two sizeable

wholesale fuel agreements (to other

retail brands) have significantly

changed the face of our business.

BP’s first major wholesale fuel

agreement to another retail brand was

to Foodstuffs, which launched fuel sales

under the Pak ‘N Save and New World

brands. Under this agreement, BP

New Zealand supplies fuel direct to each

site and it is sold to the public under the

Pak ‘N Save and New World brands.

At the end of 2004, there were

15 Pak ‘N Save fuel outlets and

one New World fuel outlet in

operation around New Zealand.

BP has a wholesale fuel agreement

with the independent service station

network Gasoline Alley Services (g.a.s.)

to supply all of its fuel and lubricants.

This agreement also provided an option

for a number of BP independently

owned service stations to transfer

to the g.a.s. brand.

g.a.s. is 100% focused on

independent owner-operators, and has

a network of 69 independently owned

and operated service stations around the

country. BP New Zealand’s involvement

in the supply of wholesale fuel and

lubricants also gives these operators

the confidence of knowing they have

a guaranteed quality of supply.

The g.a.s. offer represents an

opportunity for BP to grow our

overall fuel volumes while providing

a strong alternative opportunity

for our smaller independent

operators to grow and survive in an

extremely competitive market.

Independent network Independently

owned BP service stations make up

three-quarters of the BP branded

network. These service stations must

meet BP New Zealand’s standard for

product and service. This ensures that

all our customers receive consistently

high standards of products and

service. Owner-operators have the

independence of a small business with

the support and experience of a major

fuel distributor.

Example: BP 2GO™ The BP 2GO offer

– a modern convenience store offer

with fuel – has been successfully

developed as a concept over the

last four years.

The BP 2GO model is used in

independently owned BP sites.

At the end of 2004, 49 BP 2GO

sites were operational throughout

New Zealand. A further 30 conversions

to 2GO are expected in 2005.

The BP 2GO offer allows

independent dealers to expand into

the convenience market, improving

non-fuel income, helping to future-

proof and protect their businesses.

Independent dealers are also

able to improve their margins

through improved buying terms and

better rebates from suppliers.

With a substantial percentage of

BP New Zealand’s branded retail fuel

being sold through independently owned

outlets, the success of these sites is

very important to BP New Zealand’s

overall business. The BP 2GO offer

goes a long way towards supporting

independent sites through diversification

at a time when the fuels market is

highly competitive and there is a great

deal of pressure on fuel margins.

BP 2GO is a successful modern

brand, which continues to grow

at a startling rate. More and more

consumers will be able to grab a

coffee, a tasty pie or sandwich and

their other convenience items while

on the go in the very near future.

BP – our business


8 BP in New Zealand

We all drive motor vehicles, or at least

depend on them for our personal

travel, and we all notice when the

price of fuel increases. 2004 saw the

price for domestic fuel hit record levels

as a result of an extremely volatile

international market for crude oil.

Given that these higher prices

affect us all, it is important to set

out here the factors which, when

combined, determine how much

we all pay to fill up our cars.

Crude oil Crude oil is the base product

which, when refined, produces

New Zealand’s three staple fuels

– petrol, diesel and jet fuel. A significant

amount of the world’s crude oil, around

40%, is produced from countries

belonging to the Organisation of the

Petroleum Exporting Countries, or

OPEC.

The 11 member nations of

OPEC are Iran, Iraq, Kuwait, Saudi

Arabia, Venezuela, Qatar, Indonesia,

Libya, the United Arab Emirates,

Algeria and Nigeria. The bulk of

New Zealand’s crude oil is imported

from the Middle and Far East.

Crude oil is traded on the

international market in US dollars

and, like all commodities, is subject

to supply and demand pressures.

Where there are constraints in

supply and/or an increase in demand,

the price the market is prepared

to pay rises. Over the course of

2004, very high demand for crude

oil from large, rapidly developing

nations such as China and India has

helped push up the international

price for crude oil by around 80%.

Although surging demand was the

main price driver for crude oil in 2004,

other events also played a role. Political

instability and violence in some OPEC

nations, including Iraq, can have obvious

impacts on supply, with even the threat

of disruptions pushing prices up.

Tax Government tax is the single

biggest component of the price for a

litre of petrol in New Zealand. Over 2004

the total average tax collected on a litre

of 91 octane petrol was 54.9 cents. On

1 April 2005 this increased to 61.4 cents

with the addition of the 5.6 cent per litre

increase in Excise Levy (inclusive

of GST) to fund road building projects.

Over 2004, the average price

of a litre of 91 octane unleaded

fuel was $1.16, and the tax

on that was 54.33 cents.

While tax makes up by far the

biggest proportion of the costs

of fuel it should be noted that, by

international standards, New Zealand’s

fuel is taxed relatively lightly.

Refi ned fuels Like crude oil, refined

fuels are also traded on international

markets in US dollars. The main factor

that sets the price of refined fuels is

the price of crude oil, as refineries

must pay more for it.

High demand for finished fuels,

such as for heating oils in the US

winter and for petrol during the US

and European driving seasons, also

pushes prices up internationally.

Demand for diesel, the main fuel

for industry and construction, is also

strongly tied to international economic

growth. Over 2004, the price for a

barrel of refined diesel ranged from

US$37.55 to US$61.40. In April 2005

the price hit a record US$73.55.

Over 2004, it became clear that

demand for refined fuels was nearing

the capacity of the world’s refineries

to process crude oil. Refineries are

multi-billion dollar investments that

take many years to build. When a

major refinery stops producing fuel

for a period of time the supply of

refined product dips and the price

rises. This happened last year when

Hurricane Ivan damaged a number

of refineries in the Gulf of Mexico.

A number of factors including

difficulty in attracting investment,

combined with difficulty in finding

suitable new locations, has resulted

in refining capacity growing at a

slower rate than demand for fuel.

The exchange rate Changes in the

exchange rate between the New Zealand

and US dollar have a direct effect on

the prices we pay for our crude oil and

refined fuels. In 2004, the New Zealand

dollar strengthened significantly against

the US dollar which, given that crude oil

and refined fuels are purchased in

US dollars, provided New Zealand with

some protection against even higher

fuel costs.

1.4 The facts about fuel pricingOver 2004, the volatile international market for crude oil and refined

fuels drove up the price at the New Zealand pump. The price of fuel

became the most high-profile public issue for BP in New Zealand,

and a key concern for our stakeholders and customers.



Shipping costs New Zealand is at

the very end of the global oil supply

chain, meaning it takes longer to get

oil to New Zealand, and the cost is

consequently greater. Shipping costs

make up around 3.6% of our fuel

pump prices.

Shipping costs in 2004 increased

51%, partly owing to the increased

demand for tankers internationally,

as well as changes to European Union

regulations which have seen a number

of vessels taken off the water earlier

than expected, thereby reducing the

supply of oil-transporting vessels.

BP – our business

International comparison of petrol prices (unleaded) as at 1 April 2005 (NZ$ per litre)

US

Australia

New Zealand

France

0.0

Belgium

Germany

Italy

UK

Netherlands

0.5 1.0 1.5 2.52.0

USD/BBL

Crude oil prices vs exchange rate over 2004

55

50

45

40

35

30

25

20

0.8

0.7

0.6

0.5

0.4

0.3

0.2

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Exchange rate Dubai Crude

US$/NZ$ Exchange Rate

Average breakdown of a NZ litre

of 91 Unleaded in April 2005

Taxes

Crude oil and refining costs

Operating costs, wholesale and retail margin

International shipping costs

45.7%

3.3%3.6%

47.4%

Data sourced from Energy Information Administration International.


10 BP in New Zealand

BP has a number of policies

and programmes in place to

ensure we continue to play a

strong and constructive role in

New Zealand communities.

Staff satisfaction survey Every two

years the BP Group internationally

conducts a staff survey – the BP People

Assurance Survey – to gauge the level

of satisfaction of BP employees and

to identify issues that need attention.

In 2004, the New Zealand survey

showed 74% of BP employees were

satisfied in their work, close to the

‘best in class’ result from the whole

BP Group of 79%. This is down from

81% in 2003, perhaps owing to an

internal change programme within BP.

Compliance and Ethics BP has a strong

commitment to ethical conduct. We

believe ethical conduct is essential

to developing strong business

relationships built on trust, attracting

great people to work for us, and great

business performance.

BP continues to have an annual

certification process, where all

team leaders are required to sign

a certificate stating they have

read, understood and complied

with BP’s ethical conduct policy.

In 2004, the certification process

expanded its scope and required line

managers to go beyond this and state the

extent to which they had complied with

both applicable laws and regulations, as

well as BP’s ethical conduct policy. This

certification process provides a forum

for raising and resolving any issues.

As part of BP’s commitment to

ethical behaviour and transparency, in

2004 BP updated its existing policy

on gifts and entertainment. In the

past, all gifts or entertainment costing

more than $150 had to be logged in a

register. This has been reduced to $50

for gifts and $150 for business meals.

The BP graduate programme The

BP graduate programme is designed

to provide tertiary graduates with

employment that will give them a

broad range of learning experiences,

challenges, and opportunities, and

to provide BP with graduates who

have the appropriate skills to progress

through the organisation and become

the future leaders of BP.

