BP (other)

BP p.l.c. (formerly The British Petroleum Company p.l.c and BP Amoco p.l.c) is a British multinational oil and gas company headquartered in London, England. It is one of the oil and gas " supermajors" and one of the world's largest companies measured by revenues and profits. It is a vertically integrated company operating in all areas of the oil and gas industry, including exploration and extraction, refining, distribution and marketing, power generation, and trading.

BP's origins date back to the founding of the Anglo-Persian Oil Company in 1909, established as a subsidiary of Burmah Oil Company to exploit oil discoveries in Iran. In 1935, it became the Anglo-Iranian Oil Company and in 1954, adopted the name British Petroleum. In 1959, the company expanded beyond the Middle East to Alaska. British Petroleum acquired majority control of Standard Oil of Ohio in 1978. Formerly majority state-owned, the British government privatised the company in stages between 1979 and 1987. British Petroleum merged with Amoco in 1998, becoming BP Amoco plc, and acquired ARCO and Burmah Castrol in 2000 and Aral AG in 2002. The company's name was shortened to BP p.l.c. in 2001. From 2003 to 2013, BP was a partner in the TNK-BP joint venture in Russia, and from 2013 until Russia's 2022 invasion of Ukraine, held a nearly 20% stake in Rosneft.

, BP had operations in nearly 80 countries, produced around of oil equivalent, and had total proven reserves of of oil equivalent. The company has around 18,700 service stations worldwide, which it operates under the BP brand (worldwide) and under the Amoco brand (in the United States) and the Aral brand (in Germany). Its largest division is BP America in the United States. BP is the fourth-largest investor-owned oil company in the world by 2021 revenues (after ExxonMobil, Shell, and TotalEnergies). BP had a market capitalisation of US$98.36 billion as of 15 September 2022, placing it 122nd in the world, and its Fortune Global 500 rank was 35th in 2022 with revenues of US$164.2 billion. The company trades on the London Stock Exchange (where it is a member of the FTSE 100 Index), the Frankfurt Stock Exchange, and the New York Stock Exchange.

From 1988 to 2015, BP was responsible for 1.53% of global industrial greenhouse gas emissions. BP has been directly involved in several major environmental and safety incidents. Among them were the 2005 Texas City Refinery explosion, which caused the death of 15 workers and which resulted in a record-setting OSHA fine; Britain's largest oil spill, the wreck of ''Torrey Canyon'' in 1967; and the 2006 Prudhoe Bay oil spill, the largest oil spill on Alaska's North Slope, which resulted in a US$25 million civil penalty, the largest per-barrel penalty at that time for an oil spill. BP's worst environmental catastrophe was the 2010 ''Deepwater Horizon'' oil spill, the largest accidental release of oil into marine waters in history, which leaked about of oil, causing severe environmental, human health, and economic consequences and serious legal and public relations repercussions for BP, eventually paying more than $4.5 billion in fines and penalties, and an additional $18.7 billion in Clean Water Act-related penalties and other claims, the largest criminal resolution in US history. Altogether, the oil spill cost the company more than $65 billion.

History

1909 to 1954

In May 1908, a group of British geologists discovered a large amount of oil at Masjed Soleyman located in the Khuzestan Province in the southwest of Persia (Iran). It was the first commercially significant find of oil in the Middle East. William Knox D'Arcy, by contract with Ali-Qoli Khan Bakhtiari, obtained permission to explore for oil for the first time in the Middle East, an event which changed the history of the entire region. The oil discovery led to petrochemical industry development and also the establishment of industries that strongly depended on oil. On 14 April 1909, the Anglo-Persian Oil Company (APOC) was incorporated as a subsidiary of Burmah Oil Company. Some of the shares were sold to the public. The first chairman and minority shareholder of the company became Lord Strathcona.

Immediately after establishing the company, the British government asked Percy Cox, British resident to Bushehr, to negotiate an agreement with Sheikh Khaz'al Ibn Jabir of Arabistan for APOC to obtain a site on Abadan Island for a refinery, depot, storage tanks, and other operations. The refinery was built and began operating in 1912. In 1914, the British government acquired a controlling interest (50.0025%) in the company, at the urging of Winston Churchill, the then First Lord of the Admiralty, and the British navy quickly switched from coal to oil for the majority of their war ships. APOC also signed a 30-year contract with the British Admiralty for supplying oil for the Royal Navy at the fixed price. In 1915, APOC established its shipping subsidiary the British Tanker Company and in 1916, it acquired the British Petroleum Company which was a marketing arm of the German ''Europäische Petroleum Union'' in Britain. In 1919, the company became a shale-oil producer by establishing a subsidiary named Scottish Oils which merged remaining Scottish oil-shale industries.

After World War I, APOC started marketing its products in Continental Europe and acquired stakes in the local marketing companies in several European countries. Refineries were built in Llandarcy in Wales (the first refinery in the United Kingdom) and Grangemouth in Scotland. It also acquired the controlling stake in the Courchelettes refinery in France and formed, in conjunction with the Government of Australia, a partnership named Commonwealth Oil Refineries, which built the Australian's first refinery in Laverton, Victoria. In 1923, Burmah employed Winston Churchill as a paid consultant to lobby the British government to allow APOC have exclusive rights to Persian oil resources, which were subsequently granted by the Iranian monarchy.

