BP

Overview

Market share/importance

The oil sector accounts for about 13.3 per cent of FTSE 100 ^[1] in the UK BP is one of the largest players in this sector. As such, BP is one of the barometer companies of the British economy. BP's successes and failures are likely to be mirrored in the UK economy as a whole.

BP's crude oil production in 2000 stood at 1,928 thousand barrels per-day,^[2]

Gas production at 7,609 million cubic-feet per-day,^[3]

Total production at 3,240 thousand barrels of oil-equivalent per-day,^[4]

Gas sales at 14,471 million cubic-feet per-day,^[5]

Refinery throughputs at 2,916 thousand barrels per-day,^[6]

Marketing sales at 3,756 thousand barrels per-day,^[7]

Chemicals Production at 22,065 thousand tonnes.^[8]

BP Solar is the world's largest solar electric company ^[9]

For comparison

Shell's Crude oil production in 2000 stood at 2,274 thousand barrels per-day ^[10]

Shell's Natural gas production available for sale at 8,212 million standard-cubic-feet per-day ^[11]

Shell's oil product sales at 5,574 thousand barrels per-day ^[12]

Exxon-Mobil's liquids production in 2000 stood at 2,600 thousand barrels per-day ^[13]

Exxon-Mobil's natural gas production available for sale at 10,300 million cubic-feet per-day ^[14]

Exxon-Mobil's refinery throughputs at 5,600 thousand barrels per-day ^[15]

Exxon-Mobil's petroleum product sales at 8,000 thousand barrels per-day ^[16]

For a guide to the units used by the oil and gas industry try: http://www.nepo.go.th/ref/UNIT-OIL.html

BP ranks in the top three in terms of reserves in the global oil and gas industry with operations in Europe, the Americas, Asia, Australasia and Africa ^[17]. More than 70% of profits are generated in Europe and the United States but the company is also pressing ahead with new exploration and production operations in Africa, South America, Asia and the Caspian sea ^[18].

BP is the largest retailer of gasoline in the US. ^[19]Marketing as AMOCO in the eastern United States and ARCO in the west, it has about 17,150 service stations nationwide ^[20].

Throughout the rest of the world the company has a network of 11,850 BP branded service stations ^[21], 1,525 in the UK ^[22]and products on sale in 100 countries ^[23]. In the UK BP also supplies fuel to petrol stations at Safeway supermarkets ^[24].

BP retails its Castrol branded lubricants in more than 50 countries and in addition, supplies Castrol specialist products and services to the metalworking industry ^[25]. Outside North America the group also markets lubricants under the BP brand.

BP is also one of the world's largest marketers of aviation fuel and a major supplier of fuels and lubricants to the shipping industry. BP supplies more than 900 ports and 1,400 airports worldwide ^[26].

History

Before January 1999 the company was registered as the British Petroleum Company PLC. In January 1999 following a merger the company took on the Amoco name ^[27]. They retained the name BP Amoco, until April 2000 ^[28] The transition to the BP PLC name was managed by BPs advertising agency: Ogilvy & Mather and PR Consultants: Ogilvy PR. The change of name culminated in BPs new logo and re-branding, in the first quarter of 2001 ^[29].

BP was founded by William Knox D'Arcy, an Englishman who, shortly after the turn of the century, ventured to Persia (Iran) in search of oil. D'arcy's company was first registered in 1909 under the name Anglo-Persian Oil ^[30] and for the next 60 years the company's focus lay in the Middle East ^[31].

The British government acquired a controlling stake in the company shortly before the first world war as Anglo-Persian promised secure supplies of oil ^[32]. Between the wars Anglo-Persian expanded into Canada, South America, Africa, Papua and Europe and in 1935 the company was renamed the Anglo-Iranian Oil Company ^[33].

In 1951 Iran nationalised the company's assets, at that time the UK's largest investment overseas. To counter this, the company began exploration in other Middle Eastern countries, such as Kuwait, Libya and Iraq and in 1954 the company was renamed British Petroleum Company ^[34]. From the late 1960s operations shifted westwards, towards the USA, (Prudhoe bay, Alaska) and the British North sea. Both of these fields came on stream in the mid 1970s transforming the company and allowing BP to weather the oil price shocks of 1973 and 1979 ^[35]. BP today has operations in over 70 countries ^[36].

The British government sold its last shares in the company in 1987 ^[37]. By that time BP's performance was languishing at the bottom of its sector and a number of investments had backfired. In 1992 the group posted a loss and had to embark on a drastic cost-cutting exercise. A number of key figures at the top of the company are credited with turning the company around, David Simon (Lord Simon of Highbury), Peter Sutherland and following them the current group chief executive John Browne. By 1996 the group had turned around and was performing within the top quartile of the oil and gas sector ^[38].

The company's recent history has been dominated by a number of mergers. BP already held a 55% stake in the US Standard Oil Company and in 1987 successfully acquired the remaining 45% and formed the company BP America ^[39]. 1987 also saw BP acquire Britoil the North Sea exploration company ^[40].

On August 11 1998 BP and Amoco: the American Oil Co. Established in 1910 ^[41], announced that they had agreed the world's largest-ever industrial merger ^[42].

On April 7th 1999 BP announced that it would buy from Enron the 50 per cent stake it did not already own in the solar electric company Solarex, the company would be called BP Solarex ^[43]. BP Solar's website boasts not only that BP Solar is the world's largest solar electric company but also that it has over 44 years of collective experience ^[44]. BP Solarex has manufacturing bases in the USA, Spain, Australia, and India and a total production capacity of 30-40 MW of solar products per-year, representing a 20 per cent share of the global market.

Also in recent years BP has combined its operations with Burmah-Castrol, well known for its Castrol branded lubricants ^[45] and ARCO, whose petrol is on sale across a large part of the United States ^[46].

Products & Projects

BP's downstream products are petroleum products including petrol, diesel, maritime fuels and aviation fuel as well as lubricants for private, business and industrial users, bottled gas for domestic consumers and gas for industrial consumers. BP also supplies petrol and diesel to Safeway supermarkets in the UK ^[47].

BP has operations in 100 countries ^[48] For a full list of the countries where BP operates see: http://www.bp.com/in_your_area/a-z_directory.asp

BP's brands include BP, BP-Solar, Visco lubricants, Castrol Lubricants and in the US AMOCO and ARCO gasoline.

Who, Where, How Much?

Structure/Ownership

BP Group is the top level of the company hierarchy. For organisational purposes Group is divided into 4 divisions: Exploration & production, Oil, Chemicals and Gas & Power (see divisional chief executives above). Figures for production volumes and financial performance are reported separately for each division in BPs quarterly Financial and Operating Information. Most senior figures within BP Group including John Browne himself have made their way up through exploration and production, and despite BPs re-branding as an environmentally aware energy company it is this division which continues to drive the direction of the group.

Top Institutional Holders of BP^[49] Shares Value

State Street Corporation 74,838,292 $3,708,237,369 FMR Corporation(Fidelity Management & Research Corp) 45,746,425 $2,266,735,359 AXA Financial, Inc. 44,415,420 $2,200,784,061 UBS Warburg LLC 16,933,090 $839,034,610 Morgan Stanley Dean Witter & Company 16,617,457 $823,394,994 Barrow, Hanley Mewhinney & Strauss, Inc. 15,631,424 $774,537,059 Bank of America Corporation 15,402,166 $763,177,325 Citigroup Inc. 13,230,389 $655,565,775 First Union Corporation 12,831,490 $635,800,330 State Farm Mutual Automobile Insurance Co 12,228,148 $605,904,733

Top Mutual Fund Holders of BP^[50] Shares Value

Fidelity Contrafund Inc 11,639,166 $576,720,675 Vanguard/Windsor II 11,098,572 $549,934,243 Alliance Premier Growth Fund 8,291,672 $410,852,348 Fidelity Growth And Income Portfolio 7,362,220 $364,798,001 Fidelity Equity-Income Fund 7,162,404 $354,897,118 Massachusetts Investors Trust 6,858,598 $339,843,531 Fidelity Magellan Fund Inc 6,368,842 $315,576,121 Variable Insurance Products... Fd-Equity-Income Portfolio 5,970,742 $295,850,266 Putnam Fund For Growth And Income 5,825,526 $288,654,813 Price (T.Rowe) Equity Income Fund 5,071,026 $251,269,338

BP's Board of Directors

Peter Sutherland Co-Chairman of the Board Age: 53
John G. Buchanan Chief Financial Officer, Age: 56

John Buchanan, chief financial officer, was appointed an executive director of BP in 1996. He is a non-executive director of Boots, the UK cosmetics and pharmaceuticals retailer and a member of the UK Accounting Standards Board ^[51].

Block, Ruth S. Director Age: 69

One of only 2 women at the top of the company Ruth Block joined Amoco's board in 1986 ^[52]. She retired as executive vice president and chief insurance officer of The Equitable (The UK insurer) in 1987 ^[53]. She is a non-executive director of Ecolab ^[54] who serve clients within the fields of Agribusiness, Building Servives, Dairy Processing, healthcare, pharmaceuticals, Pest Elimination and vehicle services ^[55]. She is also a director of Alliance Capital Mutual Funds (http://www.alliancecapital.com)

Bryan, John H., Position: Director Age: 63

John Bryan joined Amoco's board in 1982, he is also chairman and chief executive officer of Sara Lee Corporation ^[56] who manufacture and market foods, underwear and household products worldwide ^[57]. He is also a non-executive director of Bank One Corporation (http://www.bankone.com), General Motors Corporation and Goldman Sachs ^[58].

Davis, Jr. Erroll B. Director Age: 55

Erroll B. Davis, Jr. joined Amoco's board in 1991. He is president and chief executive officer of Alliant Energy ^[59], which is an energy provider to consumers in the American mid-west ^[60]. He is a non-executive director of PPG Industries ^[61] which provides materials for manufacturing, construction, automotive industry and chemical processing ^[62]. In addition he is a member of the American Society of Corporate Executives and the Association of Edison Illuminating Companies ^[63], the association for US and international (shareholder-owned) electric companies ^[64]. He is also a member of the Wisconsin Association of Manufacturers and Commerce, the Iowa Business Council and the Edison Electric Institute: ^[65] 'The association of US shareholder-owned electric utilities and international affiliates' ^[66]. He is a member of the Nuclear Energy Institute, ^[67] whose purpose is to foster and encourage the continued safe utilization and development of nuclear energy in the US ^[68]. He is also a trustee of Carnegie Mellon University ^[69].

Ferris, Richard J. Director Age: 63

Richard Ferris joined Amoco's board in 1981. He retired as co-chairman of Doubletree Corporation ^[70] which manages resorts and business hotels ^[71], in 1997. He is a non-executive director of The Proctor & Gamble Company ^[72] (Pharmaceuticals & Cosmetics).

Knight, Charles F. Director Age: 64

Charles Knight joined BP's board in 1987. He is chairman and chief executive officer of Emerson Electric ^[73] who supply hi-tech engineering equipment to companies including BP ^[74] and is a non-executive director of Anheuser-Busch ^[75] whose operations are focused on beer, adventure park entertainment and packaging ^[76] and of Morgan Stanley Dean Witter ^[77], Financial services (http://www.morganstanley.com), IBM and SBC Communications ^[78], the US telecomunications Company ^[79].

Maljers, Floris A. Director Age: 66

Floris Maljers joined Amoco's board in 1994. He is a member of the supervisory boards of SHV Holding ^[80] whose business encompasses LPG, Food, Recycling and Venture Capital; ^[81] Vendex N.V. ^[82] who market consumer goods in the Netherlands, Belgium, France, Germany, and the US; ^[83] and KLM Royal Dutch Airlines ^[84]. He is chairman of the supervisory board of the Amsterdam Concertgebouw and Rotterdam School of Management, Erasmus University ^[85].

Massey, Walter E. Position: Director Age: 61

Walter Massey first joined Amoco's board from 1983 to 1991, he rejoined in 1993. He is president of Morehouse College and is a non-executive director of Motorola (electronics company), Bank of America, McDonald's Corporation (fast food), the Mellon Foundation and the Commonwealth Fund ^[86], a private foundation which funds research on health ^[87].

Miles, H. Michael P. Director Age: 63

Michael Miles joined BP's board in 1994. He is chairman of Johnson Matthey and a non-executive director of ING Baring Holdings and BICC ^[88], both finance companies.