1.5 Our peopleThe way we interact with our staff and the communities and

customers we serve is critical to attracting and retaining the very

best staff and to protecting our biggest asset – our reputation.



All major universities nationwide are

contacted to attract graduates from a

range of disciplines for the following

year. Interested graduates apply for

places on the programme and are short-

listed for interviews. Eight successful

candidates are then brought together

in Wellington for an Assessment Day.

Our full leadership team attends

this day, to select the successful

graduate candidates. The Assessment

Day not only allows BP to assess

the candidates, it also allows the

candidates to determine whether

the BP programme is right for them.

The graduate programme has been

run annually since 2000, attracting

hundreds of applicants each year.

Of the 14 graduates hired under

this programme, 13 are still with

the company.

Diversity and inclusion BP is

committed to diversity and inclusion

within the workplace. Our aim is to

attract, seek and retain the best talent

available – the best men and women,

regardless of background, age, religion,

ethnic origin, nationality, disability or

sexual orientation. All of our employees

can and should expect to be treated

with dignity and respect, and to

succeed on their merits.

To help us create an environment

where this is possible, BP each year

holds workshops on diversity and

inclusion, run by John Spooner from

the Genesis Consortium in the US.

Parental leave BP New Zealand

recognises the importance of

employees’ lives outside work and

encourages a good work-life balance.

BP offers eligible staff three months’

paid parental leave which is additional

to statutory requirements. This leave

is paid upon the employee’s return to

permanent employment with BP, in

four instalments paid after three, six,

nine and 12 months of returning to

work. Both male and female

permanent employees with more

than two years of service are

eligible for the payments.

Upon return to work BP

allows parents flexible working

hours where required.

BP also provides each new

parent with a home computer,

to enable them to keep up to

date during parental leave.

BP – our business



No accidents, no harm to people

and no damage to the environment

BP New Zealand staff worked a total

2.9 million hours in 2004. The work

often involved the handling of fuels,

moving vehicles and heavy equipment.

Every one of our staff, our contractors,

and our customers has an absolute

right to expect to go home at the end

of the day free from harm or injury.

In 2004, an audit report by the

BP Group into BP New Zealand’s

health and safety (HSE) performance

noted that “we have found a

culture of commitment to HSE is

strongly evident in New Zealand”.

This section of our Sustainability

Report looks at some policies and

health and safety programmes that BP

has pioneered in New Zealand in order

to continually improve our performance

in the area of keeping people safe.

Injuries, incidents and reporting

All incidents at BP sites are reported

through an international, on-line

reporting and tracking system.

The system, known as ‘Tr@ction’,

ensures consistent reporting

and monitoring for all incidents

including near-misses, customer

complaints, loss of production and

environmental incidents, and tracks

investigations into these incidents.

The system allows BP business

units to accurately measure their

own HSE performance and set

tangible targets for improvement.

The following work injury and vehicle

safety performance information is a

small percentage of the data relating

to BP New Zealand that was collected

in 2004 by the Tr@ction system.

Engine on, cellphone off International

research shows that the risks of using

a cellphone while driving are similar

to those of driving while under the

influence of alcohol. People talking

on cellphones while driving are four

times more likely to be involved in an

accident involving themselves, their

passengers or a third party.

In 2002, BP prohibited the use of

cellphones in its company cars at all

times and with no exceptions. This

includes hands-free cellphones, as

research shows that these are as

risky as hand-held phones.

BP’s 2002 policy states that if a

car engine is on, all cellphones must

be switched off. This policy is now

firmly entrenched across all areas of

the business. Hands-free kits have

been removed from all company

cars and are no longer fitted.

In 2004, BP shared international

research with the New Zealand

Government into the risk of cellphone

use while driving, in the hope that

a similar policy can be adopted for

all motorists using public roads.

In 2004, BP New Zealand operated

a fleet of 55 tanker trucks and

90 light vehicles (cars and vans).

This fleet travelled more than 9.6

million kilometres last year.

The ‘engine on, cellphone off’

policy is an important part of BP’s

commitment to health and safety in

the workplace. BP believes it increases

the safety not only of BP employees,

but also of members of the public.

1.6 Health and safety performanceBP’s goal across all of its operations in all the countries where it

operates is simple – no accidents, no harm to people and no damage

to the environment. However, while the goal is simple, it requires a

huge level of commitment and focus from every member of our team

if it is to be advanced.

Keeping our workplaces safe is a priority.

2001 2002 20032001 2002 2003 2004 2004

Activity

Days away from work injuries 2 1 2 4

Days away from work frequency 0.18 0.08 0.16 0.3

Restricted injuries 29 29 22 39

Restricted injury frequency 2.6 2.5 1.7 2.76

Frequency measures are the number of cases per 200,000 hours worked.



Engine on, lights on Since 2000, it has

been BP New Zealand’s policy that

car headlights should be used at all

times, day and night. All company cars

are wired so that the lights switch on

automatically with the car’s engine.

Many traffic crashes are the result

of the failure of a driver to notice

another vehicle. The purpose of

daytime running lamps (DRLs) is to

increase the visual contrast of the

vehicle from its surrounding

environment.

The US Department of

Transportation has conducted research

into the effectiveness of daytime

running lamps (DRLs), and found

that DRLs are associated with a

7% reduction in the risk of non-fatal

crashes. It also found that DRL-

equipped vehicles were 28% less

likely to be involved in fatal

pedestrian crashes.

Seven countries require the use

of DRLs, including a number of

Scandinavian countries and Canada.

Results of studies from these

countries consistently show that the

use of DRLs reduces the number

of two-vehicle crashes during

daylight, dusk and dawn.

The crash reduction potential of

DRLs lies in their ability to attract

attention, especially in the peripheral

visual field.

Introducing a DRL policy has been

a simple step for BP, to contribute

to safer roads for our staff and for

the public.

BP – our business

While the goal is for there to be no accidents, 2004 showed a pleasing

overall improvement from 2003 in the operation of BP vehicles.

BP light vehicle accident summary

2001 2002 20032001 2002 2003 2004 2004

Indicators and limits

Light vehicle accidents 6 5 5 1

Light vehicle accident ratea 4.0 3.3 3.3 0.57

Cost of repairs (NZ$) 20,000 6,000 6,670 1,336

Preventable 2 2 2 1

Non-preventable 4 3 3 0

Injuries reported 0 0 0 0

a Accident rate = number of accidents per million kms.

2001 2002 20032001 2002 2003 2004 2004

Factors contributing to crashes

Too fast for conditions n/a 0 0 0

Failed to give way n/a 1 1 1

Inattention or attention diverted n/a 4 0 0

Road conditions n/a 0 0 0

Driver tired or fell asleep n/a 0 0 0

Vehicle fault n/a 0 0 0

Inexperience n/a 0 0 0

Weather n/a 0 0 0

Following too closely n/a 0 4 0

BP light vehicle accidents

2001

2002

2003

2004

0 2 4 6

Number of light vehicle accidents



BP heavy vehicle accident summary

2001 2002 2003 2001 2002 2003 20042004

Indicators

Heavy vehicle accidents 5 13 15 6

Heavy vehicle accident ratea 0.49 1.8 2.0 0.73

Preventable 2 7 9 4

Non-preventable 3 6 5 2

Injuries reported 0 0 1 1

a Accident rate = number of accidents per million kms.

2001 2002 20032001 2002 2003 2004 2004

Factors contributing to crashes

Too fast for conditions 2 3 1 2

Failed to give way 2 5 2 0

Inattention or attention diverted 0 0 3 0

Road conditions 0 2 1 2

Driver tired or fell asleep 0 0 1 1

Vehicle fault 0 1 1 0

Inexperience 0 0 0 0

Weather 0 0 0 0

Following too closely 1 2 0 1

Did not see other party 0 0 6 0

BP heavy vehicle accident rate

2001

2002

2003

2004

0.0 0.5 1.5 2.01.0

Number of heavy vehicle accidents

BP reported a pleasing reduction in heavy vehicle accidents in 2004.



BP Lubricants – setting the HSE

standard In May 2004, BP’s Lubricant

Production Centre in Auckland marked

14 years without a single injury requiring

time off work. This achievement

includes all staff and contractors

who have worked at the site.

The Lubricant Production Centre

blends and produces lubricants for

the New Zealand market. The site

employs 28 staff and handles 18

million litres of product per year.

This remarkable health and safety

achievement is the result of the

Centre’s unwavering commitment to

safety at all times. In particular, the

Centre carries out risk assessment

and hazard management exercises,

a comprehensive safety training and

induction programme for new staff

and contractors, BP-sponsored first

aid training for all staff and an open

reporting environment for all health

and safety matters.

Road safety Road accidents cause

the most deaths across the BP Group

internationally every year. In response,

the company has in place a

comprehensive driver safety

programme to turn this around.

All BP office staff who drive, or might

be required to drive, a vehicle as part of

their work are required to complete an

advanced driving course with Holden

Driver Training every two years.

The course covers:

• Observation techniques.

• Hazard perception and hazard

action plans.

• Vehicle dynamics.

• Risk management.