APOC and the Armenian businessman Calouste Gulbenkian were the driving forces behind the creation of Turkish Petroleum Company (TPC) in 1912, to explore oil in Mesopotamia (now Iraq); and by 1914, APOC held 50% of TPC shares. In 1925, TPC received concession in the Mesopotamian oil resources from the Iraqi government under British mandate. TPC finally struck oil in Iraq on 14 October 1927. By 1928, the APOC's shareholding in TPC, which by now was named Iraq Petroleum Company (IPC), was reduced to 23.75%; as the result of the changing geopolitics post Ottoman empire break-up, and the Red Line Agreement. Relations were generally cordial between the pro-west Hashemite Monarchy (1932–58) in Iraq and IPC, in spite of disputes centred on Iraq's wish for greater involvement and more royalties. During the 1928–68 time period, IPC monopolised oil exploration inside the Red Line; excluding Saudi Arabia and Bahrain.

In 1927, Burmah Oil and Royal Dutch Shell formed the joint marketing company Burmah-Shell. In 1928, APOC and Shell formed the Consolidated Petroleum Company for sale and marketing in Cyprus, South Africa and Ceylon, which in 1932 followed by a joint marketing company Shell-Mex and BP in the United Kingdom. Ferrier (1982), p. 463 In 1937, AIOC and Shell formed the Shell/D'Arcy Exploration Partners partnership to explore for oil in Nigeria. The partnership was equally owned but operated by Shell. It was later replaced by Shell-D'Arcy Petroleum Development Company and Shell-BP Petroleum Development Company (now Shell Petroleum Development Company). Bamberg (2000), pp. 109–110

In 1934, APOC and Gulf Oil founded the Kuwait Oil Company as an equally owned partnership. The oil concession rights were awarded to the company on 23 December 1934 and the company started drilling operations in 1936. In 1935, Rezā Shāh requested the international community to refer to Persia as 'Iran', which was reflected in the name change of APOC to the Anglo-Iranian Oil Company (AIOC).

In 1937, Iraq Petroleum Company, 23.75% owned by BP, signed an oil concession agreement with the Sultan of Muscat that covers the entire region of the Sultanate, which was in fact limited to the coastal area of present-day Oman. After several years of failure to discover oil in the Sultanate's region, IPC presumed that oil was more likely to be found in the interior region of Oman, which was part of the Imamate of Oman. IPC offered financial support to raise an armed force that would assist the Sultanate in occupying the interior region of Oman. Later, in 1954, the Sultan of Muscat, backed by the British government and the financial aid he received from IPC, started occupying regions within the interior of Oman, which led to the outbreak of Jebel Akhdar War that lasted for more than 5 years.

In 1947, British Petroleum Chemicals was incorporated as a joint venture of AIOC and The Distillers Company. In 1956, the company was renamed British Hydrocarbon Chemicals. Bamberg (2000), pp. 350–352

Following World War II, nationalistic sentiments were on the rise in the Middle East; most notable being Iranian nationalism, and Arab Nationalism. In Iran, the AIOC and the pro-western Iranian government led by Prime Minister Ali Razmara resisted nationalist calls to revise AIOC's concession terms in Iran's favour. In March 1951, Razmara was assassinated and Mohammed Mossadeq, a nationalist, was elected as the new prime minister by the Majlis of Iran (parliament). In April 1951, the Iranian government nationalised the Iranian oil industry by unanimous vote, and the National Iranian Oil Company (NIOC) was formed, displacing the AIOC. The AIOC withdrew its management from Iran, and Britain organised an effective worldwide embargo 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.

Prime Minister Churchill asked President Eisenhower for help in overthrowing Mossadeq. The anti-Mossadeq plan was orchestrated under the code-name 'Operation Ajax' by CIA, and 'Operation Boot' by SIS (MI6). The CIA and the British helped stage a coup in August 1953, the 1953 Iranian coup d'état, which established pro-Western general Fazlollah Zahedi as the new PM, and greatly strengthened the political power of Shah Mohammad Reza Pahlavi. The AIOC was able to return to Iran.

1954 to 1979

In 1954, the AIOC became the British Petroleum Company. After the 1953 Iranian coup d'état, Iranian Oil Participants Ltd (IOP), a holding company, was founded in October 1954, in London to bring Iranian oil back to the international market. British Petroleum was a founding member of this company with 40% stake. IOP operated and managed oil facilities in Iran on behalf of NIOC. Similar to the Saudi-Aramco "50/50" agreement of 1950, 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."

