BRITISH PETROLEUM

British Petroleum

British Petroleum

Background

BP (formerly British Petroleum and BP Amoco) is a petroleum company headquartered in London.  In December 1998, BP merged with American Oil Company (Amoco) as a result of which, "BP Amoco" was created. After one year, the name was changed to "BP".

BP's largest reserves are in the United States, accounting for almost six billion barrels, and in Russia, where the figure is nearly four billion up to date. Much of the crude oil processed in its refineries account for 2.7 million barrels per day. Worldwide, the company has more than 22,000 fuel outlets and 80,000 employees. On December 31, 2010, Bp's market value was estimated to be $136 billion.

History

In May of 1901, William Knox D'Arcy was given permission to explore for oil in Persia. He struck oil in 1908, and in 1909, Anglo-Persian Oil Company (as BP was first known) was founded. This was the first discovery of oil in this region. In 1914 the company received £2 million from the British government in return for a major shareholding and the right to appoint two directors on the Board. In the mid1920's, exploration was expanded to Canada, South America, Africa, Papua, and Europe. In 1954 company was renamed British Petroleum (BP) Company. BP continued to grow as it made many acquisitions of other oil companies. BP gained a foothold in the American market when the company made a large oil discovery in Alaska. (Bamberg 2000, 221)

In the 1973, BP lost access to most of its supply of OPEC oil, and the OPEC countries took control of oil and prices. As oil prices were pushed upwards, demand for oil fell, and BP's sales decreased significantly. The company was only able to survive these oil crises because they had large investment programs in areas outside the Middle East. At this time, RP began to diversify into new areas of activity. They entered the nutrition, mineral, coal, and information technology businesses. Due to the entering of all of these new markets, BP underwent major restructuring in 1981.

1987 was a monumental year for BP. They bought the remaining shares of Standard oil, and formed a new company called BP America, giving them a major foothold in the U.S. market. The British government sold the remaining shares of their stock, diversifying the ownership of BP and reducing governmental control. BP acquired Britoil, which doubled BP's exploration acreage. (Jones 2004, 146)

 BP began having trouble managing their diversified business, so the company sold their non-core businesses and focus on hydrocarbon-based activities. In 1998, BP acquired Amoco and formerly became BP Amoco. In 2002, the company returned to marketing itself as BP and adopted the tag line 'Beyond Petroleum”. The company did this for two reasons; to step away from the connotations of "British Petroleum”, so that they may be seen as a global business rather than a British company, and to show the company's new focus on environmental friendly fuels and alternative energy. Currently, BP is the 1eading producer of solar panels and has a twenty percent market share in this ...