• Braking, cornering and skidding.

• Defensive driving.

• A practical driving assessment.

BP employees driving company

cars also have regular health and

fitness assessments and all BP

staff attend a fatigue management

training programme which was

developed by BP New Zealand with

the Wellington School of Medicine.

This programme, which covers

how to recognise and manage

fatigue, has now been adopted

by BP internationally.

BP also has a rigorous screening,

training and professional development

programme for our team of tanker

drivers and aviation refuellers including:

• Medical checks and regular updates.

• More than 200 hours of in-cab

training.

• The NZQA-accredited BP Pro-Driver

advanced training programme.

• Refresher training and assessment.

• Fatigue management training.

• Emergency response training.

Safety at sea – BP and Silver Fern

Shipping BP holds a 25% shareholding

in Silver Fern Shipping, which runs two

180 metre-long coastal oil tankers – the

Kakariki and the Taiko – between the

Marsden Point Oil Refinery and ports

around the country.

In June 2004, both tankers and their

crews each celebrated 1,000 days of

operation without a single lost time

injury – an all-time safety record for Kiwi

oil tankers on the New Zealand coast.

HSE forums To ensure health and

safety continues to be in the minds

of BP staff, BP Head Office has run

a number of lunchtime meetings with

guest speakers on a diverse range of

health and safety topics.

In 2004, some of the guest

speakers included:

• Dr Simon Ryder-Lewis, on the early

detection and prevention of cancer.

• Green MP Sue Kedgley, on

genetically modified foods.

• Ken Rutherford from the TAB on

managing risks associated with

gambling.

• Chief censor Bill Hastings, on

censorship and the role of the office

of film and literature classification in

protecting the public.

• The chief executive of Instep,

Matthew Beattie, on alcohol and

drug abuse.

These sessions are always well

attended and provoke interesting

discussion among staff on a

wide range of HSE issues.

BP – our business



Currently the Marsden Point Refinery

is nearing the completion of a

massive upgrade which will enable it

to produce a whole new generation

of cleaner fuels for New Zealand.

New government specifications,

which take effect from 2006, require

that benzene levels in petrol reduce

from 3% to 1%, and that the sulphur

content in diesel reduces from 500

parts per million (ppm) to 50ppm. By

2009, the Refinery will produce diesel

with sulphur levels of just 10ppm.

Sulphur occurs in diesel because it is

a component of crude oil. When sulphur

burns, it forms sulphur dioxide which

is harmful to humans. When diesel

burns, it produces microscopic particles

which can cause cardiovascular and

respiratory problems in some people.

Benzene is a by-product of the refining

process which, with prolonged and

concentrated exposure, has been linked

to the development of some cancers.

The 2006 shift to sulphur content

of 50ppm is very significant as it will

allow a new generation of vehicles

to be used in New Zealand. These

vehicles are fitted with particulate

filters which prevent the release of

up to 95% of all particles. These

filters can only work with fuel sulphur

levels no higher than 50ppm.

The ‘Future Fuels’ upgrade will

allow the Refinery to produce these

fuels to the highest international

quality standards. At a cost of

$180 million it is the biggest upgrade

to the Refinery in 25 years and will

confirm Marsden Point as one of the

world’s most efficient refineries.

Construction of the new foundations

for this upgrade began in January 2004

and the upgrade quickly became one

of New Zealand’s largest industrial

construction projects. Over the

course of 2004, 425 people were

employed on the construction site,

working a total of 435,000 hours.

The upgrade project team, the

NZRC and Occupational Safety

and Health (OSH) have formed a

partnership to ensure the safety of

all staff on-site for the duration of the

project. In all of the hours worked

over 2004 there was just one lost-

time injury. This injury was sustained

in September and the employee

returned to work three days later.

The Future Fuels project will, at its

peak in 2005, employ a maximum of

590 staff on-site and more than one

million hours will be worked on the

project from beginning to completion.

For every month that the site

operates safely the project team

selects the safety contractor of

the month. That contractor’s staff

then chooses a charity to receive

a donation from the NZRC.

The upgrade has involved hundreds

of engineers and construction workers

from around the world who have

custom-built the specialist pieces of

equipment required for the project.

For example, in September 2004

a single shipment containing the bulk

of the plant equipment required for

the upgrade docked at Marsden Point.

The shipment contained 32,000 cubic

metres, or just under 2,000 tonnes, of

preassembled plant equipment which

had been constructed and collected

from Japan, Thailand and Indonesia.

Simply loading the vessel with

all of this equipment took six days

from ports in three countries,

including a full day to load the new

reactor. It took five days to unload at

Marsden Point. A new road was built

between the Refinery and the Port

to transport the heavy equipment.

This massive project is on budget

and on schedule. In the words of the

Refinery’s general manager, Thomas

Zengerly, the project is “a logistical

masterpiece”. It will allow the Marsden

Point Refinery to begin producing the

next generation of New Zealand’s fuels

– the cleanest New Zealand has ever

produced – from September 2005.

1.7 Future Fuels case studyAs a 24% shareholder in the New Zealand Refining Company (NZRC),

BP has a strong interest in the operation of New Zealand’s only

refinery at Marsden Point, and in the fuels that it produces.

The $180-million Future Fuels project – bringing New Zealand the next generation of fuels.



Our BP

2BP and the environment2.1 Environmental performance

2.2 Bio-diesel

2.3 Liquified Natural Gas

2.4 Dairy Flat: environment case study



Internationally, the BP Group was

the first major oil company to state

publicly that the risks of climate

change were serious, and that

precautionary action was justified.

We are proud that the public

understands and appreciates our

concern and our efforts regarding

the environment.

In 2004, BP was nominated as a

finalist in the Deloitte/Management

Magazine top 200 Business Awards

for its commitment to triple bottom

line reporting and cleaner fuels. And

BP’s market research in 2004 showed

that New Zealanders believe BP is

environmentally friendlier than our

competitors.

We believe that our commitment

to sustainability not only benefits the

environment, but that it is also good

for business. Increased use of the

BP Superwash, which recycles and

cleans waste water, is a good example

of this. The innovative BP Superwash

system not only reduces waste water

but it also attracts customers and

has saved BP more than $300,000

in water costs as at the end of 2004.

The BP New Zealand Superwash

programme was recognised by the

BP Group in 2004 and was awarded

a ‘Helios Award’.

Our environmental efforts are part

of BP’s everyday business. This

Report highlights some of those

environmental initiatives and

investments.

It also measures the impact of

our operations on the environment

in 2004, and compares it with

previous years’ performance.

Offi ce waste management system

In 2004, BP analysed the

environmental impact of its Head

Office in Wellington.

Over a two-month period a group

of BP staff volunteered to collect, sort

and weigh waste disposed of from

Head Office. The results showed that

around 8.5 tonnes of waste was sent

to landfill from Head Office each year.

The BP Green Office Strategy was

born. The Strategy is designed to

reduce the impact of our offices and

daily work practices on the

environment.

The first, and most controversial

step in reducing waste was removing

the office rubbish bins that had been

at every desk. These were replaced

with cardboard recycling boxes for

paper waste, and one central rubbish

bin on each floor for non-recyclable

waste. Paper waste is put into

locked bins which are removed by a

document destruction company and

the contents shredded and recycled.

The programme quickly became

part of the office culture. In 2005

a survey showed that Head Office

waste to landfill had been cut by

more than 70%, or more than six

tonnes per annum, without disrupting

any office processes or systems.

In 2005 the Green Office Strategy

will move to considering ways BP can

reduce its consumption of paper

and electricity.

Cutting paper by embracing technology

BP’s relationship with TelstraClear has

contributed to our waste reduction.

Monthly phone bills are now provided

on-line rather than on paper. Given the

volume of phone calls made by BP

staff, this on-line approach cut BP’s

printed bill by 1,000 pages per month

in 2004.

The next step is to reduce the paper

bill even further, aiming for savings

of 2,800 pages per month, or around

35,000 pages of paper per year.

Emissions to air – hydrocarbon vapours

Hydrocarbon vapours are produced

by petroleum fuels before they are

burned. Hydrocarbon vapours can be

released from petrol in storage and

while fuel is being transferred.

BP tries to minimise the release

of these vapours wherever possible,

including through the use of floating

blankets on the new fuel storage

tanks constructed at the Port of

Lyttelton (see pages 32-33). The

vapour pressure of petrol has also

been lowered, which will further

help reduce vapour emissions.

Release of hydrocarbon vapours

from BP facilities has steadily

decreased in recent years.

2.1 Environmental performanceTaking care of the natural environment is a fundamental principle

for BP here and overseas.




Hydrocarbon vapour released (tonnes)

Year TonnesYear Tonnes

2001 2,0362002 2,0042003 1,9232004 1,991

Hydrocarbon vapours in the above table include: storage of BP petrol and aviation fuel in BP tanks and equity share in tankage, BP total hydrocarbon emissions during truck loading, and BP company-owned service station emissions on delivery to service stations and car fuelling.

