From Wikipedia, the free encyclopedia
BP plc (formerly
The British Petroleum Company plc,
British Petroleum and
BP Amoco plc) is a British
multinational oil and
gas company headquartered in
London,
England. It is one of the world's seven oil and gas "
supermajors", whose performance in 2012 made it the world's sixth-largest oil and gas company, the sixth-largest energy company by
market capitalization and the
company with the world's 12th-largest revenue (turnover). It is a
vertically integrated company operating in all areas of the oil and gas industry, including
exploration and
production,
refining,
distribution and marketing,
petrochemicals,
power generation and
trading. It also has
renewable energy interests in
biofuels and
wind power.
As of 31 December 2017, BP had operations in 70 countries worldwide, produced around 3.6 million barrels per day (570,000 m
3/d) of
oil equivalent, and had total proved reserves of 18.441 billion barrels (2.9319
×10
9 m
3) of oil equivalent. The company has around 18,300 service stations worldwide. Its largest division is BP America in the United States. In Russia, BP owns a 19.75% stake in
Rosneft, the world's largest publicly traded oil and gas company by hydrocarbon reserves and production. BP has a primary listing on the
London Stock Exchange and is a constituent of the
FTSE 100 Index. It has secondary listings on the
Frankfurt Stock Exchange and the
New York Stock Exchange.
BP's origins date back to the founding of the
Anglo-Persian Oil Company in 1908, 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
British Petroleum. In 1959, the company expanded beyond the Middle East to Alaska and it was one of the first companies to strike oil in the
North Sea. British Petroleum acquired majority control of
Standard Oil of Ohio
in 1978. Formerly majority state-owned, the British government
privatized 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, becoming
BP plc in 2001. From 2003 to 2013, BP was a partner in the
TNK-BP joint venture in Russia.
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 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.
The 2010
Deepwater Horizon oil spill,
the largest accidental release of oil into marine waters in history,
resulted in severe environmental, health and economic consequences, and serious legal and public relations repercussions for BP. 1.8 million US gallons (43,000 bbl; 6,800 m
3) of
Corexit oil dispersant were used in the cleanup response, becoming the largest application of such chemicals in US history.
The company pleaded guilty to 11 counts of felony manslaughter, two
misdemeanors, one felony count of lying to Congress, and agreed to pay
more than $4.5 billion in fines and penalties, the largest criminal
resolution in US history.
On 2 July 2015, BP and five states announced an $18.7 billion
settlement to be used for Clean Water Act penalties and various claims.
History
1909 to 1954
A BP Motor Spirit advertisement from 1922
In May 1908 a group of British geologists discovered a large amount of oil at
Masjid-i-Suleiman in Mohammerah, today located in the province of
Khuzestan. It was the first commercially significant find of oil in the
Middle East.
William Knox D'Arcy, by contract with the Emir of Mohammerah,
Sheikh Khaz'al Khan al-Kaabi, 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 Khaz'al 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 1913, the British government acquired a controlling interest (50.0025%) in the company and at the suggestion of
Winston Churchill, the British navy switched from coal to oil. In 1914, APOC 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 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.
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. 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).
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 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.
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 favor. 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
nationalized 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 organized 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. 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 32 million US gallons (760,000 bbl; 120,000 m
3) 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.
The company's oil assets were nationalized 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, 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 nationalized all of the company's assets in Iran without compensation, bringing to an end its 70-year presence in Iran. As a result, BP lost 40% of its global crude oil supplies.
1979 to 1997
The
final version of the BP shield logo, introduced in 1989 and used until
2000; the shield logo was originally designed by AR Saunders in 1920
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%. After the worldwide stock market crash on 19 October 1987, Prime Minister
Margaret Thatcher
initiated the sale of an additional GBP 7.5 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 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 to
Chevron Corporation; and 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 down-sizing 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. It became wholly owned by British Petroleum in the mid-1980s.
British Petroleum entered into Russian market in 1990 and opened
its first service station in Moscow in 1996. In 1997, it acquired 10%
stake in Russian oil company
Sidanco, which later became a part of TNK-BP.
