BP COMPANY CASE

group 2
 COMPANY OVERVIEW
Products. The Company offers fuel for
transportation, energy for heat and light, lubricants
to keep engines moving and the petrochemicals
products used to make everyday items as diverse as
paints, clothes and packaging.

Location. It has operations in Europe, North and

South America, Australasia, Asia and Africa.
Segments. The Company's segments include Upstream,
Downstream, Rosneft, and Other businesses and
corporate. The Upstream segment is engaged in oil and
natural gas exploration, field development and
production, as well as midstream transportation, storage
and processing. The Downstream segment has global
manufacturing and marketing operations. The Rosneft
segment has a resource base of hydrocarbons onshore and
offshore. The Other businesses and corporate segment
comprises the biofuels and wind businesses, shipping and
treasury functions, and corporate activities around the
world.
• BP plc or formerly known as The British Petroleum Company
plc.
• British Petroleum and BP Amoco plc, is a British multinational
oil and gas company, and its headquarters is located in London,
England.
• It is one of the world's seven oil and gas "super majors" whose
performance in 2012 made it the world's sixth-largest oil and
gas company.
• It is the sixth-largest energy company by market
capitalization, and ranking in 12th in overall largest revenue in
the world.
• It operates in all areas of the oil and gas
including exploration and production, refining, distribution and
marketing, petrochemicals, power generation and trading. It also
has renewable energy interests in biofuels and wind power.
• As of 31 December 2017, BP had operations in 70 countries
worldwide, produced around 3.6 million barrels of oil per
day, and had total proved reserves of 18.441 billion barrels of
oil equivalent.
• The company has around 18,300 service stations worldwide.
Its largest division is BP America in the United States.
• In Russia, BP owns a 19.75% stake in Rosneft, the world's
largest publicly traded oil and Gas Company by hydrocarbon
reserves and production.
• BP has a primary listing on the London Stock Exchange and
is a constituent of the FTSE 100 Index. It has secondary
listings on the Frankfurt Stock Exchange and the New York
Stock Exchange.
 A BRIEF HISTORY OFBP
1901 • William Knox D'Arcy, the founder of BP, entered the oil industry in
1901 by obtaining an oil concession in Persia (Iran).

1909 • In 1909, D’Arcy formed the Anglo-Persian Oil Company (APOC).

1913 • British navy switched from coal to oil. In order to protect its
supplies of this now-crucial military resource, the British
Government acquired a controlling share (50.0025%) of APOC in
1913.

1935 • It was renamed the Anglo-Iranian Oil Company (AIOC), in 1935.

1954 • and changed its name to the British Petroleum Company Limited
in 1954.

1959
• In 1959, the company expanded beyond the Middle East to Alaska
 A BRIEF HISTORY OFBP
1965 • In 1965, it was the first company to strike oil in the North Sea.

• The name British Petroleum Company PLC was adopted in 1982.

1982

1987 • The British government privatised the company in stages

between 1979 and 1987.

1998 • British Petroleum merged with Amoco in 1998, becoming BP

Amoco plc,

2001 • acquired ARCO and Burmah Castrol in 2000, becoming BP plc in

2001.
 SWOT ANALYSIS

S Strengths
W
Weaknesses

•One of the biggest company in the energy • Cost of environmental hazards

sector
• Oil spill in the Gulf of Mexico
• Wide geographic presence
• Negative Public Perception
• High quality operations
• Decline in production
• Strong Brand Name
• Robust research and development initiatives
• Vertically integrated operations

Opportunities
O T
• Increasing fuel/oil prices
• Increasing natural gas market
• More oil well discoveries
• Expand export market
• Investments in alternative energy business
Threats
• Government regulations
• Risks concerning environmental regulations
• Highly competitive industry
• Increasing Cost of Operations
Internal Environment and Analysis

This case will provide an opportunity to observe the effects of BP to

improve its image and manage decisions related to ethics and social
responsibility. Although BP has sought to establish itself as an ethically
responsible company, certain disasters resulting from company negligence
show that the company it has often failed in the past.

Vision and Mission

Vision
To have the best corporate, operating and financial performance. To
improve, and to be accessible, inclusive and diverse.

Mission:
In all their activities we seek to display some unchanging, fundamental
qualities – integrity, honest dealing, treating everyone with respect and
dignity, striving for mutual advantage and contributing to human progress.
Employees
At BP employees enjoy an inclusive work environment
where they can make the most of a range of benefits such as
flexible working, employee offers, company share schemes and
more. From the shop floor to the boardroom, the deep ocean to the
edge of space: with over 70000 people working in hundreds of
different roles, BP is a company with career choices to suit
everyone. It is in BP's interest to invest in our greatest assets - our
people - to ensure that what might start out as just a job becomes a
long and fulfilling career. BP values their employees and work
hard to retain those they recruit. That’s why their reward packages,
work/life balance and training are amongst the best in the
industry.
Costumers

BP serves customers across a broad range of market sectors.