Sulphur oxides The following table

records the kilograms of sulphur oxide

emissions produced from BP’s fleet

of 55 fuel tankers. The significant drop

in sulphur oxides from BP’s tankers in

2004 is the result of the shift in fuel

specifications which required all diesel

sold in New Zealand to have no more

than 600ppm sulphur from 1 August

2004, and to meet an average sulphur

content of no more than 500ppm.

This sulphur content in diesel will

reduce further to 50ppm in 2006

in response to a further tightening

of regulations. These regulations

are being met by the Future Fuels

upgrade at the New Zealand

Refining Company (see page 16).

Sulphur oxide emissions from

BP fuel tankers

Year kgsYear kgs

2001 5,0292002 3,9542003 4,6212004 2,610

BP New Zealand has led the fuels

industry by making a limited amount

of lower-sulphur diesel available in

New Zealand since 2001 – well before

new government fuel specifications

came into effect in mid-2004.

BP introduced lower-sulphur

diesel into Christchurch in 2001 as

a contribution towards addressing

the area’s smog problems. The

following tables show the properties

of BP lower-sulphur diesel against the

industry average, and the reduction

in sulphur emissions BP has achieved

through pioneering this fuel up until

1 July 2004 when lower-sulphur

diesel became the industry norm.

air bp – fuelling aviation in New Zealand.

Lower-sulphur diesel versus normal diesel until 1 July 2004

Property Year Lower-sulphur Normal Property Year Lower-sulphur Normal

diesel diesel diesel diesel

Sulphur ppm 2002 382 1,600 2003 386 1,712 2004 1Hb 316 1,265

Property Year Lower-sulphur Normal Property Year Lower-sulphur Normal

diesel diesel diesel diesel

Cetane indexa 2002 56.9 54.0 2003 56.2 53.9 2004 1Hb 54.2 53.2

Year Volume of lower-sulphur (kl) Sulphur emissions Year Volume of lower-sulphur (kl) Sulphur emissions

diesel sold saved (tonnes) diesel sold saved (tonnes)

2001 14,400 14.82002 16,400 16.72003 25,000 27.72004 1Hb 13,200 10.5

a Cetane index measures how cleanly the fuel burns – the higher the Cetane index number, the cleaner the fuel burns and the less soot is produced.

b Up until August 2004.



Energy consumption/carbon

dioxide production The table above

illustrates BP New Zealand’s energy

consumption across its Head Office,

company-owned service stations and

commercial truck fuelling facilities.

From looking at how New Zealand’s

energy is generated, it is possible

to estimate the amount of CO2

produced through BP’s total electricity

use. CO2 emissions from BP’s fleet

of road tankers are estimated from

total fuel used and listed above.

Fuel spills BP New Zealand handles

nearly 2.2 billion litres of fuel each year

and endeavours at all times not to spill

a drop of it.

Our strong performance in terms

of limiting any spillage of fuel was

unfortunately marred in 2004 as a

result of a fuel tanker leaving the road

and rolling 70 metres down a bank on

farmland in the upper South Island.

This incident meant that 17,000 litres

of aviation fuel was spilt, a matter

which BP regards very seriously. As

a result of this accident a complete

investigation was undertaken, with

the BP investigation team making

several recommendations around

vehicle stability, speed approaching

corners and driver training, and sharing

safety lessons learned from the

accident across the whole BP team.

In this case the truck and tanker

were written off, but the driver

was fortunately saved by wearing

his seat belt, which all BP drivers

are required to wear as policy.

BP Solar BP Solar is a standalone

business within the BP Group,

dedicated to the development,

marketing and distribution of

cutting-edge solar technology.

BP Solar is the third largest

manufacturer of photovoltaic

solar systems globally. It has four

manufacturing facilities globally, located

in the US, Spain, India and Australia,

and produces more than 90 megawatts

of solar products every year.

In 2004, BP Solar announced an

aggressive investment and expansion

programme, aiming to double its

global solar production by 2006.

BP launched its international solar

canopy programme in 1999 and

now has more than 400 sites with

solar canopies throughout the world.

Sixteen of these are in New Zealand.

The solar canopy at the new Dairy

Flat Service Centre at Rodney (see

pages 24 and 25) is thought to be the

largest solar canopy in Australasia.

More than two billion people in the

developing world have no access to

electricity. For these people, solar

Year Electricity Emission COYear Electricity Emission CO22 CO CO22

(MWh) factor (MWh) factoraa emissions emissions emissions emissions

(kg CO (kg CO22/MWh) based on from road/MWh) based on from road

electricity use tankers electricity use tankers

(tonnes) (tonnes) (tonnes) (tonnes)

2001 19,183 200 3,837 4.48 2002 20,439 178 3,638 8,6172003 21.668 190.7 4,132 9,3412004 22,471 190 (est) 4,269 10,086

a Source: MED Energy Data File, July 2004. Emission factor estimate based on previous year, as actual fi gure not available at time of printing.

Year Spills > 150 litres Spills> 15,000 litresYear Spills > 150 litres Spills> 15,000 litres

2001 6 02002 2 02003 6 02004 3 1

BP operates a network of 16 service stations with solar canopies.




electricity is probably the most

economical power source.

BP will continue to pioneer the use

of this clean, efficient and renewable

source of energy.

BP New Zealand sites with

solar canopies

Year Number of sitesYear Number of sites

2000 12001 112002 152003 152004 16

Solar electricity generated from

BP New Zealand’s solar canopies

Year KWhYear KWh

2001 27,142 2002 148,573 2003 192,322 2004 191,132

Note: Although BP had greater installed solar capacity in 2004, energy generated was down on 2003 as a result of poorer weather.

BP Ultimate BP’s premier 98 octane

unleaded fuel, BP Ultimate, entered

the New Zealand market late in

2000 and was the first high octane

fuel readily available to the general

New Zealand motorist.

Supply constraints at the time

limited availability initially to only 32

retail service stations (approximately

10% of the BP retail network) in the

North Island. In 2004, BP Ultimate

was available at 42 service stations.

An enhanced version of BP Ultimate

was launched in May 2005 to the

existing network of 42 locations plus

a further 65 retail service stations,

including 26 in the South Island.

The new formulation for Ultimate

has the same maximum of 1%

benzene and 50ppm sulphur. But

it will also have enhanced engine

cleaning properties through the use

of a new additive at significantly

greater dose levels. This will provide

significantly greater injection

levels than any other BP fuel.

BP Ultimate’s new formulation

contains a new carrier fluid to reduce

combustion chamber deposits, and

a friction modifier which will mean

less frictional resistance to the

crankshaft. The main benefit though is

in improved inlet system cleanliness.

The new formulation will mean that

engines in new vehicles will stay clean

and, depending on the service history

of older vehicles, will provide fuel inlet

system cleaning for older cars as well.

The new BP Ultimate was

launched in conjunction was

new BP Ultimate brand.

When the roll-out of the new

Ultimate is complete, BP Ultimate

will be available at 107 retail

service stations nationwide.

Commitment to used oil recycling

BP New Zealand’s Lubricants

Performance Unit is a member of the

Used Oil Recovery Programme, an

initiative to encourage the storage

and disposal of used oil in an

environmentally responsible way.

BP has been committed to this

programme since 1996. Used oil

collected through the programme

is sent to Holcim New Zealand’s

Westport site where it is used

to supplement coal as a fuel for

the production of cement.

The high temperatures

(approximately 1,480°C with

gas temperatures of 2,000°C),

oxidising conditions and long gas

residence times required for cement

production destroys 99.999% of all

organic contaminants in used oil.

The use of waste oil as an

alternative fuel in cement production

also reduces the demand for non-

renewable resources, and produces

less carbon dioxide than coal. Each

year the used oil collected nationally

replaces 16,000 tonnes of coal.

BP Superwash – cleaning the water after cleaning the car.



This makes bio-fuels a particularly

attractive option for use in large

cities such as Auckland.

Bio-diesel derived from soybean

oil has been used in the United

States for several years and bio-

diesel made from rapeseed oil and

blended with conventional diesel

has become an important alternative

fuel in the European Community.

In both North America and

Europe, farmer subsidies and large

reductions in excise duties are being

used as incentives to encourage

the uptake of these fuels. Some

countries have mandatory targets.

For example, the French Government

has targeted 5% of all diesel used

in France by 2010 to be bio-diesel.

In New Zealand, the most readily

available source of bio-diesel is tallow.

New Zealand produces 160,000

tonnes of tallow each year, most of

which is suitable for conversion to

tallow methyl ester (TME), which is

a high-quality form of bio-diesel.

In 2002, the Government set a target

of two petajoules (PJ) of New Zealand’s

transport fuels to be manufactured from

renewable sources by 2012. On current

levels, this could be achieved through

using 85 million litres of ethanol as a

blend with petrol, or 59 million litres

of bio-diesel as a diesel blend,

or a combination of these options.

As part of BP’s commitment to

sustainability, BP has undertaken

significant research into the application

of bio-fuels in New Zealand.

BP has found that bio-diesel

blends could, in principle, be used

in New Zealand provided that the

right quality could be achieved.

In 2003, BP learned that one of

our customers operated a subsidiary

company that was developing a

process for making bio-diesel.

BP entered into an agreement with

them to assist with a laboratory test

programme, followed by vehicle trials.