In 1953, British Petroleum entered the Canadian market through the purchase of a minority stake in Calgary-based Triad Oil Company, and expanded further to Alaska in 1959, resulting discovery of oil at Prudhoe Bay in 1969. In 1956, its subsidiary D'Arcy Exploration Co. (Africa) Ltd. has been granted four oil concessions in Libya. In 1962, Scottish Oils ceased oil-shale operations. In 1965, it was the first company to strike oil in the North Sea. In 1969, BP entered the United States by acquiring the East Coast refining and marketing assets of Sinclair Oil Corporation. Bamberg (2000), p. 273 The Canadian holding company of British Petroleum was renamed BP Canada in 1969; and in 1971, it acquired 97.8% stake of Supertest Petroleum.

By the 1960s, British Petroleum had developed a reputation for taking on the riskiest ventures. It earned the company massive profits; it also earned them the worst safety record in the industry. In 1967, the giant oil tanker ''Torrey Canyon'' foundered off the English coast. Over of crude oil was spilled into the Atlantic and onto the beaches of Cornwall and Brittany, causing Britain's worst-ever oil spill. The ship was owned by the Bahamas-based Barracuda Tanker Corporation and was flying the flag of Liberia, a well-known flag of convenience, but was being chartered by British Petroleum. The ship was bombed by RAF jet bombers in an effort to break up the ship and burn off the leaking oil, but this failed to destroy the oil slick.

In 1967, BP acquired chemical and plastics assets of The Distillers Company which were merged with British Hydrocarbon Chemicals to form BP Chemicals. Bamberg (2000), pp. 385–389

The company's oil assets were nationalised in Libya in 1971, in Kuwait in 1975, and in Nigeria in 1979. In Iraq, IPC ceased its operations after it was nationalised by the Ba'athist Iraqi government in June 1972, although legally Iraq Petroleum Company still remains in existence but as a dormant company, and one of its associated companies —Abu Dhabi Petroleum Company (ADPC), formerly Petroleum Development (Trucial Coast) Ltd – also continues with the original shareholding intact.

The intensified power struggle between oil companies and host governments in Middle East, along with the oil price shocks that followed the 1973 oil crisis meant British Petroleum lost most of its direct access to crude oil supplies produced in countries that belonged to the Organization of Petroleum Exporting Countries (OPEC), and prompted it to diversify its operations beyond the heavily Middle East dependent oil production. In 1976, BP and Shell de-merged their marketing operations in the United Kingdom by dividing Shell-Mex and BP. In 1978, the company acquired a controlling interest in Standard Oil of Ohio (Sohio).

In Iran, British Petroleum continued to operate until the Islamic Revolution in 1979. The new regime of Ayatollah Khomeini nationalised all of the company's assets in Iran without compensation: as a result, BP lost 40% of its global crude oil supplies.

In 1970–1980s, BP diversified into coal, minerals and nutrition businesses which all were divested later.

1979 to 1997

The British government sold 80 million shares of BP at $7.58 in 1979, as part of Thatcher-era privatisation. This sale represented slightly more than 5% of BP's total shares and reduced the government's ownership of the company to 46%. On 19 October 1987, Prime Minister Margaret Thatcher authorised the sale of an additional GBP7.5 billion ($12.2 billion) of BP shares at 333 pence, representing the government's remaining 31% stake in the company.

In November 1987, the Kuwait Investment Office purchased a 10.06% interest in BP, becoming the largest institutional shareholder. The following May, the KIO purchased additional shares, bringing their ownership to 21.6%. This raised concerns within BP that operations in the United States, BP's primary country of operations, would suffer. In October 1988, the British Department of Trade and Industry required the KIO to reduce its shares to 9.6% within 12 months.

Peter Walters was the company chairman from 1981 to 1990. During his period as chairman he reduced the company's refining capacity in Europe. In 1982, the downstream assets of BP Canada were sold to Petro Canada. In 1984, Standard Oil of California was renamed the Chevron Corporation; it bought Gulf Oil—the largest merger in history at that time. To meet anti-trust regulations, Chevron divested many of Gulf's operating subsidiaries, and sold some Gulf stations and a refinery in the eastern United States to British Petroleum and Cumberland Farms in 1985. In 1987, British Petroleum negotiated the acquisition of Britoil and the remaining publicly traded shares of Standard Oil of Ohio. At the same year it was listed on the Tokyo Stock Exchange where its share were traded until delisting in 2008.

Walters was replaced by Robert Horton in 1990. Horton carried out a major corporate downsizing exercise, removing various tiers of management at the head office. In 1992, British Petroleum sold off its 57% stake in BP Canada (upstream operations), which was renamed as Talisman Energy. John Browne, who had joined BP in 1966 and rose through the ranks to join the board as managing director in 1991, was appointed group chief executive in 1995.

In 1981, British Petroleum entered into the solar technology sector by acquiring 50% of Lucas Energy Systems, a company which became Lucas BP Solar Systems, and later BP Solar. The company was a manufacturer and installer of photovoltaic solar cells

HOME


Content is Copyleft
Website design, code, and AI is Copyrighted (c) 2014-2017 by Stephen Payne


Consider donating to Wikimedia



As an Amazon Associate I earn from qualifying purchases