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This article is about the corporation known as BP. For other uses, see BP (disambiguation).
BP plc
Company typePublic (LSE: BP, NYSE: BP)
ISINDE0008618737 Edit this on Wikidata
IndustryOil and Gasoline, Alternative fuel
Founded1908 (as the Anglo-Persian Oil Company)
1954 (as The British Petroleum Company)
HeadquartersUnited Kingdom London, United Kingdom
Key people
Donald Alexander Smith (founding chairman)
Tony Hayward (current CEO)
Byron Grote, CFO
ProductsBP petroleum and derived products
BP service stations
Castrol motor oil
ARCO gas stations
am/pm convenience stores
Aral service stations
RevenueIncrease$274.316 Billion USD (2006)
Increase $35.158 Billion USD (2006)
Increase $22.286 Billion USD (2006)
Total assets288,120,000,000 United States dollar (2022) Edit this on Wikidata
Number of employees
96,200 (2005)
Websitewww.bp.com www.amoco.com

BP plc (LSE: BP), NYSE: BP, TYO: 5051), originally British Petroleum, is a British energy company / multinational oil company ("oil major") with headquarters in London. The company is amongst the largest private sector energy corporations in the world, and one of the six "supermajors" (vertically integrated private sector oil exploration, natural gas, and petroleum product marketing companies).

Recent developments

In August 1998, British Petroleum merged with the Amoco Corporation (Amoco), forming "BP Amoco." This move was widely viewed as a takeover of Amoco by BP and considered officially described as a merger for only legal reasons [citation needed](in 2001, "Amoco" was dropped from the corporate name). The newly-renamed "bp" became an initialism no longer overtly standing for "British Petroleum". At the same time BP used the punning tagline "Beyond Petroleum" in some advertising campaigns. The step away from "British Petroleum" was in part a reflection of the fact that BP had become a global business and also that the direct identification of the company as British could be a disadvantage in some areas of operation[citation needed].

In the 2006 Fortune Global 500 list of companies, BP was ranked 4th in the world for turnover with sales at $268 billion (down from 2nd in 2005 and 1st among oil companies), in the 2006 Forbes Global 2000 it was ranked the eighth largest company in the world.

BP Solar became the third largest producer of solar panels in the world through a series of acquisitions in the solar power industry. Recently, BP announced that its solar, wind and hydrogen power businesses would be known as BP Alternative Energy.

BP is the leading partner in the controversial Baku-Tbilisi-Ceyhan pipeline.

However, BP was indicted by the U.S. Chemical Safety and Hazard Investigation Board for its role in the Texas City Refinery (BP) disaster in 2005, and is being investigated by other US agencies for allegations of market manipulation, and pollution from its pipeline at Prudhoe Bay.

Further controversy occurred at a shareholder meeting on April 12 2007, when a lavish pension deal was approved for Lord Browne, the outgoing CEO.

Lord Browne unexpectedly resigned suddenly on May 1 2007 after admitting to lying in court in a case concerning his affair with a male escort. His official departure from the company was not due until later in the year.

Origins and history

1909 - 1955

In May 1901, William Knox D'Arcy was granted a concession by the Shah of Iran to search for oil which he found in May 1908. This was the first commercially significant find in the Middle East. On 14 April 1909, the Anglo-Persian Oil Company was incorporated to exploit this find. The company grew slowly until World War I when its strategic importance led the British Government to acquire controlling interest in the company and it became the Royal Navy's chief source of fuel oil during World War I[citation needed].

In 1920, the war allowed it to take the British arm of the German Europäische Union, which used the trade name British Petroleum. After the war ended, the company, in which the British Government now had a 51% interest, moved to secure outlets in Europe and elsewhere. However, its main concern was still Persia, following the Anglo-Persian Agreement of 1919 the company continued to trade profitably in that country.

In 1931, partly in response to the difficult economic conditions of the times, BP merged their marketing operations in the United Kingdom with those of Shell-Mex Ltd to create Shell-Mex and BP Ltd a company that continued to trade until the Shell and BP brands separated again in 1975.

There was growing dissent within Persia however at the imperialist and unfair position that APOC occupied. In 1932, the Shah terminated the APOC concession. The concession was resettled within a year, covering a reduced area with an increase in the Persian government's share of profits. Persia was renamed Iran in 1936 and APOC became AIOC, the Anglo-Iranian Oil Company.

Following the turmoil of World War II, AIOC and the Iranian government resisted nationalist pressure to come to a renewed deal in 1949. In March 1951, the pro-western Prime Minister Ali Razmara was assassinated and in April, a bill was passed nationalising the oil industry and the AIOC and the Shah were forced to leave the country.

