BP, sometimes referred to by its former name British Petroleum, is one of the world’s leading integrated oil and Gas enterprises. BP’s mission is to be a focused oil and gas company that delivers value over volume. They are pursuing this strategy or mission by setting “clear priorities, actively managing a quality portfolio, and employing their distinctive capabilities” (2013 Annual Report).
The “clear priorities” segment of this strategy consists of three phases: running safe, reliable, and compliant operations, achieving competitive project execution, and making disciplined financial choices. The “Quality Portfolio” feature of their strategy will focus on growing BP’s exploration position, building high-quality downstream businesses, and maintaining a renewed focus on high-value upstream assets. Finally the “Distinctive capabilities” aspect of the strategy involves applying advanced technology across the company’s “hydrocarbon value chain,” maintaining strong relationships with governments, partners, civil society, and others, and relying on the proven expertise of BP’s employees.
According to the 2013 Annual report, BP envisions creating long-term value for its shareholders by helping to meet growing demand for energy in a safe and responsible manner. While doing so, the company hopes to develop a reputation as a “world-class operator, a responsible corporate citizen, and a goodemployer” (2013 Annual Report). Furthermore, BP’s business model consists of four relatively simple steps, finding oil and gas, developing and extracting, transporting and trading, and manufacturing and marketing.
First, the company acquires the rights to explore for oil and gas. Once they find hydrocarbon resources, they create value by progressing them into reserves that will later on be distributed. Transportation occurs through pipelines ships, trucks, and trains. Using their trading and supply skills, BP also buys and sells at each stage in its value chain. Finally, they use technology and expertise to manufacture fuels and other products that deliver value to customers and end-users.
Today 100% of BP’s operations prioritize safety, especially after the Deep-water Horizon accident in 2010. The reinforced safety initiative that BP has adopted and has held at the forefront of its corporate vision and strategic goals can be seen through the company’s new OMS or Operating Management System. “OMS integrates BP requirements on health, safety, security, environment, social responsibility and operational reliability, as well as related issues such as maintenance, contractor management and organizational learning, into a common management system” (2013 Annual Report). Ultimately BP’s safety initiative is designed to equip staff with the skills needed to run safe and efficient operations as well as manage potential crises.OperationsFounded in 1909 as Anglo-Persian Oil Co operating in what is now Iran, British Petroleum has grown into one of the world’s largest oil companies (S&P Capital IQ). Today, BP is a British multi-national oil and gas company headquartered in London, England and the world’s #3 publicly traded integrated oil concern behind Exxon Mobil and Royal Dutch Shell. BP’s gas and oil exploration initiative spans across 30 countries worldwide with reserves of 17 billion barrels of oil equivalents. (Hoover’s) “As of December of 2013, their overall operations spanned across approximately 80 countries (2013 Annual Report).”
The sector and industry in which BP operates in is classified as the Basic Materials sector of the Major Integrated Oil & Gas industry (Yahoo Finance). In addition, BP employees approximately 83,900 people worldwide. BP has also taken the title of largest oil and gas producer in the US and a top refiner, with 15 plants processing more than 2 million barrels of crude oil per day. The company operates about 20,000 BP Connect gas stations worldwide (2013 Annual Report).
BP is also a major producer of petrochemicals and retails Castrol branded lubricants in more than 50 countries across the world. Furthermore, the oil sector accounts for about 13.3 percent of FTSE 100 in the UK and BP is one of the largest players in this sector. As such, BP is one of the barometer companies of the British economy.
BP’s successes and failures are likely to be mirrored in the UK economy as a whole. (Corporate Watch) BP also has a large stake in the solar energy industry after purchasing from Enron, Solarex, in April of 1999. Today, BP Solar’s website boasts that it not only is the world’s largest solar electric company but also that it has over 44 years of collective experience. As one of the leading energy producers in the world BP competes against companies such as Shell, Exxon-Mobil, and Chevron. Today BP’s market cap is valued at 152.04 billion falling short to Shell at 237.90 billion and Exxon Mobil at 436.14 billion (Yahoo Finance).
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BP Annual Report 2013: