Search: in
BP
BP in Encyclopedia Encyclopedia
  Tutorials     Encyclopedia     Videos     Books     Software     DVDs  
       





BP

BP p.l.c.[1][2] (, ) is a British multinational oil and gas company headquartered in London, United Kingdom. It is the third-largest energy company and fourth-largest company in the world measured by 2011 revenues and one of the six oil and gas "supermajors".[3][4] It is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading. It also has major renewable energy activities, including in biofuels and wind power.

BP has operations in over 80 countries, produces around 3.4 million barrels of oil equivalent per day and has 21,800 service stations worldwide.[5][6] Its largest division is BP America, which is the second-largest producer of oil and gas in the United States and is headquartered in Houston, Texas.[7] , BP had total proven commercial reserves of 17.75 billion barrels of oil equivalent.[8] The name "BP" derives from the initials of one of the company's former legal names, British Petroleum.[9][10]

BP has been involved in a number of major environmental and safety incidents and received criticism for its political influence. In 1997 it became the first major oil company to publicly acknowledge the need to take steps against climate change, and in that year established a company-wide target to reduce its emissions of greenhouse gases.[11] BP currently invests over US$1 billion per year in the development of renewable energy sources, and has committed to spend US$8 billion on renewables in the 2005 to 2015 period.[12]

BP has a primary listing on the London Stock Exchange and is a constituent of the FTSE 100 Index. It had a market capitalisation of 87.1 billion as of 26 December 2011, the fourth-largest of any company listed on the London Stock Exchange.[13] It has a secondary listing on the New York Stock Exchange.

Contents


History

1909 to 1979

A 1922 BP advertisement

In May 1901, William Knox D'Arcy was granted a concession by the Shah of Iran to search for oil, which he discovered in May 1908.[14] This was the first commercially significant find in the Middle East. On 14 April 1909, the Anglo-Persian Oil Company (APOC) was incorporated as a subsidiary of Burmah Oil Company to exploit this.[14] In 1923, it employed future Prime Minister, Winston Churchill as a paid consultant, to lobby the British government to allow Burmah to have exclusive rights to Persian oil resources, which were successfully granted.[15] In 1935, it became the Anglo-Iranian Oil Company (AIOC).[14]

Following World War II, AIOC and the Iranian government initially resisted nationalist pressure to revise AIOC's concession terms still further in Iran's favour. But in March 1951, the pro-western Prime Minister Ali Razmara was assassinated.[16] The Majlis of Iran (parliament) elected a nationalist, Mohammed Mossadeq, as prime minister. In April, the Majlis nationalised the oil industry by unanimous vote.[17] The National Iranian Oil Company was formed as a result, displacing the AIOC.[18] The AIOC withdrew its management from Iran, and organised an effective boycott of Iranian oil. The British government which owned the AIOC contested the nationalisation at the International Court of Justice at The Hague, but its complaint was dismissed.[19]

By spring of 1953, incoming US President Dwight D. Eisenhower authorised the Central Intelligence Agency (CIA) to organise a coup against the Mossadeq government with support from the British government.[20] On 19 August 1953, Mossadeq was forced from office by the CIA conspiracy, involving the Shah and the Iranian military, and known by its codename, Operation Ajax.[20]

Mossadeq was replaced by pro-Western general Fazlollah Zahedi[21] and the Shah, who returned to Iran after having left the country briefly to await the outcome of the coup. The Shah abolished the democratic Constitution and assumed autocratic powers.

After the coup, Mossadeq's National Iranian Oil Company became an international consortium, and AIOC resumed operations in Iran as a member of it.[18] The consortium agreed to share profits on a 50 50 basis with Iran, "but not to open its books to Iranian auditors or to allow Iranians onto its board of directors."[22] AIOC, as a part of the Anglo-American coup d' tat deal, was not allowed to monopolise Iranian oil as before. It was limited to a 40% share in a new international consortium. For the rest, 40% went to the five major American companies and 20% went to Royal Dutch Shell and Compagnie Fran aise des P troles, now Total S.A..[23]

The AIOC became the British Petroleum Company in 1954. In 1959, the company expanded beyond the Middle East to Alaska[24] and in 1965 it was the first company to strike oil in the North Sea.[25] In 1978 the company acquired a controlling interest in Standard Oil of Ohio or Sohio, a breakoff of the former Standard Oil that had been broken up after anti-trust litigation.[26] In 1967 the giant oil tanker, the Torrey Canyon, foundered off the English coast, even though the ship was flying the well known flag of convenience, that of Liberia. The ship was in fact operated on behalf of BP. The Prime Minister of that time, 1967, had the ship bombed by RAF jet bombers, in an effort to break the ship up and sink it (see Torrey Canyon oil spill). This was unsuccessful, and the method has not been repeated. BP continued to operate in Iran until the Islamic Revolution in 1979. The new regime of Ayatollah Khomeini confiscated all of the company s assets in Iran without compensation, bringing to an end its 70-year presence in Iran.

1979 to 2000

Classic shield logo, designed by Raymond Loewy and used until 2002

Sir Peter Walters was the company chairman from 1981 to 1990.[27] This was the era of the Thatcher government's privatisation strategy. The British government sold its entire holding in the company in several tranches between 1979 and 1987.[28] The sale process was marked by an attempt by the Kuwait Investment Authority, the investment arm of the Kuwait government, to acquire control of the company.[29] This was ultimately blocked by the strong opposition of the British government. In 1987, British Petroleum negotiated the acquisition of Britoil[30] and the remaining publicly traded shares of Standard Oil of Ohio.[26]

Walters was replaced by Robert Horton in 1989. Horton carried out a major corporate down-sizing exercise removing various tiers of management at the Head Office.[31]

Standard Oil of California and Gulf Oil merged in 1984, the largest merger in history at that time. Under the anti-trust regulation, SoCal divested many of Gulf's operating subsidiaries, and sold some Gulf stations and a refinery in the eastern United States.[32]

John Browne, who had been on the board as managing director since 1991, was appointed group chief executive in 1995.[33] Browne was responsible for three major acquisitions; Amoco, ARCO and Burmah-Castrol (see below).

2000 to 2010

British Petroleum merged with Amoco (formerly Standard Oil of Indiana) in December 1998,[34] becoming BP Amoco plc.[35] In 2000, BP Amoco acquired Arco (Atlantic Richfield Co.)[36] and Burmah Castrol plc.[37] As part of the merger's brand awareness, the company helped the Tate Modern British Art launch RePresenting Britain 1500 2000[38] In 2001, the company formally renamed itself as BP plc[35] and adopted the tagline "Beyond Petroleum," which remains in use today. It states that BP was never meant to be an abbreviation of its tagline. Most Amoco stations in the United States were converted to BP's brand and corporate identity. In many states BP continued to sell Amoco branded petrol even in service stations with the BP identity as Amoco was rated the best petroleum brand by consumers for 16 consecutive years and also enjoyed one of the three highest brand loyalty reputations for petrol in the US, comparable only to Chevron and Shell. In May 2008, when the Amoco name was mostly phased out in favour of "BP Gasoline with Invigorate", promoting BP's new additive, the highest grade of BP petrol available in the United States was still called Amoco Ultimate.

Chief scientist, Steven Koonin (top right, with laptop), speaks about the energy scene in the boardroom in 2005.

In April 2004, BP decided to move most of its petrochemical businesses into a separate entity called Innovene within the BP Group. BP sought to sell the new company possibly via an initial public offering (IPO) in the US, and filed IPO plans for Innovene with the New York Stock Exchange on 12 September 2005. On 7 October 2005 BP announced that it had agreed to sell Innovene to INEOS, a privately held UK chemical company for $9 billion, thereby scrapping its plans for the IPO.[39] In 2005, BP announced that it would be leaving the Colorado market.[40] Many locations were re-branded as Conoco.[41] In 2006, when Chevron Corporation gave exclusive rights to the Texaco brand name in the US Texaco sold most of the BP gas stations in the southeast. BP has recently looked to grow its oil exploration activities in frontier areas such as the former Soviet Union for its future reserves.[42] In Russia, BP owns 50% of TNK-BP with the other half owned by three Russian billionaires. TNK-BP accounts for a fifth of BP's global reserves, a quarter of BP's production, and nearly a tenth of its global profits.[43]

In 2007, BP sold its corporate-owned convenience stores, typically known as "BP Connect", to local franchisees and jobbers.[44]

On 12 January 2007, it was announced that Lord Browne would retire as chief executive at the end of July 2007.[45] The new Chief Executive, Tony Hayward, had been head of exploration and production. It had been expected that Lord Browne would retire in February 2008 when he reached the age of 60, the standard retirement age at BP. Browne resigned abruptly from BP on 1 May 2007, following the lifting of a legal injunction preventing Associated Newspapers from publishing details about his gay lover. Hayward succeeded Browne with immediate effect.[46]

2010 to present

On 1 October 2010, Bob Dudley replaced Tony Hayward as the company's CEO.[47]

On 15 January 2011, Rosneft and BP announced a deal to jointly develop East-Prinovozemelsky field on the Russian arctic shelf. As part of the deal, Rosneft will receive 5% of BP's shares (worth approximately $7.8 billion, as of January 2011) and BP will get approximately 9.5% of Rosneft's shares in exchange.[48] According to the deal, the two companies will also create an Arctic technology centre in Russia to develop technologies and engineering practices for safe arctic hydrocarbons extraction.[49]

In February 2011, BP formed a partnership with Reliance Industries, taking a 30 percent stake in a new Indian joint-venture for an initial payment of $7.2 billion.[50]

Corporate affairs

Senior management

BP's world headquarters in St. James's, City of Westminster, London Westlake Park]], Houston The current members of the BP board of directors are:[51]

  • Carl-Henric Svanberg Chairman
  • Robert Dudley CEO (since 1 October 2010)
  • Brian Gilvary Chief Financial Officer
  • Andy Inglis Chief Executive, Exploration and Production
  • David Jackson - company secretary
  • Antony Burgmans non-executive director
  • Cynthia Carroll non-executive director
  • William Castell non-executive director
  • Paul Anderson non-executive director
  • Iain Conn non-executive director
  • George David non-executive director
  • Ian Davis non-executive director
  • Douglas Flint non-executive director
  • DeAnne Julius non-executive director

Financial data

Financial data in millions of US$
Year 2002 2003 2004 2005 2006 2007 2008 2009
Sales 180,186 236,045 294,849 249,465 265,906 284,365 361,341 239,272
EBITDA 22,941 28,200 37,825 41,453 44,835
Net results 6,845 10,267 15,961 22,341 22,000 20,845 21,157 16,578
Net debt 20,273 20,193 21,607 16,202 16,202
Source :OpesC

Company name

Ohio]], United States showing the previous 'Green Shield' branding Until 31 December 1998 the company was formally registered as the British Petroleum Company plc. Following a merger with Amoco the company adopted the name BP Amoco plc in January 1999, which was retained until May 2001 when the company was renamed BP p.l.c.[52][53] In the first quarter of 2001 the company adopted the marketing name of BP, replaced its Green Shield logo with the Helios symbol, a green and yellow sunflower pattern, and introduced a new corporate slogan Beyond Petroleum . The transition to the name and logo was managed by the advertising agency Ogilvy & Mather and the PR consultants, Ogilvy PR.[54] The Helios logo (Helios is the name of the Greek sun god), is designed to represent energy in its many forms. BP's tagline, "Beyond Petroleum", according to the company represents their focus on meeting the growing demand for fossil fuels, manufacturing and delivering more advanced products, and enabling the material transition to a lower carbon future.[55]

By the end of July 2010, independent BP station owners reported sales down 10 to 40 percent in the quarter after the Gulf oil spill and, while some hoped BP would return to the Amoco brand once used by many of the stations, others considered that would be a gamble because BP put so much effort into the brand.[56]

Operations

Exploration and production

BP's Exploration and Production division is responsible for the discovery, production and transportation of oil and gas to market. It operates in around 30 countries and employs more than 20,000 people.

Refining and Marketing

BP's Refining and Marketing division is responsible for the supply and trading, refining, marketing and transportation of oil, gas and petroleum products.

Air BP

A self-service Air BP fuelling station at the Kalamazoo/Battle Creek International Airport Air BP is the aviation division of BP, providing aviation fuel, lubricants & services. It has operations in over 50 countries worldwide.

BP Shipping

BP Shipping provides the logistics to move BP's oil and gas cargoes to market, as well as marine structural assurance[57] on everything that floats in the BP group. It manages a large fleet of vessels most of which are held on long-term operating leases. BP Shipping's chartering teams based in London, Singapore, and Chicago also charter third party vessels on both time charter and voyage charter basis.

The BP-managed fleet consists of Very Large Crude Carriers (VLCCs), one North Sea shuttle tanker, medium size crude and product carriers, liquefied natural gas (LNG) carriers, liquefied petroleum gas (LPG) carriers, and coasters. All of these ships are double-hulled.[58]

Castrol

Castrol is a brand of industrial and automotive lubricants which is applied to a large range of BP oils, greases and similar products for most lubrication applications.

Service stations

ampm

ampm is a convenience store chain with branches located in several US states including Arizona, California, Nevada, Ohio, Oregon, Washington, recently in Illinois, Indiana, Georgia and Florida, and in several countries worldwide such as Japan. In the western US, the stores are usually attached to an ARCO gas station; elsewhere, the stores are attached to BP gas stations. BP Connect stations in the US are transitioning to the ampm brand.

Aral

Aral]] service station in Germany

In Germany and Luxembourg, BP operates its petrol retail chain under the name Aral after acquiring the majority of Veba l AG in 2001 and rebranding almost all of its BP filling stations to Aral.

ARCO

ARCO is BP's retail brand on the US West Coast in the seven Western states of California, Oregon, Washington, Nevada, Idaho, Arizona, and Utah. BP acquired ARCO (formerly the Atlantic Richfield Company) in 2000. ARCO is a popular "cash only" retailer, selling products refined from Alaska North Slope crude at the Cherry Point Refinery in Washington, a plant in Los Angeles, and at other contract locations on the West Coast.

BP Connect

BP Connect is BP's flagship retail brand name with BP Connect Service stations being operated around the UK, Europe, USA, Australia, New Zealand and other parts of the world. BP Connect sites feature the Wild Bean Cafe, which offers cafe-style coffee made by the staff and a selection of hot food as well as freshly baked muffins and sandwiches. The food offered in Wild Bean Cafe varies from each site. BP Connect sites usually offer table and chair seating and often an Internet kiosk. In the US, the BP Connect concept is gradually being transitioned to the ampm brand and concept. Some BP Connect sites around the UK ran in partnership with Marks & Spencer with the on-site shop being an M&S Simply Food instead of a BP Shop.

BP Express

In the Netherlands, BP is opening unmanned stations with no shops or employees. These stations are called BP Express.[59] Some of these stations used to be 'ordinary' BP stations and others are new to the BP network. Apart from these stations, BP Express shopping does also exist in the Netherlands.

BP 2go

A BP 2go branded service station in Australia BP 2go is a franchise brand used for independently operated sites in New Zealand and Australia (although not all BP 2go stores are franchises in Australia). BP 2go offers similar bakery food to BP Connect but in a pre-packaged form.

BP Travel Centres

BP Travel Centres are large-scale destination sites located in Australia which, on top of offering the same features of a BP Connect site with fuel and a Wild Bean Cafe, also feature major food-retail tenants such as McDonald's, KFC, Nando's and Krispy Kreme, with a large seating capacity food court. There are also facilities for long-haul truck drivers, including a lounge, showers and washing machines all in the same building.

BP Canada

BP Canada operated retail locations in Canada from 1948 to 1982, which were sold and rebranded as Petro Canada.

Corporate social responsibility

Environmental record

BP was named by Multinational Monitor as one of the ten worst corporations in both 2001 and 2005 based on its environmental and human rights records.[60] In 1991 BP was cited as the most polluting company in the US based on EPA toxic release data. BP has been charged with burning polluted gases at its Ohio refinery (for which it was fined $1.7 million), and in July 2000 BP paid a $10 million fine to the EPA for its management of its US refineries.[61] According to PIRG research, between January 1997 and March 1998, BP was responsible for 104 oil spills.[62] BP patented the Dracone Barge to aid in oil spill clean-ups across the world.[63]

As of 11 February 2007, BP announced that it would spend $8 billion over ten years to research alternative methods of fuel, including natural gas, hydrogen, solar, and wind. A $500 million grant to the University of California, Berkeley, Lawrence Berkeley National Laboratory, and the University of Illinois at Urbana-Champaign, to create an Energy Biosciences Institute[64] has recently come under attack, over concerns about the global impacts of the research and privatisation of public universities.[65]

BP's investment in green technologies peaked at 4% of its exploratory budget, but they have since closed their alternative energy headquarters in London. As such they invest more than other oil companies, but it has been called greenwashing due to the small proportion of the overall budget.[66] BP was a nominee for the 2009 Greenwash Awards for deliberately exaggerating its environmental credentials. According to Greenpeace in 2008 BP invested $20 billion in fossil fuels, but only $1.5 billion in all alternative forms of energy.[67]

In 2004, BP began marketing low-sulphur diesel fuel for industrial use.

In July 2006, critics pointed to the relative lack of press coverage about a spill of 270,000 gallons of crude oil that spread into the Alaskan tundra, noting this as evidence that BP had successfully greenwashed its image, while maintaining environmentally unsound practices.[68][69] BP also put plans on hold to market a fuel that is 85% Ethanol and 15% Butanol (E85B), so existing internal combustion engines could run on a 100% renewable fuel. The lack of follow-through was cited as another example of BP's greenwashing. (Butanol can be used in internal combustion engines, but BP has no infrastructure to produce Butanol from biomass sources).

In 2008, BP was awarded a satirical prize, the "Emerald Paintbrush" award, from Greenpeace UK. The "Emerald Paintbrush" award was given to BP in order to highlight its alleged greenwashing campaign. Critics point out that while BP advertises its activities in alternative energy sources, the majority of its capital investments continue to go into fossil fuels.[70] BP was also one nominee for the 2009 Greenwash Awards.[71]

Renewable energy

Between 2005 and 2010, BP invested about $5 billion in its renewable energy business, mainly in biofuel and wind power projects. In 2011, BP planned to invest $1 billion in renewables, roughly the same amount it invested in 2010.[72]

In 2011, BP announced a plan to construct a biofuel refinery in the Southeastern US. In 2010, it took a full control of Vercipia Biofuels, a cellulosic ethanol producer originally established as a joint venture with Verenium Corporation. In Brazil, BP holds a 50% stake in Tropical BioEnergia and plans to operate two ethanol refineries. In the US BP has more than 1,200 megawatts (MW) of wind-powered electricity capacity and in July 2010 it began construction of the 250 MW Cedar Creek II Wind Farm in Colorado.[72]

BP's subsidiary BP Solar was a producer of solar panels since its purchase of Lucas Energy Systems in 1980 and Solarex (as part of its acquisition of Amoco) in 2000. Through a series of acquisitions in the solar power industry BP Solar became the third largest producer of solar panels in the world. 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. Due to competition from China, BP closed its US plants in Frederick, Maryland as part of a transition to manufacturing in China.[73] In December 2011, BP Solar was closed and BP withdrew from the solar power industry, saying it was no longer profitable.[74][75][76][77]

Climate change

BP was a founding sponsor of the University of East Anglia's Climatic Research Unit in 1971, the research unit that was at the center of the Climategate scandal in November 2009.[78]

BP Amoco was a member of the Global Climate Coalition an industry organisation established to promote global warming scepticism but withdrew in 1997, saying "the time to consider the policy dimensions of climate change is not when the link between greenhouse gases and climate change is conclusively proven, but when the possibility cannot be discounted and is taken seriously by the society of which we are part. We in BP have reached that point.".[79]

In March 2002, Lord Browne of Madingley 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."[80]

BP is a sponsor of the Scripps Institution CO2 program to measure carbon dioxide levels in the atmosphere.[81]

1993 1995: Hazardous substance dumping

In September 1999, one of BP s US subsidiaries, BP Exploration Alaska (BPXA), agreed to resolve charges related to the illegal dumping of hazardous wastes on the Alaska North Slope, for $22 million. The settlement included the maximum $500,000 criminal fine, $6.5 million in civil penalties, and BP s establishment of a $15 million environmental management system at all of BP facilities in the US and Gulf of Mexico that are engaged in oil exploration, drilling or production. The charges stemmed from the 1993 to 1995 dumping of hazardous wastes on Endicott Island, Alaska by BP s contractor Doyon Drilling. The firm illegally discharged waste oil, paint thinner and other toxic and hazardous substances by injecting them down the outer rim, or annuli, of the oil wells. BPXA failed to report the illegal injections when it learned of the conduct, in violation of the Comprehensive Environmental Response, Compensation and Liability Act.[82]