Nicholson, Robin Director Age: 65

Sir Robin joined BP's board in 1987, his past positions include chairmanship of Pilkington Optronics from which he retired in November 1998 ^[89]. Pilkington is the leading UK supplier of Electro-optic equipment ^[90]. He is a non-executive director of Rolls-Royce ^[91] the UK based automobile, aerospace and arms company, and a member of the UK Government's Council for Science and Technology ^[92].

Prosser, Ian Deputy Chairman of the Board Age: 56

Sir Ian joined BP's board in 1997 and was appointed deputy chairman in February 1999. He is chairman and chief executive of Bass (UK Brewers), a non-executive director of Glaxo-SmithKline (Pharmaceuticals) and vice president of the council of the Brewers and Licensed Retailers Association (UK) ^[93].

Wilson, Michael H. Director Age: 62

Wilson joined the board of Amoco in 1993, His other interests include his position as vice chairman and a director of RBC Dominion Securities and as a non-executive director of Manufacturers Life Insurance Company and of Rio Algom ^[94].

Wilson, Robert Director Age: 56

Sir Robert joined BP's board in July 1998. He is chairman of Rio Tinto, the notorious mining corporation and a non-executive director of Diageo ^[95] (Food and drink corporation ^[96]).

Wright, Lord Director Age: 68

Wright joined BP's board in 1991, having previously been Permanent Under-Secretary and Head of the UK Diplomatic Service. He is a non-executive director of De La Rue ^[97] the global 'cash transactions' business ^[98].

Hanratty, Judith C. Secretary Age: 56

Judith Hanratty joined BP in London in 1986 and was appointed company secretary in October 1994. She is a nominated member of the Council of Lloyds (the London Insurance Market), a member of the Competition Commission (formerly the UK Monopolies and Mergers Commission), and a member of the Listing Authorities Committee of The London Stock Exchange and the Takeover Panel (UK). She is also a governor of the College of Law and a Fellow of Lucy Cavendish College, Cambridge ^[99].

Browne, John Group Chief Executive, Director Age: 52

Often the public face of BP, Lord Browne was appointed an executive director in 1991 and group chief executive in 1995. He is a non-executive director of Goldman Sachs Group and of Intel Corporation (computer components); a trustee of the British Museum and a member of the supervisory board of Daimler Chrysler (automobile manufacturers). He is also vice president and a member of the board of the Prince of Wales' Business Leaders Forum ^[100]. He is said to be a cool-headed man who lives and breathes BP. He's one of the key characters credited with turning BP around since 1992.

Chase, Rodney F. Deputy Group Chief Executive, Director Age: 56

Rodney Chase was appointed an executive director of BP in 1992. When not at the helm of BP, he is a non-executive director of Diageo (Food and drink corporation) and the BOC Group ^[101] (chemicals).

Ford, Doug, Chief Executive, Refining and Marketing Age: 56

Doug Ford held a position as an executive vice president of Amoco from 1993 until January 2000 when he was appointed an executive director of BP Amoco. He is a non-executive director of USG Corporation ^[102] a US Fortune 500 corporation and manufacturer of building materials for the US construction industry ^[103].

Gibson-Smith, Chris S. Executive Director, Policies and Technology Age: 54

Chris Gibson-Smith, was appointed an executive director of BP in 1997. He is a non-executive director of Lloyds-TSB ^[104], the UK Bank.

Olver, Richard L. Chief Executive, Exploration and Production Age: 53

Dick Olver, was appointed an executive director of BP in January 1998, he is also a non-executive director of Reuters Group ^[105] (News Agency).

Sanderson, Bryan Chief Executive, Chemicals Age: 59

Bryan Sanderson, was appointed an executive director of BP in 1992. He is chairman of Sunderland PLC, the British Football Club and a non-executive director of Corus, the UK Metals group, (http://http://www.corusgroup.com). He is president of CEFIC: the European Chemical Industry Council and vice president of the court of governors of the London School of Economics ^[106].

Subsidiaries

BP PLC, registered in England at Britannic House, 1 Finsbury Circus, London, is the overall BP holding company.

