BP
This article is about the corporation known as BP. See also BP (disambiguation)BP plc (, , ), originally
British Petroleum, is a
British energy company with headquarters in
London, one of four
vertically integrated private sector oil,
natural gas, and
petrol (gasoline) "
supermajors" in the world, along with
Royal Dutch Shell,
ExxonMobil and
Total.
As of August 7, 2006, BP has begun to shutdown oil operations in
Prudhoe Bay, Alaska. This is due to "unexpectedly severe corrosion" in the pipeline from Alaska into the States. Prudhoe Bay only produces about 2.6% of the United States demand for gasoline. This is a reduction of 400,000 barrels per day, which inadvertently caused the price of oil to spike to over $77(USD) per barrel.
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 was only officially described as a
merger for legal reasons (after a single year of joint operations, "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 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.
In the 2005
Fortune Global 500 list of companies, BP was ranked 2nd in the world for turnover with sales at $285 Billion, less than $3 billion dollars short of the number one spot held by
Wal-Mart, thus making BP the largest oil company in the world by turnover, in the 2005
Forbes Global 2000 it was ranked the ninth-largest company in the world. BP's profits in 2005 amounted to $22.698 billion with replacement cost profit after interest, tax and minority shareholders' interest taken into account of $19.3 billion
.
BP Solar is the world-leading producer of
solar panels 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.
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 a controlling interest in the company and it became the Royal Navy's chief source of fuel oil during World War I.
In 1917, 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 (only) 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 Mossadegh 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
 |
The BP logo used from 1989 to 2002. |
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
|
BP filling station using the 1989-2002 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 acquired
Britoil and those shares of
Standard Oil of Ohio (Sohio) 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.
 |
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 2002, 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 BP. In some states, however, BP is selling Amoco-branded gasoline, as it was rated the #1 petroleum brand by consumers numerous years in a row (the name of the 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.
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 a petroleum refinery in
Texas City,
Texas, that belonged to BP. 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]
BP America, the United States arm of BP, was named one of the 100 Best Companies for Working Mothers in 2004 by
Working Mothers magazine.
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.
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.
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.
Image
In 2002 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.
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 fueling stations in the state of
California.
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.
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.
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.
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.
[http://news.yahoo.com/s/ap/20060808/ap_on_bi_ge/oil_field_shutdown]. BP was criticized for the maintenance practices on the damaged pipeline, which was last inspected for corrosion in
1992.
[http://www.usatoday.com/money/industries/energy/2006-08-08-pipeline-usat_x.htm]*
BP Company Website*
BP's Corporate History*
Arco Brand Website*
BP Solar*
Company Details
