BP

This article is about the corporation known as BP. See also BP (disambiguation)

BP (formerly "British Petroleum" and briefly known as "BP Amoco") LSE: BP, NYSE: BP is a petroleum company headquartered in London, and one of the top four oil companies in the world (along with Shell, ExxonMobil, and Total).

In December 1998, BP merged with the American Oil Company (Amoco), forming "BP Amoco". However, this move was widely viewed as a purchase of Amoco by BP, only officially described as a merger for legal reasons. Indeed, after a single year of joint operations, the two giants merged most operations and "Amoco" was dropped from the name. The newly-renamed "BP" became an initialism no longer standing for "British Petroleum", and used the tagline "Beyond Petroleum" in advertising campaigns (this perhaps to disguise the company's foreign ownership after its extensive acquisitions and increased presence in the United States, as British Aerospace became "BAE Systems" for similar reasons). Its BP Solar division has become a world-leading producer of solar panels.

BP is the leading partner in the controversial Baku-Tbilisi-Ceyhan pipeline.

History

1909 - 1955

In May 1901, William Knox D'Arcy was granted a concession by the Shah of Persia to search for oil, which he found in May 1908. This was the first commercially significant find in the Middle East. In 1909, the Anglo-Persian Oil Company was created 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. but 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 governments of Britain and the US were concerned about the encroachment of Soviet influence in the area and assisted in a plot against the Iranian administration. They installed pro-Western General Fazlollah Zahedi as prime minister of Iran.

On August 19, 1953, the incumbent 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 an new international consortium. BP continued to operate in Iran until the Islamic Revolution. However, due to a large investment programme outside Iran, the company survived the loss of its Iranian interests at that time.

1960s and 1970s

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

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. John Browne, Lord Browne of Madingley, who had been on the board as managing director since 1991, was appointed group chief executive in 1995.

Present

British Petroleum merged with Amoco (Formerly Standard Oil of Indiana), in December 1998, becoming BPAmoco until 2002, when it was renamed BP, with no meaning given to the letters. Most Amoco gas stations in the United States are in the process of changing the look and name to BP. However in some states, BP is selling Amoco-branded gasoline (while the name of the station itself is BP). In 2000, British Petroleum also acquired Arco (Atlantic Richfield Co.) and Burmah Castrol plc.

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 by leaving octane for petrol unit unsupervised. The pressure in the units then reached unsustainable levels leading to 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.

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.

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, 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." [2]

In March 2002 BP's chief executive, Lord Browne, 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.".[3] 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).[4]

In 2004, BP began marketing low-sulphur diesel fuel for industrial use. BP is committed to creating a network of hydrogen fuelling station 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.