2006 2007: Prudhoe Bay

Anchorage]] In August 2006, BP shut down oil operations in Prudhoe Bay, Alaska, due to corrosion in pipelines leading up to the Alaska Pipeline. The wells were leaking insulating agent called Arctic pack, consisting of crude oil and diesel fuel, between the wells and ice.[83] BP had spilled over one million litres of oil in Alaska's North Slope.[84] This corrosion is caused by sediment collecting in the bottom of the pipe, protecting corrosive bacteria from chemicals sent through the pipeline to fight these bacteria. There are estimates that about of oil were released from the pipeline. To date of liquids, about of soiled snow and of soiled gravel have been recovered. After approval from the DOT, only the eastern portion of the field was shut down, resulting in a reduction of until work began to bring the eastern field to full production on 2 October 2006.[85]

In May 2007, the company announced another partial field shutdown owing to leaks of water at a separation plant. Their action was interpreted as another example of fallout from a decision to cut maintenance of the pipeline and associated facilities.[86]

On 16 October 2007, Alaska Department of Environmental Conservation officials reported a toxic spill of methanol (methyl alcohol) at the Prudhoe Bay oil field managed by BP PLC. Nearly 2,000 gallons of mostly methanol, mixed with some crude oil and water, spilled onto a frozen tundra pond as well as a gravel pad from a pipeline. Methanol, which is poisonous to plants and animals, is used to clear ice from the insides of the Arctic-based pipelines.[87]

2010: Texas City chemical leak

Two weeks prior to the Deepwater Horizon explosion, BP admitted that malfunctioning equipment lead to the release of over 530,000 lbs of chemicals into the air of Texas City and surrounding areas from 6 April to 16 May. The leak included 17,000 pounds of benzene (a known carcinogen), 37,000 pounds of nitrogen oxides (which contribute to respiratory problems), and 186,000 pounds of carbon monoxide.[88][89]

2010: Deepwater Horizon oil spill

Anchor handling tugs]] combat the fire on the Deepwater Horizon while the United States Coast Guard searches for missing crew. Public protest in New Orleans following the Deepwater Horizon oil spill. On 20 April 2010, the semi-submersible exploratory offshore drilling rig Deepwater Horizon exploded after a blowout; it sank two days later, killing 11 people. This blowout in the Macondo Prospect field in the Gulf of Mexico resulted in a partially capped oil well one mile below the surface of the water. Experts estimate the gusher to be flowing at of oil.[90][91][92] The exact flow rate is uncertain due to the difficulty of installing measurement devices at that depth and is a matter of ongoing debate.[93] The resulting oil slick covers at least , fluctuating from day to day depending on weather conditions.[94] It threatens the coasts of Louisiana, Mississippi, Alabama, Texas, and Florida.

The drilling rig was owned and operated by Transocean Ltd[95] on behalf of BP, which is the majority owner of the Macondo oil field. At the time of the explosion, there were 126 crew on board; seven were employees of BP and 79 of Transocean. There were also employees of various other companies involved in the drilling operation, including Anadarko, Halliburton and M-I Swaco.[96]

The US Government has named BP the responsible party, and officials have committed to hold the company accountable for all clean-up costs and other damage.[97][98] BP has stated that it would harness all of its resources to battle the oil spill, spending $7 million a day with its partners to try to contain the disaster.[99] In comparison, BP's 1st quarter profits for 2010 were approximately $61 million per day.[100] BP has agreed to create a $20 billion spill response fund administered by Kenneth Feinberg.[101][102][103] The amount of this fund is not a cap or a floor on BP's liabilities. BP will pay $3 billion in third quarter of 2010 and $2 billion in fourth quarter into the fund followed by a payment of $1.25 billion per quarter until it reaches $20 billion. In the interim, BP posts its US assets worth $20 billion as bond. For the fund's payments, BP will cut its capital spending budget, sell $10 billion in assets, and drop its dividend.[101][104] BP has also been targeted in litigation over the claims process it put in place for victims. A class action lawsuit was filed against BP and its initial claims administrator, the ACE, Ltd. Insurance Group company ESIS.[105]