The AIOC took its case against the nationalisation to the International Court of Justice at The Hague, but lost the case. However the government of Britain, concerned about its interests in Iran, convinced the US that Iran was slowly coming under Soviet influence. This was the perfect strategy for the British since the US was in the middle of the Cold War. The British convinced the US to join them in overthrowing the democratically chosen Prime Minister, Mohammed Mossadeq, and to install pro-Western General Fazlollah Zahedi as prime minister of Iran. This overthrow was named Operation Ajax. Mohammed Mossadeq thought that nationalization was the only way to prevent British exploitation of Iran's oil wealth.

On August 19 1953, the incumbent democratic Prime Minister, Mohammed Mossadeq, was forced from office and replaced by Zahedi and the Shah was recalled. The AIOC became The British Petroleum Company in 1954, and briefly resumed operations in Iran with a forty per cent share in a new international consortium. BP continued to operate in Iran until the Islamic Revolution. However, due to a large investment programme (funded by the World Bank) outside Iran, the company survived the loss of its Iranian interests at that time.

1960s and 1970s

File:BP old logo.png
The BP logo used from 1989 to 2001.

From the late 1960s the company looked beyond the Middle East to the USA (Prudhoe Bay, Alaska) and the North Sea. Both of these fields came on stream in the mid-1970s transforming the company and allowing BP to weather the OPEC-induced oil price shocks of 1973 and 1979. In 1969, BP acquired the Valdez oil terminal, Alaska, from the Chugach for $1. Some natives contend that this was an illegal transfer.

In the mid-1970s, BP acquired Standard Oil of Ohio or Sohio.

1980s and 1990s

File:Gas station (night).jpg
BP petrol station using the 1989-2001 logo

P.I. Walters (later Sir Peter Walters) was BP's chairman from 1981 to 1990. Walters promoted a movement to deintegrate company operations based solely upon economic considerations: "For me, there is no strategy that is divorced from profitability," he once remarked. Under his chairmanship British Petroleum led the oil industry away from an era dominated by vertical integration and the supply planning this required toward a corporate culture that emphasised trading and decentralisation (Daniel Yergin, The Prize [Simon & Schuster, 1991], pp. 722-23).

In 1987, British Petroleum negotiated the acquisition of Britoil and those shares of Standard Oil of Ohio (Sohio) through CEO Charlie Spahr not already owned. In 1994, BP and Petroleos de Venezuela SA (PDVSA) began marketing Orimulsion®, a bitumen-based fuel. Lord Browne of Madingley, who had been on the board as managing director since 1991, was appointed group chief executive in 1995.

In the 90s most of Mobil's UK stations were sold off to BP, with them becoming BP Service Stations. The rest were turned into Essos which is the local name for Exxon in the UK.

Present

Chief Scientist of BP, Steven Koonin (top right, with computer), speaks about the energy scene in the boardroom in 2005.

British Petroleum merged with Amoco (Formerly Standard Oil of Indiana), in December 1998, becoming BPAmoco until 2000, when it was renamed BP and adopted the tagline "Beyond Petroleum," which remains in use today. It states that BP was never meant to be an abbreviation of its tagline. Most Amoco gas stations in the United States have changed the look and name to the bp brand. In many states, however, BP is selling Amoco branded gasoline, as it was rated the #1 petroleum brand by consumers 16 years in a row (the name of the service station itself is still BP) and Amoco has one of the highest brand loyalty for gasoline in the US with only Chevron and Shell having such high rates as BP/Amoco. In 2000, British Petroleum acquired Arco (Atlantic Richfield Co.) and Burmah Castrol plc.

File:BP Brands.jpg
BP's consumer brands

In April of 2004, BP decided to move most of its petrochemical businesses into a separate entity called Innovene within the BP Group. Their intention was to sell the new company possibly via an Initial Public Offering (IPO) in the US, and in fact they filed their IPO plans for Innovene with the New York Stock Exchange on September 12 2005. However, on October 7 2005, BP announced that they had agreed to sell Innovene to INEOS, a privately held UK chemical company for the sum of $9 billion, thereby scrapping their plans for the IPO.

