BRITISH PETROLEUM

PRAMIT PRATIM GHOSH 17 KRISHNAKUMAR J 25 ABINASH NAYAK 34

HISTORY
1901 - 1908 : First Oil (An Uncertain Beginning) :

English entrepreneur William D Arcy gets exclusive rights to search for oil in south west Persia in 1901.
On the early morning of 26 May 1908, oil was explored as the drill reached 1,180 feet. Within a year, the Anglo-Persian Oil Company, which would one day become BP, was in business.

 1909 - 1924 : Early History (From Struggle to Success) :

The Field of Naphtha was 210 rugged kilometres from the mouth of the Persian Gulf, where Anglo-Persian was building a refinery complex. The work was slow and painstaking. It took two years. By 1914 the Anglo-Persian project was nearly bankrupt for the second time in its short history. The company had plenty of oil but no one to sell it to. Cars were still too expensive, and more established companies in Europe and the New World had the market in industrial oils cornered.
Churchill thought Britain needed a dedicated oil supply, and he argued the case in Parliament. The resolution passed resoundingly, and the UK government became a major shareholder in the company.

Despite its name, the British Petroleum brand was originally created by a German firm as a way of marketing its products in Britain. During the war, the British government seized the companys assets, and the Public Trustee sold them to Anglo-Persian in 1917. With that, Anglo-Persian had an instant distribution network in the UK, including 520 depots, 535 railway tank wagons, 1,102 road vehicles, four barges and 650 horses. Royal Navy complained that the oil from Anglo-Persian was causing engine problems in colder climates. Anglo-Persian bought an 18th-century mansion at Sunbury-on-Thames, near London, and set up a research laboratory in the basement to address such scientific challenges.

 1925 - 1945 : Through WWII (Progress through turmoil)

BP-labelled gasoline pumps appeared around Britain in the 1920s and 30s. There were 69 pumps in 1921, over 6,000 by 1925.
Persia changed its name to Iran in 1935, and to stay modern the company followed suit. But the good times wouldnt last much longer. Everything changed in the autumn of 1939, when Britain entered World War II. Suddenly gasoline was a rationed commodity, and BP, Shell and the other brands on sale in the UK were consolidated together into a generic fuel labelled Pool. BPs growth on the continent abruptly stopped.

During the war, 44 of the companys tankers were sunk, killing 657 crew, with 260 others taken prisoner of war. Anguished by the risks of transporting oil to Britain from Iran, the British government asked Anglo-Iranian to find more oil on British soil than the trickle it had previously discovered. The company obliged, upping production at a field in Nottingham, England.

 1946 - 1970 : Post War (Big Changes, New Prospects) :

After war Anglo-Iranian invested in refineries in France, Germany and Italy plus started new marketing efforts in Switzerland, Greece, Scandinavia and the Netherlands. BP gasoline went on sale for the first time in New Zealand.
In 1951 the Iranian Parliament nationalized oil operations within the countrys borders. Governments around the world boycotted Iranian oil. Within 18 months, the Iranian economy was in ruins. A new arrangement allowed a consortium of companies to run the oil operations in Iran. Anglo-Iranians stake was 40%. In 1954, the board changed the companys name to The British Petroleum Company. In 1968, after a decade of drilling dry wells along the North Slope, Alaska, BP tapped into its share of the largest oil reservoirs ever found on the North American continent.

 1971 - 1999 : Late Century (Finding a new momentum):

In 1971, Ghaddafi nationalized BPs share of an oil production operation in Libya. Iran, Iraq, Saudi Arabia, Abu Dhabi, Qatar announced that if they werent nationalizing their resources immediately they would within the next 10 years. When the oil started to flow from Alaska, no BP refineries or stations in the United States were there to take it. Instead a 25% stake in Standard Oil of Ohio (Sohio) ensured that Sohio facilities were standing by to bring the first Alaskan gasoline to market. BPs stake in Sohio grew over the years, and in 1987 BP bought the company outright.

That same year the British government sold the last of the shares it held in BP. Fully privatized and in a period of intense self-scrutiny, BP accelerated its sell-off of businesses minerals, nutrition that werent core to what the company had always done well: find, refine, transport and sell fuel. In the late 1990s, with stiff competition in the energy industry setting off a string of prominent mergers, BP and Amoco joined to form BP Amoco. Then ARCO, BPs old rival on the North Slope of Alaska, joined the portfolio. Later, Castrols motor oils and Arals distinctive European operation would also join the group.

 2000 & Beyond : New Millennium (Looking Ahead)

With major, long-term projects in Russia, the Gulf of Mexico, North America, Azerbaijan, Indonesia and elsewhere, BP had a lot of oil and gas in the proverbial pipeline.
In 2005, in the petrochemicals sector, BP announced the consolidation of the olefins and derivatives businesses into a stand-alone entity called Innovene. BP had previously announced that it was to sell Innovene to INEOS on 7 October 2005. The sale was completed on 16 December 2005.