1998 to 2009
Under
John Browne, British Petroleum acquired other oil companies,
transforming BP into the third largest oil company in the world. British
Petroleum merged with
Amoco (formerly Standard Oil of Indiana) in December 1998, becoming BP Amoco plc. Most Amoco stations in the United States were converted to BP's brand and corporate identity. In 2000, BP Amoco acquired
Arco (Atlantic Richfield Co.) and
Burmah Castrol. As part of the merger's brand awareness, the company helped the
Tate Modern gallery of British Art launch
RePresenting Britain 1500–2000. In 2001, in response to negative press on British Petroleum's poor safety standards, the company adopted a green
sunburst logo and rebranded itself as BP ("Beyond Petroleum") plc.
Steven Koonin, BP's then-Chief Scientist, speaking in the company boardroom in 2005 (top right of picture)
In the beginning of the 2000s, BP became the leading partner (and later operator) of the
Baku–Tbilisi–Ceyhan pipeline project which opened a new oil transportation route from the Caspian region. In 2002, BP acquired the majority of Veba Öl AG, a subsidiary of
VEBA AG, and subsequently rebranded its existing stations in Germany to the Aral name. As part of the deal, BP acquired also the Veba Öl's stake in Ruhr Öl joint venture. Ruhr Öl was dissolved in 2016.
On 1 September 2003, BP and a group of Russian billionaires, known as AAR (
Alfa-
Access-
Renova),
announced the creation of a strategic partnership to jointly hold their
oil assets in Russia and Ukraine. As a result, TNK-ВР was created.
On 23 March 2005, 15 workers were killed and more than 170 injured in the
Texas City Refinery explosion. To save money, major upgrades to the 1934 refinery had been postponed. Browne pledged to prevent another catastrophe. Three months later, '
Thunder Horse PDQ',
BP's giant new production platform in the Gulf of Mexico, nearly sank
during a hurricane. In their rush to finish the $1 billion platform,
workers had installed a valve backwards, allowing the ballast tanks to
flood. Inspections revealed other shoddy work. Repairs costing hundreds
of millions would keep Thunder Horse out of commission for three years.
Lord Browne resigned from BP on 1 May 2007. The head of exploration and production
Tony Hayward.
became the new chief executive. In 2009, Hayward shifted emphasis from
Lord Browne's focus on alternative energy, announcing that safety would
henceforth be the company's "number one priority".
In 2007, BP formed with
AB Sugar and
DuPont a joint venture Vivergo Fuels which opened a bioethanol plant in
Saltend near
Hull, United Kingdom in December 2012. Together with DuPont, BP formed a
biobutanol joint venture Butamax by acquiring biobutan technology company Biobutanol LLC in 2009.
In 2009, BP obtained a production contract during the
2009/2010 Iraqi oil services contracts tender to develop the
Rumaila field with joint venture partner
CNPC, which contain an estimated 17 billion barrels (2.7
×10
9 m
3) of oil, accounting for 12% of Iraq's oil reserves estimated at 143.1 billion barrels (22.75
×109 m
3). In June 2010, the BP/CNPC consortium took over development of the field, which was the epicenter of the 1990
Gulf war.
2010 to present
President Barack Obama meeting with BP executives at the White House in June 2010 to discuss the oil spill in the Gulf of Mexico
A modern BP filling station on the Kapiti Coast, New Zealand with Wild Bean Cafe and BP Connect, shop built in late 2015
On 1 October 2010,
Bob Dudley replaced
Tony Hayward as the company's CEO after the Deepwater Horizon oil spill.
After the oil spill BP announced a divestment program to sell about $38
billion worth of non-core assets by 2013 to compensate its liabilities
related to the accident. In July 2010, it sold its natural gas activities in
Alberta and
British Columbia, Canada, to
Apache Corporation.
It sold its stake in the Petroperijá and Boquerón fields in Venezuela
and in the Lan Tay and Lan Do fields, the Nam Con Son pipeline and
terminal, and the
Phu My 3 power plant in Vietnam to TNK-BP,
forecourts and supply businesses in Namibia, Botswana, Zambia, Tanzania and Malawi to
Puma Energy, the
Wytch Farm onshore oilfield in
Dorset and a package of North Sea gas assets to
Perenco, natural-gas liquids business in Canada to
Plains All American Pipeline LP, natural gas assets in Kansas to
Linn Energy, Carson Refinery in
Southern California and its ARCO retail network to
Tesoro, Sunray and Hemphill gas processing plants in
Texas, together with their associated gas gathering system, to Eagle Rock Energy Partners, the Texas City Refinery and associated assets to
Marathon Petroleum, the
Gulf of Mexico
located Marlin, Dorado, King, Horn Mountain, and Holstein fields as
also its stake in non-operated Diana Hoover and Ram Powell fields to
Plains Exploration & Production, non-operating stake in the
Draugen oil field to
Norske Shell, and the UK's liquefied petroleum gas distribution business to DCC.