BP began testing the tighter-fitted cap designed to stop the flow of oil into the Gulf of Mexico from a broken well for the first time in almost three months.[106] The test began Wednesday, 14 July 2010 with BP shutting off pipes that were funnelling some of the oil to ships on the surface, so the full force of the gusher went up into the cap.[106] Then deep-sea robots began slowly closing one at a time three openings in the cap that let oil pass through.[106] Ultimately, the flow of crude was stopped.[106] All along, engineers were and still are watching pressure readings to learn whether the well is intact.[106] Former coast guard admiral Thad Allen, the Obama administration's point man on the disaster, said the government gave the testing go-ahead after carefully reviewing the risks.[106] "What we didn't want to do is compound that problem by making an irreversible mistake," he said.[106]

Stock decline and takeover speculations

Following the Deepwater Horizon Oil Spill, BP's stock fell by 52% in 50 days on the New York Stock Exchange, going from $60.57 on 20 April 2010, to $29.20 on 9 June, its lowest level since August 1996. There were speculations in the press, guided by the commentary of Fred Lucas, Energy Analyst at J.P. Morgan Cazenove, that there would be a takeover of the company, focusing on possible bids from Exxon or Shell at a presumed price of 88 billion.[107] In addition, BP executives held talks with a number of sovereign wealth funds including funds from Abu Dhabi, Kuwait, Qatar and Singapore, for creation of a strategic partnership to avoid takeover by other major oil companies.[108] BP has either rejected or refused to react to these overtures.

On 27 July 2010, BP announced a net loss of $16.97 billion during the second quarter of 2010, with the oil spill costing $32.2 billion up to that point.[109] Also on 27 July 2010, BP confirmed that CEO Hayward would resign and be replaced by Bob Dudley on 1 October 2010.[109]

Mist mountain project

There have been some calls by environmental groups for BP to halt its "Mist Mountain" Coalbed Methane Project in the Southern Rocky Mountains of British Columbia and for the UN to investigate the mining activities.[110] The proposed 500 km project is directly adjacent to the Waterton-Glacier International Peace Park.[111]

Canadian oil sands

BP is one of numerous firms who are extracting oil from Canadian oil sands, a process that produces four times as much CO2 as conventional drilling.[112] The Cree First Nation describe this as 'the biggest environmental crime on the planet'.[113]

Safety record

1965: Sea Gem offshore oil rig disaster

In December 1965, while the BP oil rig Sea Gem was being moved, two of its legs collapsed and the rig capsised. Thirteen crew were killed. Sea Gem was the first British offshore oil rig.[114]

2005: Texas City Refinery explosion

In March 2005, BP's Texas City, Texas refinery, one of its largest refineries, exploded causing 15 deaths, injuring 180 people and forcing thousands of nearby residents to remain sheltered in their homes.[115] A large column filled with hydrocarbon overflowed to form a vapour cloud, which ignited. The explosion caused all the casualties and substantial damage to the rest of the plant. The incident came as the culmination of a series of less serious accidents at the refinery, and the engineering problems were not addressed by the management. Maintenance and safety at the plant had been cut as a cost-saving measure, the responsibility ultimately resting with executives in London.[116]

The fallout from the accident continues to cloud BP's corporate image because of the mismanagement at the plant. There have been several investigations of the disaster, the most recent being that from the US Chemical Safety and Hazard Investigation Board[117] which "offered a scathing assessment of the company." OSHA found "organizational and safety deficiencies at all levels of the BP Corporation" and said management failures could be traced from Texas to London.[115]

The company pleaded guilty to a felony violation of the Clean Air Act, was fined $50 million, and sentenced to three years probation.

On 30 October 2009, the US Occupational Safety and Health Administration (OSHA) fined BP an additional $87 million the largest fine in OSHA history for failing to correct safety hazards revealed in the 2005 explosion. Inspectors found 270 safety violations that had been previously cited but not fixed and 439 new violations. BP is appealing that fine.[115][118] (see ).