As at May 2005, two BP road

tankers have been driven a total of

78,000 kilometres using a blend

consisting of 80% conventional

diesel and 20% bio-diesel. This is

a very high proportion of bio-diesel

compared with blends used overseas.

Two of BP’s Auckland-based

customers are now participating

in this trial and are also using this

blend. Waste Management is using

it in three trucks, Stagecoach in five

of its buses, and Bio-diesel Oils

Limited in two of its vehicles.

The trials have shown that care

must be taken when storing bio-diesel

blends, especially in cold weather, and

that the bio-diesel component of any

blend must be very pure. All 12 trial

vehicles have performed well and have

been virtually problem free during the

spring and summer months of the trial.

Three further steps are required

before bio-diesel becomes a

commercial reality in New Zealand.

The first is the setting of a

rigorous quality standard that

meets the expectations of vehicle

manufacturers and is, at the same

time, suited to the manufacture of

bio-diesel at a reasonable cost.

The second is a commercial

environment that ensures bio-diesel

can compete economically with

conventional diesel, and the third is an

enthusiasm by fleet managers to use

bio-diesel blends in their vehicles.

During 2004, and into 2005,

BP has worked closely with the

Energy Efficiency and Conservation

Authority (EECA) and Standards

New Zealand in writing a New Zealand

Standard for bio-diesel.

BP is also talking with Government

about how bio-diesel could become

part of New Zealand’s fuel mix,

and hence contribute to our Kyoto

obligations. BP believes there is a

future for bio-fuels in New Zealand’s

energy future and is conducting the

research and trials to ensure we can

lead this exciting development.

2.2 Bio-dieselBio-fuels are non-toxic, renewable and biodegradable fuels typically

derived from vegetable oils or tallow. They burn cleanly, reducing

the emissions of ultra fine particles from vehicle exhausts which can

cause health problems in humans, and of carbon dioxide emissions

that contribute to climate change.

A truck from the Waste Management fleet – trialling a bio-diesel blend.




This shortfall is unlikely to impact on

domestic gas consumers who use gas

in their homes for heating or cooking.

There remains plenty of domestic

gas available for these purposes.

The shortfall, which may hit as early

as 2008, will be particularly felt in

the electricity generation sector.

Currently around 25% of

New Zealand’s electricity is generated

by gas-fired power stations.

Over the last few years, BP has been

looking at how this energy gap might

best be bridged and believes importing

Liquified Natural Gas (LNG) will play a

critical role in providing New Zealand

with a low-emission, reliable fuel

– particularly for electricity generation.

LNG is natural gas which is cooled

until it becomes a liquid. When reduced

to a liquid form, LNG takes up just

one 600th the volume taken up by gas

– a single shipment of LNG equals

600 shipments of natural gas. This

massive conversion makes it possible

and cost-effective to move very large

quantities of gas from producer to

consumer in custom-built LNG ships.

The chilled state of the gas during

transportation means the liquid is

not pressurised during shipping.

Before the gas is converted to

liquid, impurities such as oxygen,

carbon dioxide and sulphur are

removed. When an LNG ship docks at

a terminal, the chilled LNG is pumped

ashore and converted back into gas

before being delivered into the gas

distribution system for consumption.

There are a number of advantages

with LNG which make it particularly

suitable for New Zealand. LNG is a

very pure form of natural gas and is

the cleanest of all the fossil fuels.

When burned, LNG produces particle

emissions near to zero and emits

around 70% less CO2 than diesel or

petrol. LNG is particularly clean when

used for electricity generation.

Importantly, there is an abundance

of natural gas throughout the world

and the transport of LNG is becoming

increasingly safe and efficient.

There are currently around 120

double-hulled LNG vessels distributing

this fuel to countries across the world.

Since the first commercial shipment

in 1964 there have been more than

32,000 LNG shipments without a single

incident of LNG being lost through a

breach or failure of the ship’s tanks.

As a future fuel for New Zealand

it is important to consider LNG’s

safety record. If LNG were to leak

– and this is incredibly unlikely – it

would quickly evaporate on contact

with the warmer air or water. LNG

disperses quickly into the atmosphere

leaving no residue and, as such,

there is no environmental clean-up

associated with LNG spills to water.

Because LNG dissipates so

quickly with air it is very difficult

to ignite in the atmosphere.

Importing LNG into New Zealand

makes sense as it is a good fit for our

existing gas distribution infrastructure.

BP is a global leader in the

production and distribution of LNG

and is increasingly focusing on how

to maximise the use of this cleaner

fuel. BP New Zealand is actively

investigating the feasibility of this fuel

in New Zealand and sees real potential

for a relatively small LNG terminal in the

upper half of the North Island to supply

gas-fired electricity generation plants.

Suitable ports that could be used for

the importing of LNG include Marsden

Point near Whangarei, or Taranaki.

Importing LNG will provide

New Zealand with a low-emission,

efficient, reliable and safe fuel,

primarily for electricity generation.

A small LNG terminal will require

some initial investment but will allow

New Zealand to keep the lights

on without burning more coal.

In doing so, LNG will buy

New Zealand time to make the

transition to new, renewable

fuels or to discover and bring to

market domestic gas supplies.

2.3 Liquified Natural GasThe giant Maui gas field off Taranaki supplies around 80% of

New Zealand’s total gas requirements. As Maui rapidly approaches

the end of its productive life, a large gap is looming between

New Zealand’s demand for gas and our ability to meet it through

domestic production.

Shipping of LNG – a safe and efficient way to help meet New Zealand’s energy needs.



2.4 Dairy Flat: environment case studyIn July 2004, BP opened the doors of its $10-million, state-of-the-art

service centre in Rodney, south of Silverdale.

The new motorway service centre is

located next to the northbound lanes

of State Highway One at Dairy Flat.

The centre took more than a year

to build and is an example of how

construction of a new site, and its

ongoing operation, can be sensitive

to its surrounding environment.

Transit New Zealand called for

tenders for the development of

the service centre five years ago,

saying this type of facility was

an integral part of the National

State Highway Strategy.

The Dairy Flat site presented a

number of challenges, and BP and

its engineers needed to develop

innovative and environmentally

sensitive solutions. The site

presented difficulties through its

lack of infrastructure (there is no

connection to water or sewerage

facilities), poor draining soil and a

history of the land being flooded.

One major challenge was the

need to divert a small pastoral

stream around the site. Before

rerouting the 200 metres of

stream, contractors spent two days

collecting 119 native, short-finned

eels which were rereleased once

the diversion was complete.

This stream was originally a

drainage ditch and, as part of this

project, BP set itself the task of

making the water flowing through it

more natural and conducive to the

wildlife that has come to live in it.

The stream has been widened

at one place to allow a small pond

to form and for the flow of water

to slow. This provides a space for

fish in the stream to rest and to

allow food in the water to reach the

stream bottom. This pond is currently

home to a number of ducks.

The site uses around 10,000 litres

of water per day and, as the site is not

connected to mains water, drinking

water is trucked in on a daily basis.

However, the site’s innovative water

recycling system collects and stores

rainwater from the roof and forecourt

canopy for non-drinking purposes,

removing the need to deliver between

two-three million litres of water

per year.

In a further effort to reduce

unnecessary use of water, the

flow of water in the toilet

hand-wash basins automatically

stops after seven seconds.

A state-of-the-art waste water

treatment system has also been

developed at the site to collect and



treat effluent. This system treats

effluent collected from the site to

the highest standard and the treated

effluent is gradually released into

irrigation beds away from the site.

This is a more environmentally

sustainable option than collecting

the effluent and having it treated

and discharged directly into

waterways or the sea. This system

is regularly monitored and tests

show it has no adverse impacts on

the surrounding environment.

The Dairy Flat site has been

extensively planted, predominantly

with natives, both to tie the site into

its rural location and to limit runoff into

the surrounding environment. Another

pond has been created adjacent

to the site to contain the run-off of

water from the site, and discharge

from the pond is controlled so as

to minimise the risk of any surface

flooding downstream from the site.

An interceptor system has also

been built into the forecourt design

to prevent any fuel or oil spills

from the service station or truck

stop entering the environment.

BP Dairy Flat reflects BP’s

commitment to solar energy, with

what is believed to be the largest

solar canopy in Australasia. The 640

solar panels cover the entire canopy

which, in the six months between

June and December 2004, generated

12,709 kilowatt hours of electricity.

Locals, and the growing number of

tourists travelling through Northland,

now have the ultimate in one-stop

shopping at their convenience.

Motorists stopping to refuel their

cars can take time out for a great

cup of coffee or a meal, buy their

groceries, stop in for local information

or buy gifts and local crafts.

The new BP centre serves a very

busy stretch of national highway

and, through the combination of

services, will benefit both local

motorists and visitors to the region.

And it hasn’t cost the earth.

The ultimate service station The Dairy

Flat motorway service area includes:

• A BP Connect service station with

62 fuel pump nozzles.

• A BP Wild Bean Café.

• A BP truck stop.

• A Burger King.

• An Autobahn Café.

• Mohair Crafts retail store.

• A branch of the Rodney Information

Centre.

• A children’s playground.

• Toilet facilities.




3BP in society3.1 BP in the community

3.2 BP’s continued support of Surf Life Saving New Zealand

3.3 BP and the world’s toughest yacht race

3.4 Who BP works with

3.5 Saturn tanks: a new approach to community consultation



BP has around 330 service stations

throughout New Zealand, with

a presence in more than 200

New Zealand communities.

BP has two important means

of investing in the communities

it operates in: sponsorships and

donations. In 2004, BP accepted more

than 230 donation requests from

community groups and organisations

from all over New Zealand.

BP has three long-term

sponsorships in New Zealand: Surf

Life Saving New Zealand, The BP

Challenge and the Enterprise Studies

New Zealand programme. These are

each explained in more detail below.

As well as these ongoing

sponsorships BP takes on

a number of new or one-off

sponsorships every year.

In 2004, some of these

sponsorships were:

• The Business in the Community

Programme.

• The Transport Emissions

Programme.

• The Waikato Environmental

Business Network.

• Ronald McDonald House

Christchurch.

• Volunteer Wellington.

• United Way New Zealand.

The BP Challenge A well-known

project in the New Zealand education

community, The BP Challenge is a

hands-on, school-based activity for

children aged five to 15.

The programme, which has

been running in schools since

1989, encourages children to find

solutions to problems using everyday

items and innovative thinking.

In 2004, the BP Challenge

was run in 32 regions throughout

New Zealand. This involved 78

events and close to 8,000 students

from nearly 500 schools.

The programme is supported by

the Royal Society of New Zealand.

The Enterprise Studies Programme BP

New Zealand is proud to be promoting

an enterprising culture in secondary

school children, through its sponsorhip

of the Enterprise Studies Programme

(ESP).

BP has been principal sponsor of

ESP for many years. The programme

targets secondary school students,

predominantly year 10. Students

complete the programme with a

business planning activity for a

community organisation, and a

market day where they sell goods

and services they have produced

in their local community. Around

8,000 students graduated from

the programme in 2004.

An optional addition to ESP is

the BP Community Enterprise

Project, where students produce

a comprehensive business plan to

enhance a community organisation

through a capital project. Students

are expected to research the goals

and needs of the organisation, design

and gather quotes for the project,

budget and implement their design.

In 2004, 20 community projects

were funded, ranging from a

lifeguard station being built at

Waipu Cove in the Far North, to

posters raising awareness as

to how to prevent strokes.

The programme is run by the

Enterprise New Zealand Trust.

Volunteer Wellington/Pablos Art

Auction BP has enjoyed a relationship

with Volunteer Wellington since 1997

when BP began a corporate volunteer

programme (now known as Employees

in the Community).

One of the projects BP staff

undertook in 2004 as part of this

relationship was helping at the

annual Pablos Art Auction.

Pablos is an art studio specifically

tailored to artists who use or have

used mental health services. Pablos

was set up in 1993 in response to

the closing of mental health hospitals

and the move towards a greater

emphasis on community-based care.

At Pablos, students have the

opportunity to mix with other

students as well as professional

art tutors and have access to a

wide range of art materials.

One of Pablos’ major fundraisers

each year is the Pablos Art

Auction. At the 2004 auction in

November, BP staff displayed

paintings for bidding, sold tickets,

3.1 BP in the communityInvesting in the community is a cornerstone of our organisational

philosophy. It allows BP to continue building a strong and profitable

business in New Zealand.

BP in the community



set up and served refreshments

and helped with cleaning, both

before and after the event.

The night was a huge success,

raising more than $55,000.

Tsunami relief No one will ever forget

the tragedy of the Boxing Day Tsunami

which killed around 300,000 people

and devastated huge areas of coastal

South East Asia.

Every New Zealander seemed to

be affected by the Asian Tsunami with

many New Zealanders, including BP

staff, holidaying in the area at the time.

Once BP could account for all

our staff in the area, we could then

concentrate on how we could help.

Globally, BP set up an employee

matching scheme where all

donations that were given to the

Tsunami disaster relief fund by

BP staff were matched by BP.

BP New Zealand staff raised more

than $11,000, which was donated to

the Red Cross. Globally BP staff raised

US$1.6 million, with the BP Group

donating US$4.6 million.

At BP service stations around

New Zealand we placed Tsunami relief

collection boxes. Chubb New Zealand

offered a free pick-up service and

New Zealanders donated more than

$950,000 through these donation

boxes, and an 0900 number.

BP-sponsored inflatable rubber

boats (IRBs) were also shipped to

Sri Lanka to help move medical

supplies from region to region.

The BP call centre – delivering

outstanding customer service The BP

call centre is an important part of BP’s

interaction with our customers and the

community. It is a well-organised and

efficient unit that is delivering

world-class service.

BP has a core call centre team of

nine people who answer 80% of all

incoming calls. Calls are then directed

to various areas of BP’s business.

In 2004, the BP call centre received

177,000 phone calls, of which 90%

were answered personally, within

20 seconds.

In 2004, the call centre handled

825 complaints – 15% relating to

price and 40% relating to service.

In 2003, the call centre handled

618 complaints – 11% relating to

price and 54% relating to service.

The call centre team participates

annually in the CRM Contact Centre

Awards. In 2004, the team won an

award for the best-performing contact

centre in the Petroleum/Chemicals

Distribution and Sales sector.



BP’s support of Surf Life Saving can be

traced back to 1968. BP’s long-running

partnership with Surf Life Saving

reflects significant empathy with

our brand slogan ‘In it for life’.

Since the start of the new

millennium, Surf Lifesavers have saved

the lives of almost 10,000 swimmers at

New Zealand beaches. BP’s inflatable

rubber boats (IRBs) have been used in

more than 50% of these rescues – more

than 5,000 lives saved in just four years.

These statistics only tell a part of the

role that BP IRBs play in the wider

sphere of activity Surf Lifesavers are

active in. In the 2004/2005 season,

BP IRBs have also been used in:

• Sri Lanka to assist the movement

of medical supplies from village to

village following damage from the

Boxing Day Tsunami. With so much

land-based infrastructure wiped out

by the giant waves, the sea was the

most effective way to move supplies.

• Movement of people, property and

livestock during the 2004 floods in

the Manawatu and Wellington areas.

• Assisting with the refloating of a

fishing boat that ran aground north

of Karekare.

• Event safety work at a wide range

of sporting and recreational events

including Cook Strait swimming,

the Taupo Ironman and Big Wave

Surfing in Foveaux Strait.

Through the support of BP, Surf

Life Saving has developed an

essential rescue tool that provides

far greater value to the New Zealand

community than the inshore

rescue work it was designed for.

BP’s contribution to Surf Life

Saving is much greater than support

of the equipment we use. The

equipment has no value without the

highly trained lifeguards to operate

it. The 3,800 qualified surf lifeguards

who provide more than 150,000

volunteer lifeguard hours every year

rely on the training initiatives that

our sponsors and funders support.

Surf Lifesaving looks forward to

another 37 years of partnership with

BP – preventing death and injury

at New Zealand beaches.

Geoff Barry

Chief Executive

Surf Life Saving New Zealand

3.2 BP’s continued support of Surf Life Saving New Zealand

Message from Geoff Barry, CEO of Surf Life Saving New Zealand

BP in the community



And each boat, with the exception

of the skipper, is crewed by

volunteers, many of whom have

never set foot on a yacht before.

In 2004, the BP Group sponsored

a yacht in this race. BP Explorer, like

the rest of the fleet, is a 72-foot

ocean-racing yacht. Skippered by

professional sailor, David Melville,

BP Explorer left Portsmouth in

the UK on 3 October 2004, and

completed the race in July 2005.

The race consists of seven legs,

between various ports, that see the

fleet sail through some of the world’s

most demanding waters, including the

icy Southern Ocean and the doldrums

of the equator. The longest of these

legs is the massive 6,800-mile leg

between Cape Town and Boston.

On 4 January 2005, BP Explorer

entered Wellington Harbour in

second place, just two and a half

minutes behind the leg leader after

an intense 6,200-mile battle for the

lead from Buenos Aires. An exhausted

Explorer crew then spent a month in

New Zealand preparing the yacht for

the next leg and enjoying a well-earned

holiday with supporters and family.

The BP Group has sponsored

the BP Explorer to support the race

charity – Save the Children – and to

highlight how everyday people can

achieve extraordinary things. BP is

also using Explorer and the race

to draw attention to the need to

protect our marine environment.

BP has also sponsored a yacht

because the Global Challenge reflects

many of the values that BP strives for –

innovative, performance-driven,

competitive and green. In addition,

BP sponsors the BP Safety Award

which is presented to a crew in

each port that has demonstrated

excellence in terms of safety.

At the time this was printed,

BP Explorer had just completed

The Global Challenge – entering

the Port of Portsmouth from where

the race started in third place.

3.3 BP and the world’s toughest yacht raceIt’s called the world’s toughest yacht race for a reason. The Global

Challenge involves 12 identical yachts competing against each other

as they race 32,000 miles around the world against the prevailing

wind and ocean currents.