On March 23 2005, an explosion occurred at BP's Texas City Refinery in Texas City, Texas. It is the third largest refinery in the United States and one of the largest in the world, processing 433,000 barrels of crude oil per day and accounting for 3% of that nation's gasoline supply. Over 100 were injured, and 15 were confirmed dead, including employees of the Fluor Corporation as well as BP. BP has since accepted that its employees contributed to the accident. Level indicators failed, leading to overfilling of a heater, and light hydrocarbons spread throughout the area. An unidentified ignition source set off the explosion. [1]

According to some private BP-branded gasoline center operators in the Metro Atlanta area, BP plans to leave the Southern Market in the next few years. All corporate-owned BP stations, typically known as "BP Connect" will be sold to local jobbers.[citation needed]

In March of 2006, one of BP's pipelines in the North Slope of Alaska ruptured, causing a major environmental hazard. [2]

BP has recently started to move its oil exploration activities away from the North Sea and Alaska and is looking into the former Soviet Union for its future reserves.[1] On July 19, 2006, BP announced that it would close the last 12 out of 57 oil wells in Alaska, mostly in Prudhoe Bay, that had been leaking. The wells were leaking insulating agent called Arctic pack, consisting of crude oil and diesel fuel, between the wells and ice.[2]

On 12 January 2007, it was announced that Lord Browne would retire at the end of July 2007. The new Chief Executive will be the current head of exploration and production, Tony Hayward. It had been expected that Lord Browne would retire in February 2008 when he reached the age of 60, the standard retirement age at BP. Browne resigned abruptly from BP on 1 May 2007, following the lifting of a legal injunction preventing Associated Newspapers from publishing details about his private life. Hayward succeeded Browne with immediate effect.

As of February 11, 2007 BP announced that they would spend 8 billion dollars over ten years to research other methods of fuel.

Prudhoe Bay shutdown

As of August 7, 2006, BP has begun to shutdown oil operations in Prudhoe Bay, Alaska, due to corrosion in the pipeline. This corrosion is caused by sediment collecting in the bottom of the pipe, protecting corrosive bacteria from chemicals sent throught the pipeline to fight this bacteria. Prudhoe Bay produces about 2.6% of the United States demand for gasoline. It was initially estimated that the shutdown would cause a reduction of 400,000 barrels per day and reaction to that scenario was a contributing factor pushing the price of oil to over $77(USD) per barrel.[3]To, date 1,513 barrels of liquids, about 5,200 cubic yards of soiled snow and 328 cubic yards of soiled gravel have been recovered. There are estimates that about 5,000 barrels of oil were released from the pipeline. After further analysis and approval from the DOT, only the eastern portion of the field was shut down which resulted in a reduction of 200,000 barrels per day until work began to bring the eastern field to full production on Oct 2.[4]

File:Bp-solarmodul.JPG
Solar panel made by BP Solar

In 2000 the company was renamed BP, with no meaning given to the letters. Its new slogan, "Beyond Petroleum", was accompanied by the rebranding of its famous "Green Shield" logo in favour of the helios symbol (a green and yellow sunburst) to emphasise the company's focus on environmentally friendly fuels and alternative energy. This is intended to move BP away from the negative environmental image of most oil companies. However, some environmental groups have accused BP of trying to greenwash their public image, and that their alternative energy credentials are not serious investments but merely a PR exercise.

BP is a leading producer of solar panels since its purchase of Lucas Energy Systems in 1980 and Solarex (as part of its acquisition of Amoco) in 2000. BP Solar had a 20% world market share in photovoltaic panels in 2004 when it had a capacity to produce 90 MW/year of panels. It has over 30 years experience operating in over 160 countries with manufacturing facilities in the U.S., Spain, India and Australia and has more than 2000 employees worldwide.

BP/Amoco was a member of the Global Climate Coalition an industry organisation established to promote global warming skepticism but withdrew in 1997, saying "the time to consider the policy dimensions of climate change is not when the link between greenhouse gases and climate change is conclusively proven, but when the possibility cannot be discounted and is taken seriously by the society of which we are part. We in BP have reached that point."[5].

In February 2002 BP's chief executive, Lord Browne of Madingley, renounced the practice of corporate campaign contributions, noting: "That's why we've decided, as a global policy, that from now on we will make no political contributions from corporate funds anywhere in the world." [3]

In March 2002 Lord Browne of Madingley declared in a speech that global warming was real and that urgent action was needed, saying that "Companies composed of highly skilled and trained people can't live in denial of mounting evidence gathered by hundreds of the most reputable scientists in the world.".[4] In 2005 BP was considering testing carbon sequestration in one of its North Sea oil fields, by pumping carbon dioxide into them (and thereby also increasing yields).[5]

In 2004, BP began marketing low-sulphur diesel fuel for industrial use. BP intends to create a network of hydrogen fuelling stations in the state of California.

Texas City Refinery (BP) Disaster

One of BPs largest refineries in the USA exploded in 2005 causing 15 deaths. The fall-out from the accident continues to cloud BPs corporate image because of the mis-management at the plant. There have been several investigations of the disaster, the most recent being that from the U.S. Chemical Safety and Hazard Investigation Board. It was preceded by the Baker report and BPs own internal investigation.

