The recent full year result provides an opportunity to reflect on some of the strides we have taken in 2014, and serves to remind us to stay focused on our 2015 priorities in these turbulent times. Reporting that entitlement production grew 7% and generated an underlying profit of USD 1 billion were aspects to be satisfied with.
Similarly, bringing Golden Eagle and Jack on stream and installing the new Tyra Southeast platform on time illustrate the good progress we are making on delivering our strategic targets. All this was done with the best safety performance ever.
However, our exploration performance remained challenged and the asset write-down from Brazil cast a shadow over a year in which a strong performance should have dominated the headlines.
Looking at the challenges and opportunities of the year ahead, it is important that we focus on the areas where our efforts will have the biggest impact. In 2014, we made good progress in the areas of safety, operations and project execution. During 2015 the Incident-Free Refresher, and Five Year Process Safety Plans are integral to improving safety performance. Continuation of the Production Excellence and Maintenance Excellence programmes as well as the Offshore Capability programme will help us on the operations side.
Leveraging the slowing market to optimally place the contracts on the big projects that we plan to sanction this year, such as Culzean and Johan Sverdrup will give us a kick start in project execution. The combination of our efforts in 2015 will enable us to deliver our short and long term profit and production targets.
We cannot address our priorities for 2015 without also addressing the most profound recent change in our industry – the massive decline in the oil price. Our Cost Transformation programme, targeted at reducing our baseline operating costs by 10% in 2015 and another 10% in 2016 will play a decisive role in shaping the Maersk Oil, which will emerge from the current low-price environment.
Many of the Cost Transformation initiatives launched
now will only have effect towards the end of 2015. We are however already now tracking the effects of our immediate actions, such as renegotiation of supplier contracts, more disciplined travel and training activities etc. The development in these costs will be a good proxy for the Cost Transformation mindset, which we hope takes root during 2015.
The combined effort of continuing our success in the base business and executing the Cost Transformation with urgency will create our platform for future growth. The oil price drop has the potential of creating opportunities in the market for companies with capacity to grow. The strong financial position of the APMM group will enable us to pursue opportunities with a strong strategic fit and with attractive returns.
We cannot influence the evolving price scenario, but we can and will improve our production base business and position ourselves for growth. As a Group we have shown the capacity to thrive in turbulent times. With that in your minds I wish you all a successful and productive year ahead.