In February 2011, BP formed a partnership with
Reliance Industries, taking a 30% stake in a new Indian joint-venture for an initial payment of $7.2 billion. In September 2012, BP sold its subsidiary BP Chemicals (Malaysia) Sdn. Bhd., an operator of the Kuantan
purified terephthalic acid (PTA) plant in Malaysia, to Reliance Industries for $230 million. In October 2012, BP sold its stake in TNK-BP to Rosneft for $12.3 billion in cash and 18.5% of Rosneft's stock. The deal was completed on 21 March 2013. In 2012, BP acquired an acreage in the
Utica Shale but these developments plans were cancelled in 2014.
In 2011–2015, BP cut down its alternative energy business. The
company announced its departure from the solar energy market in December
2011 by closing its solar power business, BP Solar. In 2012, BP shut down the
BP Biofuels Highlands project which was developed since 2008 to make
cellulosic ethanol from emerging energy crops like
switchgrass and from
biomass. In 2015, BP decided to exit from other
lignocellulosic ethanol businesses. It sold its stake in Vivergo to
Associated British Foods. BP and DuPont also mothballed their joint biobutanol pilot plant in Saltend.
In April 2017, the company reached an agreement to sell its
Forties pipeline system in the North Sea to
Ineos for $250 million. The sale included terminals at
Dalmeny and Kinneil, a site in Aberdeen, and the Forties Unity Platform.
In 2017, the company floated its subsidiary BP Midstream Partners LP, a
pipeline operator in the United States, at the New York Stock Exchange.
In Argentina, BP and
Bridas Corporation agreed to merge their interests in Pan American Energy and Axion Energy to form a jointly owned Pan American Energy Group.
In 2017, BP announced a planned investment of $200 million to acquire a 43% stake in the solar energy developer
Lightsource Renewable Energy, a company which will be renamed Lightsource BP.
In March 2017, the company acquired Clean Energy's biomethane business
and assets, including its production sites and existing supply
contracts. In April 2017, its subsidiary Butamax bought an
isobutanol production company Nesika Energy.
In July 2018, the company agreed to purchase its shale assets from Australian mining and petroleum conglomerate
BHP for $10.5 billion.
In January 2019, BP discovered 1 billion barrels of oil at its
Thunder Horse location in the Gulf of Mexico. The company also announced
plans to spend $1.3 billion on a third phase of its Atlantis field near
New Orleans.
Operations
BP has operations in approximately 70 countries worldwide with the global headquarters in London, United Kingdom. BP operations are organized into two main business segments,
Upstream and
Downstream.
Since 1951, BP has annually published its
Statistical Review of World Energy, which is considered an energy industry benchmark.
Operations by location
United Kingdom
The BP chemicals plant in Saltend near Hull, United Kingdom
BP operates more than 40 offshore oil and gas fields, four
onshore terminals and a pipeline network that transports around 50%t of
the oil and gas produced in the UK, according to the company.
BP has invested more than £35 billion in the North Sea since the 1960s,
and in 2012 announced its plans to invest another £10 billion until
2017. The company announced that it is focusing its investment in the
UK North Sea into four development projects including the
Clair, Devenick,
Schiehallion and Loyal, and Kinnoull oilfields. BP is the operator of the Clair oilfield, which has been appraised as the largest hydrocarbon resource in the UK.
In Saltend near Hull, BP operates a petrochemicals plant that produces
acetic acid and
acetic anhydride used in the production of pharmaceuticals, textiles and other chemical products.
There are 1,200 BP service stations in the UK.
United States
The United States operations comprise nearly one-third of BP's worldwide business interests, and the United States is the country with the greatest concentration of its employees and investments. BP employs approximately 14,000 people in the United States. In 2017, BP's total production in the United States included 370,000 barrels per day (59,000 m3/d) of oil and 1.659 billion cubic feet per day (47.0 million cubic meters per day) of natural gas and its refinery throughput was 713,000 barrels per day (113,400 m3/d).
BP's major subsidiary in the United States is BP America, Inc. based in
Houston, Texas, which is the parent company for the BP's operations in the country.
BP Exploration & Production Inc., a 1996 established Houston-based
subsidiary, is dealing with oil exploration and production, including
Gulf of Mexico activities.
BP Corporation North America, Inc., provides petroleum refining
services as also transportation fuel, heat and light energy, and
petrochemical products.
BP Products North America, Inc., a 1954 established Houston-based
subsidiary, is engaged in the exploration, development, production,
refining, and marketing of oil and natural gas. BP America Production Company, a
New Mexico-based subsidiary, engages in oil and gas exploration and development.
BP Energy Company, a Houston-based subsidiary, is a provider of natural
gas, power, and risk management services to the industrial and utility
sectors and a retail electric provider in Texas.
BP's upstream activities are divided into three business areas
which are deepwater Gulf of Mexico, the Lower 48 states, and Alaska. BP
is a leading acreage holder and producer of oil and natural gas in the
deepwater
Gulf of Mexico. As of 2017 the company produces about 300,000 barrels per day (48,000 m
3/d) of oil equivalent in the Gulf of Mexico. BP operates the
Atlantis,
Mad Dog, Na Kika, and
Thunder Horse production platforms while holding interest in hubs operated by other companies.
As of 2016, the company operated nine North Slope oilfields in the Greater Prudhoe Bay area, producing 107,900 barrels per day (17,150 m
3/d). BP is the largest partner with just under 50% ownership stake in the 800-mile (1,300 km) long
Trans-Alaska Pipeline System.
In 2014, BP moved its onshore unit in the United States to a new
business called U.S. Lower 48 Onshore to compete in the burgeoning shale
gas industry dominated by smaller companies. It has a 7.5 billion barrels (1.19 billion cubic meters) material resource base on 5.7 million acres (23,000 km
2). It has
shale positions in the
Woodford, Oklahoma,
Fayetteville, Arkansas,
Haynesville, Texas, and
Eagle Ford, Texas shale. It has
unconventional gas (
shale gas or
tight gas) stakes also in Colorado,
New Mexico and Wyoming, primarily in the
San Juan Basin.
The company owns two petrochemical plants in the U.S.
Its petrochemical plant in Texas City, located on the same site as the
formerly owned Texas City Refinery, produces industrial chemicals
including
propylene and
styrene. BP's Cooper River,
South Carolina petrochemical plant produces PTA, which is used in the production of
synthetic fiber for clothing, packaging and
optical films.
As of May 2017, BP operated 13
wind farms in seven states in the U.S., and held an interest in another in
Hawaii. In 2016, the company generated 4.389
TW·h of wind power.
Other locations
In Egypt, BP produces approximately 15% of the country's total oil production and 40% of its domestic gas. The company also has offshore gas developments in the East Nile Delta Mediterranean, and in the West Nile Delta, where the company has a joint investment of US$9 billion with
RWE to develop two offshore gas fields.
BP is active in offshore oil development in Angola, where it
holds an interest in a total of nine oil exploration and production
blocks covering more than 30,000 square kilometers (12,000 sq mi). This
includes four blocks it acquired in December 2011 and an additional
block that is operated by Brazilian national oil company,
Petrobras, in which it holds a 40% stake.
BP has a stake in exploration of two blocks of offshore deep water assets in the South China Sea.
In India, BP owns a 30% share of oil and gas assets operated by
Reliance Industries,
including exploration and production rights in more than 20 offshore
oil and gas blocks, representing an investment of more than US$7 billion
into oil and gas exploration in the country.
BP has major liquefied natural gas activities in Indonesia, where it operates the
Tangguh LNG project, which began production in 2009 and has a capacity of 7.6 million tonnes of liquid natural gas per year. Also in that country, the company has invested in the exploration and development of
coalbed methane.
BP operates the
Kwinana refinery in
Western Australia, which can process up to 146,000 barrels per day (23,200 m
3/d) of crude oil and is the country's largest refinery, supplying fuel to 80%t of Western Australia. BP is a non-operating joint venture partner in the
North West Shelf, which produces LNG, pipeline gas, condensate and oil.
The NWS venture is Australia's largest resource development and
accounts for around one third of Australia's oil and gas production.
A GDH (subsidiary of BP) oil depot, Frontigan, Hérault, France.
BP's refining operations in continental Europe include Europe's
second-largest oil refinery, located in Rotterdam, the Netherlands,
which can process up to 377,000 barrels (59,900 m3) of crude oil per day.
In addition to its offshore operations in the British zone of
North Sea, BP has interests in the Norwegian section of the sea through
its stake in Aker BP. As of December 2017, BP holds a 19.75% stake in Russia's state-controlled oil company Rosneft.
BP's Canadian operations are headquartered in
Calgary and the company operates primarily in
Alberta, the
Northwest Territories, and
Nova Scotia. It purchases crude oil for the company's refineries in the
United States, has
oil sands holdings in
Alberta and four offshore blocks in
Nova Scotia. The company's
Canadian oil sands leases include joint ventures with
Husky Energy in the Sunrise Energy Project (50%), and
Devon Energy in Pike,
and a partnership with Value Creation Inc. in the development of the
Terre de Grace oil sands lease. The BP's investment in the Sunrise
Project is £1.6 billion and it is expected to start production in 2014. In May 2017, it was reported that BP is considering to sell-off its oil sands assets.
In Brazil, BP holds stakes in offshore oil and gas exploration in the Barreirinhas, Ceará and
Campos basins, in addition to onshore processing facilities. BP also operates biofuel production facilities in Brazil, including three cane sugar mills for ethanol production.
Exploration and production
BP upstream's activities include exploring for new oil and natural
gas resources, developing access to such resources, and producing,
transporting, storing and processing oil and natural gas. The activities in this area of operations take place in 29 countries worldwide. In 2017, BP produced around 3.6 million barrels per day (570×103 m3/d) of oil equivalent, of which 2.26 million barrels per day (359×103 m3/d) were liquids and 7.744 billion cubic feet (219.3 million cubic meters) was natural gas, and had total proved reserves of 18.441 million barrels per day (2.9319×106 m3/d) of oil equivalent, of which liquids accounted 10.672 million barrels per day (1.6967×106 m3/d) and natural gas 45.06 trillion cubic feet (1.276 trillion cubic meters)
In addition to the conventional oil exploration and production, BP has a
stake in the three oil sands projects in Canada although it is
considering to sell its oil sands assets.
Refining and marketing
An Aral service station in Weiterstadt, Germany
BP downstream's activities include the refining, marketing, manufacturing, transportation, trading and supply of
crude oil, petrochemicals and
petroleum products.
Downstream is responsible for BP's fuels, lubricants and petrochemical
businesses and has major operations located in Europe, North America and
Asia.
As of December 2016 BP owned or had a share in 11 refineries and 17 petrochemical manufacturing plants worldwide. The Company had sold or converted 16 plants since 2000. It is looking to sell off its stake in a petrochemicals joint venture in China, its largest investment in that country. The company's petrochemicals plants produce products including PTA, paraxylene, and acetic acid. Its petrochemicals are marketed in over 40 countries.
BP, which employs about 1,800 people in oil trading and trades over 5 million barrels per day (790
×103 m
3/d) of oil and refined products, is the world's third biggest oil trader after
Royal Dutch Shell and
Vitol. The operation is estimated to be able to generate over $1 billion trading profits in a good year.
Air BP is the aviation division of BP, providing
aviation fuel, lubricants & services. It has operations in over 50 countries worldwide.
BP Shipping provides the logistics to move BP's oil and gas cargoes to market, as well as marine structural assurance.
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.
BP markets
petroleum products in more than 50 countries worldwide. It has around 18,300 service stations. Its flagship retail brand is BP Connect, a chain of service stations combined with a convenience store, although in the US it is gradually being transitioned to the
ampm format. In Germany and Luxembourg, BP operates service stations under the
Aral brand.
On the US West Coast, in the states of California, Oregon, Washington,
Nevada, Idaho, Arizona, and Utah, BP primarily operates service
stations under the ARCO brand.
In Australia BP operates a number of BP Travel Centres, large-scale
destination sites located which, in addition to the usual facilities in a
BP Connect site, also feature food-retail tenants such as
McDonald's,
KFC and
Nando's and facilities for long-haul truck drivers.
As of 2017, BP owned or had a share in 11 refineries and 15 petrochemical manufacturing plants worldwide.
Alternative and low carbon energy
A BP photovoltaic (PV) module that is composed of multiple PV cells. Two or more interconnected PV modules create an array.
BP was the first of
supermajors expanding its focus on energy sources other than fossil fuels. It established an
alternative
and low carbon energy business in 2005, with plans to invest $8 billion
over a 10-year period into renewable energy sources including solar,
wind, and
biofuels, and non-renewable sources including
natural gas and
hydrogen power. According to the company, it spent a total of $8.3 billion in these projects through completion in 2013.
In Brazil, BP owns two ethanol producers—
Companhia Nacional de Açúcar e Álcool and
Tropical BioEnergia—with three ethanol mills. These mills produce around 800,000 cubic meters per annum (5,000,000 bbl/a) of ethanol equivalent.
BP has invested in an agricultural biotechnology company Chromatin, a
company developing crops that can grow on marginal land and that are
optimized to be used as feedstock for biofuel, and Vedrezyne, which produces petrochemicals in
yeast. Its joint venture with DuPont called Butamax, which has developed the patented bio-butanol-producing technology and owns an isobutanol plant in
Scandia, Kansas, United States. In addition BP owns biomethane production facilities in
Canton, Michigan and North Shelby, Tennessee as well as share of facilities under construction in
Oklahoma City and
Atlanta. BP's subsidiary Air BP supplies aviation biofuel at
Oslo,
Halmstad, and
Bergen airports.
Six years after closing down BP Solar, BP announced its return to
the solar sector with an investment of $200 million to Lightsource
Renewable Energy (Lightsource BP). Differently from BP Solar,
Lightsource BP focuses on the managing and maintaining
solar farms instead of manufacturing solar panels. As of 2017,
Lightsource has commissioned 1.3 GW of solar capacity and manages about
2 GW of solar capacity. It plans to increase the capacity up to 8 GW
through projects in the United States, India, Europe and the Middle
East.
BP has invested $20 million in Israeli quick-charging battery firm StoreDot Ltd.
In 2018, the CEO Bob Dudley said that out of the company's total
spending of $15 to $17 billion per year, about $500 million will be
invested in low-carbon energy and technology. The relatively small size of BP's alternative energy operations has led to allegations of
greenwashing by
Greenpeace,
Mother Jones and energy analyst and activist
Antonia Juhasz, among others.
Corporate affairs
Stock
BP stock is composed of original BP shares as well as shares acquired through mergers with
Amoco in 1998 and the
Atlantic Richfield Company (ARCO) in 2000.
The company's shares are primarily traded on the London Stock
Exchange, but also listed on the Frankfurt Stock Exchange in Germany. In
the United States shares are traded in US$ on the New York Stock
Exchange in the form of
American depository shares (ADS). One ADS represents six ordinary shares.
Following the United States
Federal Trade Commission's approval of the BP-Amoco merger in 1998, Amoco's stock was removed from
Standard & Poor's 500 and was merged with BP shares on the
London Stock Exchange. The merger with Amoco resulted in a 40% increase in share price by April 1999.
However, shares fell nearly 25% by early 2000, when the Federal Trade
Commission expressed opposition to BP-Amoco's acquisition of ARCO. The acquisition was ultimately approved in April 2000 increasing stock value 57 cents over the previous year.
After the Texas City Refinery explosion in 2005, stock prices
again fell. By January 2007, the explosion, coupled with a pipeline
spill in Alaska and production delays in the Gulf of Mexico, left BP's
stock down 4.5% from its position prior to the Texas City explosion. However, by April 2007, stocks had rebounded 13% erasing the 8.3% loss from 2006. Declining oil prices and concerns over oil sustainability also caused shares to fall in value in late 2008.
The Deepwater Horizon oil spill in April 2010 initiated a sharp
decline in share prices, and BP's shares lost roughly 50% of their value
in 50 days. BP's shares reached a low of $26.97 per share on 25 June 2010 totaling a $100 billion loss in market value before beginning to climb again. Shares reached a post-spill high of $49.50 in early 2011.
On 22 March 2013, BP announced an $8 billion
share repurchase.
The buyback decision followed closure of the TNK-BP deal and it has to
offset the dilution to earnings per share following the loss of
dividends from TNK-BP. The buyback was also seen as a way to invest excess cash from the TNK-BP deal.
Branding and public relations
In
the first quarter of 2001 the company adopted the marketing name of BP,
and replaced its "Green Shield" logo with the "Helios" symbol, a green
and yellow sunflower logo named after the
Greek sun god
and designed to represent energy in its many forms. BP introduced a new
corporate slogan – "Beyond Petroleum" along with a $200M advertising
and marketing campaign.