BP created a unit, BP Alternative Energy, devoted to making from all the various types of low-carbon energy solar, wind, natural gas, biofuels a viable, large-scale and profitable business.

BUSINESS PORTFOLIO
Upstream:

In September 2010, BP restructured the Exploration and Production (E&P) Segment. The new "Upstream" organisation aims to deepen functional expertise, standardize the way to do business and, in doing so, leverage their strengths globally. Upstream activities include oil and natural gas exploration, field development and production.
BP has exploration and production interests in 25 countries. Its main areas of activity include the US, UK, Russia, Norway, Canada, South America, Africa, the Middle East and Asia.

 Refining and Marketing:

Refining and Marketing covers four main activities: supply and trading, refining, marketing and transportation of crude oil and petroleum products to wholesale and retail customers. BP markets its products in over 100 countries, operating primarily in Europe and North America, but also in Australasia, parts of Southeast Asia, Africa and Central and South America. BP's reconfigured petrochemical businesses are currently made up of:
Acetyls - BP is a supplier of acetyls products with its main products being acetic acid and acetic anhydride. Aromatics - Its aromatics business link BP's oil and chemicals operations, managing the supply, marketing and sales of its portfolio of aromatics products. These include mixed xylenes, benzene, toluene, paraxylene and other aromatics streams. PTA/ Polyester intermediates - BP is a producer of purified terephthalic acid (PTA). It produces PTA from plants in the US, Belgium, Brazil, Korea, Indonesia, China, Malaysia and Taiwan.

 Alternative Energy business:

The portfolio of BP Alternative Energy covers a wide range of renewable and alternative energy technologies from large-scale commercial businesses in solar and wind power to exciting new areas, such as carbon capture and advanced biofuels.
BP Alternative Energy already has substantial businesses in solar photovoltaic, wind and gas-fired power and is developing projects in advanced biofuels and carbon capture and storage as well as new areas such as concentrated solar thermal power.

BP Biofuels is blending and distributing bio-components, such as ethanol and biodiesel, and investing in research to explore advanced biofuels that will emit less carbon and use non-food crops.

COUNTRY PORTFOLIO
Africa:

BP has exploration and production activity in Africa is focused on Algeria, Angola and Egypt. Elsewhere in Africa, their main activities are in refining and marketing, with a significant retail presence in Southern Africa.

Asia:

BPs exploration and production activities are centred in China, Indonesia, Vietnam and Pakistan, while they have significant chemicals manufacturing in China, South Korea and Malaysia.
BP also holds a leadership position in Liquefied Natural Gas (LNG) in China, while Kuwait and United Arab Emirates are typically joint venture activities. BP Solar has a manufacturing plant in India. BP markets lubricants and oil products throughout the region, with major retail operations in India and China.

 Australasia:

BPs exploration and production activities in Australia and New Zealand are centred in Australia, where BP Solar is also a major marketer of solar panels. Sales and marketing of lubricants and oil products takes place throughout the region, with major retail operations in both Australia and New Zealand. BPs corporate headquarters are located in London , and the UK is therefore a centre for trading, legal, finance and other mainstream business functions. The UK is also home to three of BPs major global research and technology groups. BPs exploration and production business in Europe covers the North Sea both the UK and Norway. In Russia BP has an important joint venture through 50% ownership of TNK-BP, a major oil company with the majority of its assets in Russia. BP is involved in a number of exploration and production projects in Azerbaijan.

Europe:

 North America:

BP group is the largest oil and gas producer and one of the largest gasoline retailers in the United States. In Canada, BPs activities focus on the production of natural gas and derivatives and are currently considering a North American natural gas pipeline project in a joint venture.

Exploration and production work is a core aspect of BPs presence in Trinidad and Tobago.
Exploration and production work is a core aspect of BPs presence in Colombia and Venezuela. In Brazil, BPs lubricants business has been operating for over 50 years, and aviation fuels have been sold to main airlines for 9 years now. BP Biofuels is the latest business to arrive in Brazil, as a joint venture, through which BP has been producing ethanol since 2008.

South America:

GLOBAL MARKET POSITION

Upstream: In response to the Gulf of Mexico accident and oil spill, BP have re-organized upstream business into three separate divisions: Exploration, Developments and Production. This structure is designed to help them focus on how they manage risk, deliver common standards and processes, and build technical capability for the future. In 2010 BP disposed of almost $22 billion of upstream assets located in the US, Canada, Egypt, Colombia, Venezuela, Argentina, Vietnam and Pakistan. This disposal programme has been an opportunity to further upgrade and focus portfolio. They are increasing investment in exploration; and buying, developing and selling upstream assets with a focus on maximizing returns rather than building volume.

