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BP

BP

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Published by jadesso1981
A complete business analysis of BP.
A complete business analysis of BP.

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Categories:Types, Research
Published by: jadesso1981 on Apr 30, 2013
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1
 The Business Case
i
 
BP has an aspiring story. They almost never existed. After 7 years of drilling and tapped outresources, George Reynolds, an explorer employed
 by William D‘Arcy, found oil. In 1908, a
year later, the Anglo-Persian Oil Company was in
 business and Mr. D‘Arcy was exceedinglywealthy. The company that almost wasn‘t, now BP, still holds its headquarters in London and
has six subsidiaries (Castrol, Wild Bean Café, ARCO, ampm, and ARAL). BP offers a range of  products consisting of natural gas, oil, wind, solar, and biofuels. The company is present on fivecontinents in over 100 countries and has franchises worldwide.BP is a publicly traded company and their operations are overseen by a Board of 15 members,including Robert Dudley, CEO. A lot can be said for this team, who is doing more than just
keeping BP afloat during the company‘s own financial crisis. As of November 2, 2010, BP
reported a $1.785 million profit after losing just over $17 million due to the Gulf oil spill monthsearlier. Despite the financial drain from the oil spill, BP is only about $3 million short of whereit was in Novemb
er of 2009. The company‘s stock 
, while having plummeted in the summer of 2010 to a mere $26.75 per share, are now at a healthier $40.06 per share. Despite the challengingeconomic conditions and the oil spill fiasco, BP is still managing to stay financially stable andrestore investor confidence.In this paper, BP will be analyzed on how it measures up to its competition in the energyindustry. Its subsidiaries will be briefly mentioned in the Internal Analysis and franchises willonly be mentioned where or if they impact corporate numbers. For the External Analysis, thisreport will solely examine the petroleum business as a source of energy and not on its presencein everyday products such as plastic, tires, asphalt, Vaseline, and nylons, to name a few. Thesole focus of this paper will be on BP Global, the oil company and its other forms of energy.
Mission
BP‘s mission statement is actually
that which their acronym (unofficially)
stands for, ―BeyondPetroleum.‖
ii
 
Vision
BP has been in the business of providing energy for over 100 years. Their goal is to continue to provide energy but in a new, healthier, eco-friendly way. They want to create a diverse energy
mix that is ―secure, stable, and lower in carbon.‖
iii
 
Problem Statement
How can BP return to profitability, restore consumer confidence, and find a way to stand outamongst competitors while struggling with the economic crisis and the Gulf oil spill?
Essential Timeline
iv
 
1908
 – 
E
mployed by William D‘Arcy
, George Reynolds struck oil.1909
 – 
Anglo-Persian Oil Company is born.1912
 – 
BP opens its first service station in Minneapolis, Minnesota.
 
 
21914
 – 
Anglo-Persian almost goes broke (again).1917
 – 
British Petroleum, a German company, had their assets seized b
y London who‘s Public
Trustees sold them to Anglo-Persian. These assets consisted of 520 stations, 535 railwaycontainer carts, 1102 automotive vehicles, 4 barges, and 650 stallions.1921
 – 
Had 69 gas pumps in operation.1925
 – 
Over 6,000 gas pumps.1935- Company changed its name from Anglo-Persian to Anglo-Iranian.1941-
Iran‘s prime minister closed oil operations to foreign countries.
 1942- Oil operations in Iran are re-opened but with new arrangements, under which Anglo-Iranian was given a 40% stake.1954- Anglo-Iranian changed its name again, this time to The British Petroleum Company.1965- BP discovered natural gas within the English Channel.1965
 – 
BP opened the first self-service station in Essex in the UK.1969- Struck oil in Alaska, the largest reservoir in North America.1970
 – 
 
Discovered ―black gold‖
in the North Sea, enough to manufacture 400,000 barrels per day.1975
 – 
Queen Elizabeth II starts the flow of oil in the pipelines from Forties Field.1975
 – 
BP was transporting 140 million tonnes from the Middle East, from which it alsoreceived 80% of its supply.1977
 – 
Alaskan pipelines are opened.1983
 – 
BP transported 500,000 tonnes from the Middle East and only received 10% of its supplyhere as a result of the Middle Eastern nations taking over the oil on their land.1987
 – 
BP buys Sohio and turns it into BP America.1987
 – 
The British government sells it shares of BP and the company turns into a fully privatized business.1998
 – 
BP merges with Amoco, forming BP Amoco.2000 - ARCO, Aral, and Castrol are all bought by BP.
 
 
32000- BP changes its company logo at all of its 28,000 sites to the Helios to represent its new,global brand.2001
 – 
BP opens the greenest gas station in the world in Essex, England.2004
 – 
Builds the highest capacity deep water pipeline system in the Gulf of Mexico.2005
 – 
BP Alternative Energy is formed to create low carbon power.2006
 – 
BP Biofuels is born.2010
 – 
Gulf of Mexico oil spill and recovery efforts.
External Assessment
 
Global and Economic
The petroleum
industry provides some of the world‘s most necessary services, ranging from
refined automotive fuel to raw chemical products
, and it‘
s the wo
rld‘s leading industry in regards
to money. As of November 2010, a barrel of oil is selling for $85.27
v
and at 30 billion barrels being consumed in a year 
vi
, that‘s over $2.558 trillion! This includes a 4.1% growth in the world
economy and further growth of 3.6% is forecasted for 2011.
vii
 Oil is the most vital product in this industry.
It is the world‘s primary source of 
energyconsumption, 32% for Europe and Asia combined and 53% for the Middle Eastern countries.Additionally, Southern and Central America account for 44% of usage, Africa for 41%, and North America for 40%.
viii
According to the quarterly report by OPEC, the worldwide demand
for oil is up, as consumption has exceeded this year‘s expectations
by.2%. As a result, the 2011forecast has been revised from 1.9% to 2.0%.
ix
 
Despite these changes, it‘s unlikely
the supplywill be able to meet the demand. This year, the supply fell short by 28.8mb/day and the demandfor 2011 is anticipated to increase, so the supply will come up short again (see Appendix A)
x
.
APPENDIX A
xi
 
Supply and demand
in million barrels per day
 
2010 2011
World demand 85.8 World demand 86.9 Non-OPEC supply 52.2 Non-OPEC supply 52.5OPEC NGLs 4.8 OPEC NGLs 5.2
Difference 28.8 Difference 29.2
 The petroleum business is a very important economic sector, not only for its many uses, but also because it stimulates growth. One of the most important ways it does this is through trade. Tradeis crucial to the economy worldwide, as it promotes cash flow, jobs, and provides resources that

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