According to the company, the new slogan represented their focus on
meeting the growing demand for fossil fuels, manufacturing and
delivering more advanced products, and to enable transitioning to a
lower carbon footprint.
By 2008, BP's branding campaign had succeeded with the culmination of a 2007
Effie Award from by the
American Marketing Association, and consumers had the impression that BP was one of the greenest petroleum companies in the world.
BP was criticized by environmentalists and marketing experts, who
stated that the company's alternative energy activities were only a
fraction of the company's business at the time. According to
Democracy Now, BP's marketing campaign amounted to a deceptive
greenwashing public-relations
spin campaign
given that BP's 2008 budget included more than $20 billion for fossil
fuel investment and less than $1.5 billion for all alternative forms of
energy. Oil and energy analyst
Antonia Juhasz
notes BP's investment in green technologies peaked at 4% of its
exploratory budget prior to cutbacks, including the discontinuation of
BP Solar and the closure of its alternative energy headquarters in
London.
According to Juhasz, "four percent...hardly qualifies the company to
be Beyond Petroleum", citing BP's "aggressive modes of production,
whether it's the tar sands [or] offshore".
BP attained a negative public image from the series of industrial
accidents that occurred through the 2000s, and its public image was
severely damaged after the Deepwater Horizon explosion and Gulf Oil
spill. In the immediate aftermath of the spill,
BP initially downplayed the severity of the incident, and made many of the same PR errors that Exxon had made after the
Exxon Valdez disaster.
CEO Tony Hayward was criticized for his statements and had committed
several gaffes, including stating that he "wanted his life back."
Some in the media commended BP for some of its social media efforts,
such as the use of Twitter and Facebook as well as a section of the
company's website where it communicated its efforts to clean up the
spill.
BP began a re-branding campaign in late 2010, and decided to
focus its brand on the idea of "bringing brilliant minds together with
technology at a massive scale to meet the world's energy needs", and
focus its messaging on telling stories about people. In February 2012 BP North America launched a $500 million branding campaign to rebuild its brand.
The company's advertising budget was about $5 million per week
during the four-month spill in the Gulf of Mexico, totaling nearly $100
million.
In May 2012, BP tasked a press office staff member to openly join
discussions on the Wikipedia article's talk page and suggest content to
be posted by other editors. Controversy emerged in 2013 over the amount of content from BP that had entered this article. Wikipedia co-founder
Jimmy Wales
stated that, by identifying himself as a BP staff member, the
contributor in question had complied with site policy regarding
conflicts of interest.
LGBTQ recognition
In
2014, BP backed a global study researching challenges for lesbian, gay,
bisexual and transgender employees and for ways that companies can be a
"force for change" for LGBT workers around the world. In 2015,
Reuters wrote that BP is "known for their more liberal policies for gay and transgender workers". A 2016 article in the
Houston Chronicle
said BP was "among the first major companies in the United States to
offer LGBT workers equal protection and benefits roughly 20 years ago". BP scored a 100 percent on the 2018 Human Rights Campaign's Corporate Equality Index, which was released in 2017. Also in 2017, BP added gender reassignment surgery to its list of benefits for U.S. employees.
According to the Human Rights Campaign, BP is one of only a few oil and
gas companies offering transgender benefits to its employees.
BP ranked No. 51 on the list of Top 100 employers for lesbian, gay,
bisexual and transgender staff on the 2017 Stonewall Workplace Equality
Index.
Also in 2017, John Mingé, chairman and president of BP America, signed a
letter alongside other Houston oil executives denouncing the proposed
"bathroom bill" in Texas.
Environmental record
Indigenous rights
BP
has been ranked as among the 15th best of 92 oil, gas, and mining
companies on indigenous rights and resource extraction in the Arctic.
Position on global warming
In 2018, BP was the largest contributor to the campaign opposing carbon fee initiative 1631 in Washington State.
BP also funded a campaign against a prior carbon fee initiative, I-732,
as a member of the American Fuel & Petrochemical Manufacturers.