First order subsidiaries of BP PLC include many national and regional divisions of BP such as: BP (Indian agencies) Ltd, BP Africa Ltd and BP China Ltd (all registered in England) The most notable first order subsidiary remains BP International Ltd (registered in England). Below the BP international umbrella lie many further subsidiaries such as BP America holdings Ltd (registered in England), BP America Inc (registered in USA) and BP Chemicals (International) Ltd (registered in England). Exploration and production (Ex-Pro.) is mostly divided into national subsidiaries under the BP Exploration Operating Co. Ltd, Ex-Pro. Subsidiaries include, for example: BP Exploration (Angola) Ltd and BP Exploration (Caspian Sea) Ltd.

Most BP subsidiaries can be recognised by the BP or Amoco name although others include The Standard Oil Co. Inc and more obscure examples such as Grangemouth Polypropylene Ltd. Wholly owned UK subsidiaries are suffixed by the letters Ltd (Limited Liability Company) and most US subsidiaries by the letters Inc. (Incorporated). A full list of subsidiaries can be found in Who owns Whom (vol.1 - UK & Ireland) available in the UK at most major libraries.

BP:Influence/Lobbying

Influencing research and education

BP has a working relationship with the following universities. These are key institutions, providing graduates to the oil industry, many courses, particularly in the field of geology receive funding from one or more oil companies: Imperial College, Aberdeen University, Cambridge University, Heriot-Watt University, Oxford University, Warwick University, Kingston University, Lincolnshire and Humberside University. BP recruits heavily from these universities. For more details of the oil industries involvement in higher education see Corporate Watch's briefing 'Degrees of Capture' or contact People & Planet about their 'Slick Protest' campaign ^[107]

Links with government

The strength of BP's links to Britain's New-Labour government became apparent within weeks of their election in 1997 when they appointed former chair of BP David Simon (Lord Simon of Highbury) to a position in the Department of Trade and Industry (DTI) as Minister for Competitiveness in Europe.

BP is represented on a number of government QUANGOs: the Learning & Skills Council, Competition Commission, DTI Advisory Panel on Photovoltaics, Council for Science & Technology, Commonwealth Development Corporation, Scottish Environment Protection Agency, Advice Committee on Business and Environment, Industrial Development Advice Board, Public Services Productivity Committee, Scottish National Heritage, UK Round Table on Sustainable Development, SW Essex Business & Education Partnership, and the Oil and Pipelines Agency.

PR Companies

BP's advertising agency is Ogilvy & Mather and their PR consultants Ogilvy PR. In the past BP has also used other companies and a number of the trade associations to which it belongs as environmental or community relations consultants.

Greenwash

A key plank of BP's marketing strategy has been to portray itself as a green company. BP has promoted new 'cleaner' fuels and publicised its targets for reducing CO2 emissions from its own operations (eg. by reducing gas flaring), not mentioning its ambitious targets for increased production of fossil fuels. In his introduction to BP's annual report 2000 John Browne prescribes that for the immediate future hydrocarbons will continue to meet the majority of our energy needs.

BP has further greened its image by being seen to talk with Oxfam and Friends of the Earth, and BP also sponsors cultural institutions including parts of the British Museum, Tate Gallery, Edinburgh Festival Fringe, Museum of Mankind and the National Portrait Gallery.

Perhaps ironically considering BP's role in climate change, BP employees were involved in raising money for the Mozambique flood appeal ^[108].

The marketing spin pushed by BP Solar is that "BP Solar is a recognized leader in protecting the environment and believes solar power is a key element to reduce the threat of global climate change and improve air quality." ^[109] No mention of BP group's core business here. In the UK, BP has used TV commercials about rural solar-electrification in the developing world. BP Solar has won multi-million dollar contracts for rural electrification in Indonesia and the Philippines and supplied photovoltaics to the 'green games' in Sydney, Australia ^[110].

BP:Corporate Crimes

Resources

Links

BP Website - http://www.bp.com BP-Solar Website - http://www.bpsolar.com BP Gas and Power - http://www.bpenergy.com

BP Subvert Site - http://www.bpamoco.org.uk Tibet Campaign - http://www.tibet.com New Internationalist 'Mired In Crude' special issue, June 2001 - http://www.newint.org