BP seek to renew resource base by discovering and accessing new fields, and by increasing resources from fields they currently operate.
In 2010 BP deepened positions in the North Sea, US shale gas, the Gulf of Mexico, Canada heavy oil, Azerbaijan and Indonesia. In addition, BP accessed major new basins, including Brazil, the South China Sea and Australias Ceduna basin. BP also entered into a strategic alliance to explore and develop areas of the South Kara Sea in the Russian Arctic. The Hodoa gas discovery in Egypts deepwater West Nile Delta was a significant exploration discovery in 2010. BP apply enhanced oil recovery (EOR) technologies to increase the amount of oil recovered from wells.

Competitors: Exxon Mobil, Royal Dutch Shell and TOTAL.

 Refining and Marketing:

Focus on quality and integration: This is expected to enhance BPs six integrated fuels value chains (FVCs) around the world to maximize efficiency and profitability. In pursuit of this in the US, Texas City refinery and southern part of West Coast FVC have been divested. Within FVCs in southern Africa, following a strategic review, BP narrowed focus within the continent to South Africa and Mozambique as these countries offer the greatest synergies with supply chain and portfolio of assets in the region. Developing Lubricants Technology: Castrol opened a new lubricants technology development centre in China in 2010. Employing scientists and engineers from China and abroad, BPs team is collaborating with vehicle manufacturers and other partners to develop leading-edge technology. During the year Castrol also sponsored the 2010 FIFA World Cup in South Africa. This has increased brand awareness for Castrol master brand and product brands.

 Alternative Energy business:

BPs alternative energy business is focused on biofuels, wind and solar, along with demonstration projects and technology development in carbon capture and storage as they believe these have the potential to be a material source of low-carbon energy, and they are aligned with BPs core capabilities. End-to-end Biofuel Capabilities: BPhave continued to invest throughout the biofuels value chain, from sustainable feedstocks that minimize pressure on food supplies to the development of the advantaged fuel molecule biobutanol. In 2010 BP acquired Vereniums lignocellulosic biofuels business, including Vercipia Biofuels, providing BP with integrated, end-to-end capability in biofuels. BP have developed and demonstrated several key innovative solar technologies, including increasing the energy output, lowering the cost, and improving installation and maintenance of solar modules. Competitors: GE Energy, Q-Cells, Siemens, SunOpta and Vestas.

FINANCIAL ANALYSIS
BP, the former British Petroleum, is the Integrated Oil and Gas company

with the third-most sales and the fourth largest market capitalization in the world.
The company became a behemoth, in part, by acquiring Amoco and

Arco. These transactions made BP a significant operator of Alaskan oil fields and pipelines. The growth-through-aquisition strategy continues on a smaller scale. In two separate transactions totalling $3.65 billion, BP paid Chesapeake Energy for a stake in Arkansas's Fayetteville Shale field and an interest in Oklahoma's gas-producing shale properties.
The last few years have been, to say the least, trying ones for BP. The

company has faced tragedies, maintenance problems, market manipulation allegations, and an ignominious leadership change. Reduced production and lower refining margins haven't helped.

 BP operated the Deepwater Horizon drilling rig that failed

with tragic results in April 2010 in the Macondo area of the Gulf of Mexico. To cover the disaster's costs, including a $20 billion compensation claims fund, BP recorded pre-tax charges totalling $40.858 billion ($28 billion after taxes, $12.89 per share) in 2010. These charges caused BP to end 2010 with a loss of $3.7 billion on revenue of $309 billion. In 2009, BP achieved profits of $16.6 billion on sales and other operating revenues of $239 billion.
The share price plunged as a result of the Gulf oil spill, causing the

company's market value to fall from $190 billion in April to $90 billion in June 2010. The market value has since recovered to about $150 billion. BP indicated it would sell as much as $40 billion of assets to raise cash.
BP's Revenue increased to $297 billion in 2010, up from $239 billion in

2009. Higher energy prices outweighed the production lost in the Gulf of Mexico.

 Revenue (i.e., Sales and Other Operating Revenues) of $70.6 billion was

6.6 percent more than $66.2 billion in the third quarter of 2009. The company's Revenue is dependent, for the most part, on how much oil and natural gas it produces and refines and the prices at which various energy products are bought and sold. The latest Revenue amount, which was lower than in the second quarter, fell short of our $75.0 billion estimate by 5.9 percent. The Exploration and Production unit achieved sales of $15.2 billion, up from $14.9 billion in the September 2009 quarter. If sales to other BP units are excluded, Exploration and Production's sales rose from $5.3 billion to $6.5 billion. Refining and Marketing sales rose from $60.3 billion to $63.6 billion, excluding internal sales. BP's average Global Indicator Refining Margin improved from $3.42 to $4.53 per barrel, a 32-percent jump. Refining availability improved from 94.3 percent to 95.0 percent.