Good Example Of BP Oil And Gas Company Essay

Type of paper: Essay

Topic: Oil, Energy, Company, Business, Gas, World, Internet, Products

Pages: 3

Words: 825

Published: 2020/09/27


Company Profile
British Petroleum is one of the biggest oil and gas companies in the World, being the global #3 publicly traded integrated oil company (Hoovers, 2014) and ranked the 4th among the major oil and gas companies by Forbes magazine (Murphy, 2014.) Founded in 1909, this global integrated oil and gas giant with headquarters in London, United Kingdom, provides its clients “with fuel for transportation, energy for heat and light, lubricants to keep engines moving and petrochemical products used to make everyday items” such as packaging, clothes and paints (BP p.l.c.) BP’s business is organized in two segments. The Upstream segment focuses on oil and natural gas exploration and production, while the Downstream segment is more product and service-oriented with specific focus on petrochemicals, lubricants and fuels.
The company is very specific in defining their place in the business world – they “deliver energy to the World” focusing on safety and excellence (BP p.l.c.) BP’s mission is to build a “long-term value for shareholders by helping to meet growing demand for energy in a safe and responsible way. We strive to be a world-class operator, a responsible corporate citizen and a good employer” (BP 2014 p. 2.) The mission of the company is well-structured and reflects the company’s goals (to create value for the owners, to be a world-class market player) and some of the corporate values such as sustainability, market orientation, safety and responsibility, environment protection and being a good place to work at for every employee. The other values the company shares are excellence, respect, courage and team collaboration.
The mission statement is mainly product-oriented and contains all the key necessary elements of successful mission such as self-concern, customers, markets, technology, products, concern for survival, philosophy, public image, employees (Jurevicius, 2013.)

The Business Model

BP operates the full cycle of oil and gas development and production. The value chain of the company includes finding the new oil and gas fields, development and extraction, transporting, supplying to international markets, manufacturing fuel and various products (petrochemicals, lubricants, etc.) Also the company invests in research and development activities supporting renewable energy projects and solutions.

Market Outlook and Primary Competitors

BP operations cover 80 countries of the World, operating at capacious global fuel, energy and petroleum products market. The Company operates in two business segments: Upstream (Exploration and Production), and Downstream - Refining and Marketing(Reuters, 2015.)
According to BP Energy Outlook 2035, the total energy consumption in the World will increase by 41% by 2035 to almost 18 million toe (BP, 2014, p. 8.) The growth is driven both by population growth and also by economic development, but energy consumption growth in slower in comparison with projected GDP growth (BP, 2014, p. 17.) The key trends in the energy sectors are the following: slowly changing fuel mix with growing share of gas (among fossil fuels) and renewables (among non-fossil); increasing role of power sector, rising role of North America as an energy exporter, etc.
British Petroleum key competitors are other global oil and gas giants such as Exxon Mobil, Royal Dutch Shell, Chevron Corporation (Hoovers, 2014) and also such companies as PetroChina, Gazprom, Total SA, Septic Tank Bio, Petrobras, etc.
Presence in the U.S.
For British Petroleum, the U.S. is the central and the key market to focus on. About 40 percent of BP shares are held in the USA, according to BP’s US Economic Impact Report 2014 (BP, 2014, p. 2.). In the U.S. the company reports to have over 18 thousands employees, 220 thousand total jobs supported. They are proud of their positive impact on the U.S. economy with over $22 billion dollars paid to the U.S. vendors.

Key Products

BP’s product line for businesses includes gas & petrol, crude oils, coke, liquefied natural gas, natural gas liquids, motor oil and lubricants, acetyls, asphalt and bitumen, biofuels, marine fuels, petrochemicals for production of various goods (clothes, cosmetics, medications, food containers, paints, etc.) The services include transportation (shipping, aviation), gas trading, franchising, providing gas and fuel cards for businesses and consumers (BP p.l.c.) The products for end-users include gas and petrol, biofuel, motor oils and lubricants. The company operates such brands as Aral, Castrol, AMPM, Wild Bean Café, etc.

Customers: groups

BP works with both business customers and individual consumers. The customer segmentation in a company is based on geography (territory, population density and climate); demography (income, age, occupation) and behavior (environment consciousness, luxury of travel).

Success to Date

BP is one of the top-3 leading public companies in the global energy market. 80 countries of presence, about 84 thousand of employees, economic value generated - $403.3 billion in 2013, operating cash flow - £21.1 billion, 3.2 million of oil produced a day, new exploration access - 43,000 km2, about 18 thousand of retail sites, almost 14 million tonnes petrochemicals produced in 2013 (BP p.l.c.) P/E Ratio 12 (industry average 21, Reuters, 2015.)


In their strategy, BP focuses on value rather than on volume. The strategic priorities of the company for the future growth are the following: safe, reliable operations, competitive project execution and reasonable financial decisions (BP p.l.c.). The company maintains quality assets portfolio with the focus on high-value upstream assets and pursue its further growth basing on its distinctive competences like advanced technology and innovation, proven expertise and strong business relationships. To evaluate the performance towards strategic goals, BP operates the system of selected key performance indicators in all the BSC dimensions such as operating cash flow, shareholder return, recordable injury frequency, greenhouse gas emissions, major project delivery, production, group priorities engagement, etc. These KPIs are in line with the strategic goals and give management and shareholders detailed picture about the progress towards the strategy.


BP supports the trend of development renewable energy sources. Within the last decade, British Petroleum “has invested $4.5 billion in US alternative energy” including biofuels, Vivergo fuels, wind power and sustainable technologies (advanced robotics, seismic imaging, advanced materials etc.) (BP p.l.c.) Examples of the projects: LoSaL® Enhanced Oil Recovery technology, SaaBre™ technology, Castrol EDGE with TITANIUM Fluid Strength Technology™, etc. Through its vehicle BP Ventures BP is investing in disruptive technologies. In 2013, amount of BP investments in research and development amounted to $707 million.

Hot Current Issues

The sensitive issue for BP business is safety and environment protections, responding to oil spill disasters and dealing with consequences. A bright example is Deepwater Horizon accident of 2010 that took lives of 11 people. After the incident, BP has to sell $43 billion in assets (Dlouhy, 2014.) Next, BP’s business is sensitive to natural disasters. The other current challenge for BP’s business is current fluctuations of oil prices. As oil prices go down, it affects BP stock prices in a negative ways.

Works cited

Murphy, A., 2014. Global 2000: The Biggest Oil & Gas Companies of 2014. Web. Accessed 16 January, 2015. Retrieved from
BP p.l.c. British Petroleum Global. BP. Web. Accessed 16 January, 2015.
BP, 2014. Annual Report and Form 20-F 2013. Web. Accessed 16 January, 2015.
BP, 2014. BP Energy Outlook 2035. Web. Accessed 16 January, 2015. Retrieved from
Jurevicius, O., 2013. Mission Statement for Success. Web. Accessed 16 January 2015. Retrieved from
BP, 2014. BP’s US Economic Impact Report 2014. Web. Accessed 16 January, 2015. Retrieved from
BP, 2014. BP Energy Outlook 2035. Web. Accessed 16 January, 2015. Retrieved from
Hoovers, 2014. BP P.L.C. Competition. Web. Accessed 16 January, 2015. Retrieved from
Reuters, 2015. BP PLC (BP). Web. Accessed 16 January, 2015. Retrieved from
Dlouhy, J., 2014. BP's leader in U.S. says oil giant is where it needs to be. Web. Accessed 16 January, 2015. Retrieved from

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