89.8 ZM – Metro Madness Rally Hunt TaurangaAberdeen School HamiltonAgape Budgeting WellingtonAlicetown Playcentre WellingtonAllergy New Zealand AucklandAmberley School ChristchurchAmisfi eld School TokoroaAngels for Children Dunedin DunedinAngels for Children Hamilton HamiltonAngels for Children Napier NapierArmistice Cambridge CambridgeAuckland Down Syndrome Association AucklandAuckland Kindergarten Association AucklandAvalon Rugby and Football Club WellingtonBeachlands School AucklandBirchville Kindergarten Upper HuttBirkenhead Primary School AucklandBirthright Wellington WellingtonBlockhouse Bay Primary School AucklandBrightwater School NelsonCambridge East Primary School CambridgeCambridge Toy Library CambridgeCamellia House AucklandCamp Quality Christchurch ChristchurchCanteen Auckland AucklandCarterton Community Toy Library CartertonCarterton Playcentre CartertonCarterton School CartertonCaversham Toy Library CavershamChelsea Primary School AucklandChild Cancer Foundation TaurangaChristchurch Boys’ High school ChristchurchChristchurch Hospital ChristchurchChristchurch Multiple Birth Club ChristchurchChristchurch United AFC ChristchurchClassic Hits Plunket Promotion WellingtonCommunity Spirit PoriruaCoromandel Playcentre CoromandelDepartment of Speech and Language Therapy Christchurch Hospital ChristchurchDiabetes Auckland AucklandDowntown Community Ministry WellingtonDrug Arm Wellington WellingtonEastbourne Toy Library EastbourneEdmonton School AucklandEpilepsy Foundation of Auckland AucklandEpilepsy Foundation of Dunedin DunedinEpilepsy Foundation of Hawkes Bay NapierEpilepsy Foundation of Palmerston North Palmerston NorthEpilepsy Foundation of Rotorua RotoruaEpilepsy Foundation of Tauranga TaurangaEpilepsy Foundation of Te Puna TaurangaEpilepsy Foundation of Wellington WellingtonFaith Bible College TaurangaFerrymead Lions Charitable Trust ChristchurchFiddlestyx Toy Library ChristchurchFlying Kiwi Promotions ChristchurchFriends of Hautapu School CambridgeFriends of the Malaghan Institute WellingtonFruits of Katikati KatikatiGlasgow Eagles Scout Group WanganuiGlendowie Kindergarten AucklandGlistening Waters MastertonGracefi eld School Lower HuttGreen Bay School AucklandGreenhithe School Fundraising AucklandGrey Power Association WaitakereGymeez Dunedin DunedinHalsey Drive School AucklandHarcourts Lower Hutt Lower HuttHaumoana School HastingsHawera Community Police Volunteers HaweraHeart Children Te KuitiHeart Children New Zealand Wanganui Branch WanganuiHeart Run Aotearoa DunedinHelensville Harriers Helensville

Henry Hill School NapierHibiscus Coast Community House OrewaHope for Children Auckland AucklandHope for Children Foundation Mt MaunganuiHorowhenua Supergrans LevinHorse of the Year 2005 NapierHoughton Valley School WellingtonHowick College AucklandHutt City Kindergarten Lower HuttJames Family Trust Mt MaunganuiJim Brown Memorial Golf Tournament WellingtonJohnsonville Kindergarten WellingtonKaikoura Boys and Girls Agricultural Club KaikouraKaikoura Rugby Football Club KaikouraKaitaia Gymnastics Club KaitaiaKapiti Toy Library Kapiti CoastKauri Coast 4WD Club DargavilleKeith Street Kindergarten WanganuiKelburn Playcentre WellingtonKia Kaha Blind Hockey Club AucklandKids Foundation of Wellington WellingtonKids Foundation of Auckland AucklandKoru Care Charitable Trust AucklandKumeu A & H Society KumeuLa Leche League New Zealand Upper HuttLeabank Primary School AucklandLions Club of Tauranga TaurangaLions Club of Wellington WellingtonMangere Bowling Club AucklandMarlborough Amateur Radio Club BlenheimMartinborough Bowling Club WellingtonModel A Car Club Inc NapierModel T Ford Club Rally MorrinsvilleMore FM Zoo Safari AucklandMurupara School MuruparaMuscular Dystrophy Association WellingtonNaenae Intermediate Venture Class NaenaeNapier Indoor Bowls NapierNew Zealand Corrections Offi cers Golf Tournament HastingsNew Zealand Deaf Rugby Football Union ChristchurchNew Zealand Hot Rod Nationals RotoruaNew Zealand Indoor Ladies’ Cricket AucklandNew Zealand Land Search and Rescue NelsonNew Zealand Sign Language Tutors Association AucklandNew Zealand Suicide Prevention Trust AucklandNew Zealand Womens Water Polo WellingtonNewtown Community Creche NewtownNgahina Kindergarten ParaparaumuNgaio School WellingtonNorth Hokianga A&P Show KohukohuNorthcote Primary School AucklandNorthland Dressage WhangareiOnerahi Indoor Bowling Club OnerahiOrini Scout Troop TaupiriOtago Master Plumbers DunedinOur Lady of the Rosary School WellingtonOwairoa Primary School AucklandPaekakariki School PaekakarikiPaekakariki Volunteer Fire Brigade WellingtonPapakura Central School AucklandPaparore School AwanuiParaparaumu Beach School ParaparaumuParemata Kindergarten PoriruaParent and Family Resource Centre AucklandParkinsons New Zealand WellingtonPiopio Primary School PiopioProduction Racing Series AucklandPukenui School Te KuitiPukerua Bay School WellingtonRadio Lollipop AucklandRadio Networks AucklandRangitaiki School TaupoRangitikei Golf Club BullsRata Kindergarten TemukaRichmond Road School Auckland

Riverhead School RiverheadRosedale Intermediate School InvercargillRoslyn Kindergarten Palmerston NorthRotary Club of Newmarket AucklandRotary Club of Waikato HamiltonRotary Club of Waitakere City Waitakere CityRotary Club of Wellington WellingtonRoto-o-Rangi School CambridgeSave the Children Save the Children Charity Golf Tournament WellingtonSeatoun Kindergarten WellingtonShirley Football Club ChristchurchSilverdale RSA Bowling Club AucklandSouthern Cross Sea Scouts TaurangaSouth Featherston Town and Country School FeatherstonSouth Wairarapa Workingmen’s Club WairarapaSPCA AucklandSpecial Olympics WellingtonSpencerville Residents’ Association ChristchurchSpringbank School KerikeriSt Brigid’s School JohnsonvilleSt John Youth Adventures WellingtonSt Nicholas Scout Group ChristchurchSts Peter and Paul School Lower HuttSt Peter Chanel School OtakiSt Teresa’s School WellingtonStokes Valley Soccer Club Lower HuttSunrise Rotary Club ChristchurchTaita RSA Lower HuttTamatea Intermediate School NapierTapanui School West OtagoTe Awamutu Volunteer Fire Brigade Te AwamutuTe Kauwhata Primary School Te KauwhataTe Korowai Hauora o Hauraki ThamesTe Puka Hereka Te AnauTe Puke Kindergarten Te PukeThe Brain Injury Association Auckland Branch AucklandThe Brain Injury Association of Hastings HastingsThe Brain Injury Associationof New Plymouth New PlymouthThe Cancer Society of New Zealand WellingtonThe Family Mission AucklandThe Feilding Croquet Club FeildingThe Halberg Trust Tennis Charity WellingtonThe Jowett Car Club AucklandThe Radio Network Special Children’s Party AucklandThe Rotary Club of Rotorua RotoruaTokomaru School TokomaruTrengore Kindergarten ChristchurchTritea Pony Club Palmerston NorthTS Vindicatrix Association WellingtonUK Link Foundation WellingtonUnitec New Zealand AucklandUnited Way AucklandVariety Club 2004 AucklandVictoria University Recreation Centre WellingtonWaihi College WaihiWainoni Playcentre ChristchurchWaipu Golf Club RuakakaWairarapa Country Music MastertonWaitemata Green Team WaiataruaWanganui School WanganuiWellington City Mission Wellington Wellington Region Freemasons’ Charity Golf WellingtonWellington’s Longest Lunch WellingtonWesley Wellington Mission WellingtonWhangaparaoa School WhangaparaoaWhangarei Indoor Bowling WhangareiWoodstock School HamiltonWrightsons Marton Ltd MartonWrightsons Takaka TakakaYeatman Brothers AshburtonYouthline Christchurch

3.4 Who BP works withBelow are some of the community organisations to which BP made contributions in 2004. With such

a large number of requests coming to BP annually we do need to stick to certain criteria. BP prefers to

assist schools, kindergartens, community groups, and charities in the communities in which BP operates.

BP is unable to make donations to individuals.

BP in the community



This project, to construct three new

bulk fuel storage tanks at the Port,

has set an industry benchmark in

terms of community consultation,

environmental planning, innovative

design and commitment to safety.

As a major fuel storage and

distribution hub, Lyttelton has the

oldest and the highest number

of oil tanks of any port in the

country and receives four times

more oil tanker visits than most

other New Zealand ports.