Essentially, a large column filled with gasoline overflowed to form a vapour cloud, which ignited. The explosion caused all the casualties and substantial damage to the rest of the plant. The incident came as the culmination of a series of less serious accidents at the refinery, and the engineering problems were not addressed by the management. Maintenance and safety at the plant had been cut as a cost-saving measure, the responsibility ultimately resting with executives in London.

West Papua

BP has come under heavy criticism from human rights groups, especially the Free West Papua campaign for developing a massive natural gas project in the region. This project will fund the Indonesian occupation of West Papua and has not been agreed by the West Papuan people. Furthermore BP have gone into business with the Indonesian regime without criticising the occupation (which has killed more than 100 000 people). Comparisons have been drawn between BP's presence in West Papua, Shell's presence in Nigeria and Total's presence in Burma. A leaflet published by the Free West Papua campaign used the letters "BP" as initials for "bleeding papua".

Other Problems

However, BP's image has been tarnished somewhat by its involvement with the controversial Baku-Tbilisi-Ceyhan pipeline, criticised for human rights abuses, environmental and safety concerns[citation needed].

BP has also been criticised for the increase in fuel prices in the UK, on April 25 2005 Lord Browne stated in an interview with the BBC that he fully expected petrol prices to stay above £1 per litre. [6] BP has also been involved in bringing lawsuits against biofuel and biodiesel producers and sellers in France and other countries.[citation needed]

In July 2006, a group of Colombian farmers won a multimillion pound settlement from BP after the British oil and gas company was accused of benefiting from a regime of terror carried out by Colombian government paramilitaries to protect a 450-mile pipeline.[7]

On August 7 2006, BP reported that their Prudhoe Bay oil field had to be shut down after a pipeline inspection gauge determined there was excessive corrosion in the transport pipeline[6]. BP was criticized for the maintenance practices on the damaged pipeline, which was last inspected for corrosion in 1992[7].

BP have started a scheme for car owners to purchase carbon offsets called Target Neutral.

As of February 11, 2007 BP announced that they would spend 8 billion dollars over ten years to research alternative methods of fuel. A $500 million grant offered to the University of California, Berkeley, Lawrence Berkeley National Laboratories, and the University of Illinois at Urbana-Champaign, to create an "Energy Biosciences Institute"[8] has recently come under attack, over concerns about the global impacts of the research and privatization of public universities[9].

BP Retail Brands

This is BP's flagship retail brand name with BP Connect Service stations being operated around the UK, Europe, USA, Australia, New Zealand and other parts of the world. BP Connect sites feature the Wild Bean Cafe which offers cafe style coffee made by the staff and a selection of hot food as well as freshly baked muffins and sandwiches. The food offered in Wild Bean Cafe varies from each site. BP Connect sites usually offer table and chair seating and often an Internet kiosk.

This was the flagship BP brand prior to the introduction of BP Connect in 2000. There are still some BP Express sites operating around the world but most have been either upgraded to Connect or changed to an alternative brand. BP Express offers a bakery service but doesn't have the selection of food offered in the Wild Bean Cafe and usually coffee is only available through a self service machine.

  • BP Shop

Commonly used on smaller sites mainly independently owned sites. Products vary in each BP Shop but usually a selection of convience store style food and automotive products.

  • BP 2go

A franchise brand used for independently operated sites in New Zealand. BP 2go sites mainly operate in towns and outer suburbs in New Zealand. BP 2go offers similar bakery food to BP Connect but in a pre-packaged form. Some BP Express sites around New Zealand that were considered too small to be upgraded to BP Connect were given the option to change to BP 2go others were downgraded to BP Shop. Staff at BP 2go sites wear a different style of uniform to the rest of the BP branded sites.

See also

Notes

  1. ^ "Penny Shares Online : BP(BP.)". 2006-07-10. Retrieved 2006-07-10. {{cite web}}: Check date values in: |date= (help)
  2. ^ Mark Tran (2006-07-19). "BP shuts leaking Alaskan wells". "Guardian Unlimited". {{cite news}}: Check date values in: |date= (help)
  3. ^ "Alaska oil shutdown hikes prices". CNN. 7 August 2006. Retrieved 2006-08-08. {{cite news}}: Check date values in: |date= (help)
  4. ^ "Alaska Update". BP. 2 October 2006. {{cite news}}: Check date values in: |date= (help)
  5. ^ "Global Climate Coalition". Sourcewatch.
  6. ^ http://news.yahoo.com/s/ap/20060808/ap_on_bi_ge/oil_field_shutdown
  7. ^ http://www.usatoday.com/money/industries/energy/2006-08-08-pipeline-usat_x.htm
  8. ^ http://www.ebiweb.org/
  9. ^ http://www.stopbp-berkeley.org/
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