2006 2010: Refinery fatalities and safety violations

From January 2006 to January 2008, three workers were killed at the company's Texas City, Texas refinery in three separate accidents. In July 2006 a worker was crushed between a pipe stack and mechanical lift, in June 2007, a worker was electrocuted, and in January 2008, a worker was killed by a 500-pound piece of metal that came loose under high pressure and hit him.[119]

Facing scrutiny after the Texas City Refinery explosion, two BP-owned refineries in Texas City, and Toledo, were responsible for 97 percent (829 of 851) of wilful safety violations by oil refiners between June 2007 and February 2010, as determined by inspections by the Occupational Safety and Health Administration. Jordan Barab, deputy assistant secretary of labour at OSHA, said "The only thing you can conclude is that BP has a serious, systemic safety problem in their company."[120]

Disclosed US diplomatic cables by WikiLeaks revealed that BP had covered up a gas leak and blowout incident in September 2008 at a gas field under production in the Azeri-Chirag-Guneshi area of the Azerbaijan Caspian Sea. According to the cables, BP was lucky to have been able to evacuate everyone safely given the explosive potential. BP did not only hold back information to the public about the incident but even upset its partner firms in limiting the information shared. In January 2009, BP blaimed a bad cement job as the cause for the incident. The Guardian noted a striking resemblance with the later oil spill disaster in the Gulf of Mexico.[121]

2010: Deepwater Horizon well explosion

The 20 April 2010 explosion on BP's offshore drilling rig in the Gulf of Mexico resulted in the deaths of eleven people and caused the biggest accidental marine oil spill in the history of the petroleum industry.[122][123][124]

Political record

2007: Propane price manipulation

Four BP energy traders in Houston were charged with manipulating prices of propane in October 2007. As part of the settlement of the case, BP paid the US government a $303 million fine, the largest commodity market settlement ever in the US. The settlement included a $125 million civil fine to the Commodity Futures Trading Commission, $100 million to the Justice Department, $53.3 million to a restitution fund for purchasers of the propane BP sold, and $25 million to a US Postal Service consumer fraud education fund.[125][126]

2008: Oil price manipulation

In May 2010, the Supreme Court of Arbitration of the Russian Federation agreed in support of the country s antimonopoly service s decision to a 1.1 billion Ruble fine ($35.2 million) against TNK/BP, a 50/50 joint venture, for abusing anti-trust legislation and setting artificially high oil products prices in 2008, TNK and BP declined comment.[127]

Baku Tbilisi Ceyhan pipeline

BP has been criticised for its involvement with Baku Tbilisi Ceyhan pipeline due to human rights, environmental and safety concerns.[128]

Colombian pipeline

In July 2006, a group of Colombian farmers won a multi-million pound settlement from BP after the company was accused of benefiting from a regime of terror carried out by Colombian government paramilitaries to protect the Ocensa pipeline.[129]

Contributions to political campaigns

According to the Center for Responsive Politics, BP is the United States' hundredth largest donor to political campaigns, having contributed more than US$5 million since 1990, 72% and 28% of which went to Republican and Democratic recipients, respectively. BP has lobbied to gain exemptions from US corporate law reforms.[130] Additionally, BP paid the Podesta Group, a Washington, D.C.-based lobbying firm, $160,000 in the first half of 2007 to manage its congressional and government relations.[131]

In February 2002, BP's chief executive, Lord Browne of Madingley, 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."[132]

Despite this, in 2009 BP used nearly US$16 million to lobby US Congress, breaking the company's previous record (from 2008) of US$10.4 million.[133]

See also

  • Oil fields operated by BP
  • Shell-Mex and BP
  • BP Solar
  • BP Ford Abu Dhabi World Rally Team
  • Deepwater Horizon oil spill

References

Further reading

External links

Official

Other

ar: az:BP bg: ca:BP cs:BP (firma) da:BP de:BP et:BP es:BP eo:BP (firmao) eu:British Petroleum fa: fr:BP (entreprise) ko:BP ( ) id:Bp is:BP it:BP (azienda) he:BP kk: lv:BP lt:BP hu:BP mr: nl:BP (oliemaatschappij) ja:BP ( ) no:BP nn:Oljeselskapet BP pl:BP (koncern) pt:BP ro:BP (companie) ru:BP sk:BP (ropn podnik) fi:BP (yritys) sv:BP ta: . te: th: tr:BP uk:British Petroleum vi:BP yi:BP zh:BP






Source: Wikipedia | The above article is available under the GNU FDL. | Edit this article



Search for BP in Tutorials
Search for BP in Encyclopedia
Search for BP in Videos
Search for BP in Books
Search for BP in Software
Search for BP in DVDs
Search for BP in Store




Advertisement




BP in Encyclopedia
BP top BP

Home - Add TutorGig to Your Site - Disclaimer

©2011-2013 TutorGig.info All Rights Reserved. Privacy Statement