Through Project Saturn, BP has

led the beginning of an overhaul of

the Port’s fuel storage infrastructure

with three state-of-the-art storage

tanks. The eight-million litre tanks

hold jet fuel, diesel and petrol and

have increased the Port’s total fuel

storage capacity by one-third. The total

cost of the project from planning to

completion was around $15 million.

The scale of the project and the

logistics associated with major

construction on reclaimed land posed

a number of challenges for BP.

A particular focus was on involving

the local community and factoring

their views into the project.

From early on, BP began a

dialogue with the residents of the

area. Concerned that the typical

‘public meeting’ format did not

allow either personal or detailed

communication, BP held a number of

‘information evenings’ for residents.

Leaflets were distributed across

surrounding neighbourhoods

and BP staff were at a location

between set times to meet with

residents, talk through the plans

and answer their questions.

This new approach to community

consultation allowed a much greater

3.5 Saturn tanks: a new approach to community consultationWith demand for fuels continuing to grow in the South Island, BP recently found it was rapidly

outgrowing its fuel storage capacity at the Port of Lyttelton. In order for BP to continue meeting

the needs of its customers into the future, ‘Project Saturn’ was born.



BP in the community

level of personal communication

between BP and residents and

allowed the company to explain the

project and its rationale in more depth,

and listen closely to concerns.

And with a plan to build 24 million

litres of new fuel storage capacity

at the Port, obviously there were

community concerns which BP went

to considerable lengths to address

throughout the consultation, resource

consent and construction process.

BP’s consultation with the Lyttelton

Environment Group serves as proof

of the merits of the Project Saturn

community consultation model.

The Lyttelton Environment Group

had significant misgivings about the

project, and BP worked closely with

them to address their concerns.

At the end of the 18-month project

the Chair of this group spoke at

the tank opening ceremony about

how, through a genuine dialogue

and a willingness to consult, her

group felt its concerns had been

addressed and was satisfied with

the safety and the environmental

safeguards around the project.

The construction of the facility

itself was no less thorough. As

the construction site was on

reclaimed land, the new tanks

incorporate the safest and most

modern design specifications.

Similar to the technology used at

Westpac Stadium in Wellington and

at Jade Stadium in Christchurch,

each tank has a support base of

211 stone columns. These 14-metre

deep columns are constructed from

graded stone and are compacted into

place. They stiffen and strengthen

the soil, preventing ground failure

and minimising tank settlement.

The site incorporates an interceptor

system to ensure no fuel enters the

stormwater system and a sealed,

walled compound which ensures

that, even if the entire contents

of a full tank were to leak, all fuel

would be contained on the site.

The petrol storage tank uses what is

called a ‘floating blanket’ which floats

on top of the stored fuel and reduces

the emissions of petrol vapour into

the atmosphere by around 96%.

BP has also introduced a fire water

supply which can pump at 12,000 litres

per minute (up from the previous 3,600

litres per minute), and a state-of-the-art

foam supply system to ensure safety

in the unlikely event of an emergency.

These facilities can be used

by the Fire Service to fight fires

anywhere in the wider Lyttelton

reclamation area. BP’s fire

protection systems are equivalent

to, or better than, any other fire

protection systems in New Zealand

or overseas for this type of facility.

The construction of these tanks

also set a benchmark in terms of BP’s

commitment to workplace health and

safety. During the 18 months and more

than 70,000 hours of construction

time to complete the project, there

was not a single lost-time injury.

When the construction of the

tanks was completed in June 2004,

BP worked with the community

and a colour consultant to decide

what colour the tanks should be

painted in order to minimise their

visual impact. Three slightly different

shades were selected to ensure

the tanks most effectively blended

with the natural environment.

The profit from the first truck-

load of fuel from the new tanks was

donated to the Quail Island Ecological

Restoration Trust in Lyttelton Harbour.

The Project Saturn tanks will enable

BP to continue providing our South

Island customers with a secure

supply of fuel well into the future.

This project represents a major

investment both in the South Island’s

fuel infrastructure and in working

co-operatively with the local

community to meet its needs

and address its concerns.

BP’s new $15-million fuel storage tanks at the Port of Lyttelton.


Objectives and scope URS New Zealand

has carried out an independent audit

of the 2004 Sustainability Report of BP

Oil New Zealand Limited (the Report)

to provide assurance to readers on the

accuracy of the report content and to

provide guidance on appropriateness

and completeness of reporting.

Methodology URS’s audit methodology

was drawn from the AA1000 Assurance

Standard (March 2003), an international

standard developed to ensure

the credibility of an organisation’s

public reporting on social, economic

and environmental performance.

Specifically, the audit was designed to

investigate the ‘Evidence’ – whether

BP New Zealand has provided adequate

evidence to support the information

contained in the report. The AA1000

principles of Completeness, Materiality

and Responsiveness guided feedback

on enhancements to the current and

future reports.

In order to form our conclusions we:

• Reviewed the draft Sustainability

Report 2004 to identify statements

of fact, claims and data requiring

verification.

• Sighted specific documented

information, computer and hard-copy

files, data sources and data regarding

BP New Zealand’s sustainability

performance. (While we saw

documentation to support the data

contained within the Report, we

did not test the data processes for

gathering, collating and reporting

data.)

• Conducted interviews with key

personnel at BP’s Head Office.

The interviews included a discussion

on whether BP New Zealand’s key

issues relating to sustainability were

included in the Report.

• Interviewed appropriate external

media from most of New Zealand’s

major news providers, and searched

internet media sources for issues

related to BP’s sustainability

performance.

• Identified errors or weakness in data,

provided feedback to BP and verified

the final Report.

Conclusions Are the key issues covered in

the Report? Based on our review BP has

covered the key issues identified by BP

as critical to the company operations

in New Zealand. BP demonstrated a

willingness to amend or add text to

address any gaps that we identified. Two

specific gaps remaining are reporting on

health and safety targets and reporting

on any ongoing remediation of BP sites,

both of which were identified in BP’s

Sustainability Report for 2003.

Further explanation of data trends

included in the Report, particularly

unfavourable results, could also have

been enhanced in some areas. For

example, further discussion of any

increases or decreases in internal

CO2 emissions and customer

complaints compared with previous

years would add value to the

Report. Decisions on critical issues

to include in the Report would be

facilitated by the creation of targets

and commitments for future reports

to follow up. This has been noted by

URS during previous verifications.

Based on interviews with external

media the Report provides a balanced

representation of issues raised in

the media review concerning BP’s

sustainability performance. Those

issues identified consistently were

rising fuel prices, the composition of

fuel prices, and security of fuel supply.

The exception was New Zealand oil

reserves – media interviewed by

URS raised the issue of government

commitments to the International

Energy Agency. While this commitment

is not an obligation for BP or other

industry members it is of interest to the

public within the oil industry context.

Are the Report’s data, statements and

assertions regarding BP New Zealand’s

sustainability performance supported

by evidence or explanation? Evidence

obtained through our work supports

the data, statements and assertions

regarding BP New Zealand’s

sustainability performance in the Report.

Where evidence could not be provided,

or where the statements made were

inconsistent with the evidence available,

the text was amended by BP. However,

we note that verification would be

URS New Zealand Limited Verification Statement



facilitated by more robust data

collection systems.

It was clear throughout the

verification process that BP is

committed to achieving a transparent

and comprehensive report relevant

to their stakeholders. It was also

apparent that their commitment to

sustainability is given considerable

weight in management decisions.

We commend BP on their 2004

Sustainability Report and look forward

to future reports reflecting improved

performance and further commitments

to sustainable development.

Disclosure URS New Zealand provides

engineering and environmental

consultancy services to BP. This

relationship has not influenced the

independence of the verification

findings. URS New Zealand verified

the findings of BP’s 2002 and 2003

Sustainability Report.

URS New Zealand Limited

Sara Clarke, Principal

June 2005

DISCLAIMER

It should be noted that the veracity of the information summarised in the Report is dependent upon the uniformity, consistency and thoroughness of site/operational staff reporting all relevant matters. While URS identifi ed a good appreciation of BP New Zealand’s Sustainability Challenges, URS did not and cannot determine precisely the uniformity, consistency and thoroughness of reporting. URS has prepared this Statement for the use of BP New Zealand in accordance with the usual care and thoroughness of the consulting profession. The opinions provided are based on generally accepted practices and standards at the time they were prepared. No other warranty, expressed or implied, is made as to the professional advice included in this Statement. To the extent permitted by law, URS excludes all liability that may arise from the professional advice contained in this Statement. No responsibility is accepted for use of any part or all of this Statement in any other context or for any other purpose or by third parties. No third party is entitled to rely on any matter contained in this Statement without URS’s prior consent in writing. Neither URS’s name nor the material submitted in this Statement may be included in any prospectus or used in offerings or representations in connection with the sale of securities or participation interest to the public without URS’s prior consent in writing. URS owes no duty of performance to any party other than our contracted client.



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The Communications ManagerBP Oil New Zealand LimitedBP House20 Customhouse QuayPO Box 892, WellingtonNew Zealandwww.bp.co.nzTel: +64 4 495 5656Fax: +64 495 5504

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BP Oil New Zealand Limited

BP House, 20 Customhouse Quay

PO Box 892

Wellington

New Zealand

www.bp.co.nz

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