When it comes to business and general aviation, BP has the presence
and the people across the globe to meet people’s needs. BP is one of
the world’s largest networks of General Aviation fuel suppliers. BP
has expertise at every stage of handling, storing, transporting and into
plane activities and work with militaries across the globe. BP
provides its customers with fuel for transportation, energy for heat
and light, lubricants to keep engines moving and the petrochemicals
products used to make everyday items as diverse as paints, clothes
and packaging.
Questions about BP’s Ethical Conduct

• In March 2005, a huge explosion occurred at a BP-owned oil refinery in

Texas that Killed 15 employees and injured another 170.
• The company was found guilty for violating the Clean Air Act and was
ordered to pay 50$ million in criminal fines.
• BP admitted that it had ignored several procedures required by the Clean
Air Act for ensuring mechanical integrity and a safe start up between
1999 until the explosion in 2005.
• The BP was the first prosecution under a section of the Clean Air Act.
• The company was also charged when Alaskan oil pipelines leaked crude
oil onto the tundra and frozen lake.
• The fines were:
 12$ million in criminal fines.
 4$ million in payments to the National Fish and Wildlife
Foundation.
 4$ million in criminal restitution to the state of Alaska.
• The leaks that occurred on March and August of 2006, after BP
failed to respond to numerous red flags.
• BP was charged with conspiring to violate the Commodity
Exchange Act.
• The fraud involved purchasing more than the available supply, and
then selling it to other market well above market value.
• This sort of market manipulation is not tolerated in United States.
• The fines were as follow:
• $100 million in criminal penalties.
• $25 million to the U.S. Postal Inspection Consumer Fraud Fund.
• $125 million to the commodity Futures Trading Commission.
BP repairs its image

• The twenty-first century found stakeholders more wary

of companies, after decades of repeated violations and
misconduct on the part of oil industry. One way BP
worked to repair its damaged image by changing its
name from British Petroleum to simply BP. The company
invest around $1.4 billion, or 5% of its total capital
investment, in renewable energy like wind, solar power,
and biofuels.
BP works to improve sustainability

Wind

• BP has over 500 megawatts (MW) of installed capacity,

with 432 MW in operations.
• Starting in 2008, BP began full-scale commercial
operation in conjunction with wind farms across the
country.
• Including Cedar Creek in Colorado, a 274-wind turbine
outfit.
• BP’s installed wind capacity has the potential to supply
power to 6 million homes.
Solar
• BP has installed only 4 MW of solar panels in the
United States, those are going to Wal-Mart stores in
California.
• It does 70% of its solar business in Europe where
demand is higher.
• BP also has developed two of the largest solar power
plants in the world in Spain, projects that will supply
energy to up to a million homes.
• BP also supports the solar cities concept.
Bio-fuels
• BP sees biofuels as a significant part of its energy
portfolio for the next two decades, until better
alternative energy sources are perfected.
• BP became the single largest foreign stockholder
in a Brazilian bioethanol company.
• BP also been working with DuPont to develop
biobutanol, a biofuel with higher energy content
than bioethanol.
 BP REACHES STAKEHOLDERS WITH ITS
SUSTAINABILITY PROGRAMS

• BP has implemented environmental awareness programs

in Britain to help stakeholders understand the impacts of
global warming and the importance of sustainability
issues.
• BP is trying to help the environment by making people
more aware of their Carbon Footprint Toolkit.
• Its an award winning program designed to help high
school students to understand the impact of climate
change.
The code of conduct
• To help deal with BP’s growing reputation for ethical
misconduct, BP’s Ethics and Compliance team
organized the creation, publication and distribution of
a company code of conduct in 2005.
• They had to devise a plan to make the code a one-step
reference and guide to individual behaviour at BP.
• It would have to cover everything from health and
safety to financial integrity.
• The code of conduct was the largest mass
communication exercise ever attempted in BP.
Conclusion
• From the beginning, BP proved that it was able to overcome
significant obstacles.
• It went from near bankruptcy to being one of the largest energy
companies worldwide.
• BP has experienced a range of ethical issues, the most well-
known stemming from the company’s own negligence and
misconduct.
• It is not only investing in cleaner energy but also is trying to
repair its image by reducing environmental impact and cleaning
up areas after it has used them.
• From publishing a thorough code of conduct to investing in more
renewable energy to being the first major oil company to admit
that global warming is a threat to our future, BP has sought to
establish itself at the forefront of ethical energy companies.
Group Analysis

In a business setting, a company can never really

know what is about to happen. Problems and accidents
could happen anytime. To handle these sudden accidents
and problems, we think a company must be ready with
possible solutions for possible problems that may arise. A
company must take into consideration that they have a
responsibility to the community and the environment
overall. They should make sure that whatever operations
they do, it is not harmful for anyone and if problems arise
they must seek to solve the problem as soon as possible.
Group 2

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