Robert Allendorfer, manager of BP's Cherry Point refinery, wrote the
following in a letter to state lawmakers: "[Initiative 1631] would
exempt six of the ten largest stationary source emitters in the state,
including a coal-fired power plant, an aluminum smelter, and a number of
pulp and paper plants." While I-1631 exempts certain industries as Allendorfer states, I-732 did not. 20 years ago, BP was distinguished as the first multinational outside of the reinsurance industry to publicly support the
scientific consensus on climate change, which
Pew Center on Global Climate Change president Eileen Caussen then described as a transformative moment on the issue.
Hazardous substance dumping 1993–1995
In
September 1999, one of BP's US subsidiaries, BP Exploration Alaska
(BPXA), pleaded guilty to criminal charges stemming from its illegally
dumping of hazardous wastes on the
Alaska North Slope,
paying fines and penalties totaling $22 million. BP paid the maximum
$500,000 in criminal fines, $6.5 million in civil penalties, and
established 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.
Air pollution violations
In 2000, BP Amoco acquired ARCO, a Los Angeles-based oil group.
In 2003, California's
South Coast Air Quality Management District
(AQMD) filed a complaint against BP/ARCO, seeking $319 million in
penalties for thousands of air pollution violations over an 8-year
period.
In January 2005, the agency filed a second suit against BP based on
violations between August 2002 and October 2004. The suit alleged that
BP illegally released air pollutants by failing to adequately inspect,
maintain, repair and properly operate thousands of pieces of equipment
across the refinery as required by AQMD regulations. It was alleged
that in some cases the violations were due to negligence, while in
others the violations were knowingly and willfully committed by refinery
officials.
In 2005, a settlement was reached under which BP agreed to pay $25
million in cash penalties and $6 million in past emissions fees, while
spending $20 million on environmental improvements at the refinery and
$30 million on community programs focused on asthma diagnosis and
treatment.
In 2013, a total of 474
Galveston County
residents living near the BP Texas City Refinery filed a $1 billion
lawsuit against BP, accusing the company of "intentionally misleading
the public about the seriousness" of a two-week release of toxic fumes
which began on 10 November 2011. "BP reportedly released Sulfur Dioxide,
Methyl Carpaptan, Dimethyl Disulfide and other toxic chemicals into the
atmosphere" reads the report. The lawsuit further claims Galveston
county has the worst air quality in the United States due to BP's
violations of air pollution laws. BP had no comment and said it would
address the suit in the court system.
Colombian farmland damages claim
In 2006, a group of
Colombian farmers reached a multimillion-dollar out-of-court settlement with BP for alleged environmental damage caused by the
Ocensa pipeline.
An agreed statement said: "The Colombian farmers group are pleased to
say that after a mediation process which took place in Bogotá in June
2006 at the joint initiative of the parties, an amicable settlement of
the dispute in relation to the Ocensa pipeline has been reached, with no
admissions of liability." The company was accused of benefiting from a
regime of terror carried out by Colombian government paramilitaries to
protect the 450-mile (720 km) Ocensa pipeline; BP said throughout that
it has acted responsibly and that landowners were fairly compensated.
In 2009, another group of 95 Colombian farmers filed a suit
against BP, saying the company's Ocensa pipeline caused landslides and
damage to soil and groundwater, affecting crops, livestock, and
contaminating water supplies, making fish ponds unsustainable. Most of
the land traversed by the pipeline was owned by peasant farmers who were
illiterate and unable to read the environmental impact assessment
conducted by BP prior to construction, which acknowledged significant
and widespread risks of damage to the land.
Canadian oil sands
In Canada, BP is involved in the extraction of oil sands, also known as tar sands or bituminous sands. The company uses
in-situ drilling technologies such as
Steam Assisted Gravity Drainage to extract the
bitumen. Members of US and Canadian oil companies say that using recycled
groundwater makes in situ drilling an
environmentally friendlier option when compared with oil sands mining.
Members of Canada's
First Nations have criticized BP's involvement in the Canadian project for the impacts tar sands extraction has on the environment. NASA scientist
James Hansen said that the exploitation of Canadian tar sands would mean "game over for the climate". In 2010, activist shareholders asked BP for a full investigation of the project, but were defeated. In 2013, shareholders criticized the project for being carbon-intensive.
Violations and accidents
Citing conditions similar to those that resulted in the 2005
Texas City Refinery explosion, on 25 April 2006, the U.S. Department of Labor's
Occupational Safety and Health Administration (OSHA) fined BP more than $2.4 million for unsafe operations at the company's
Oregon, Ohio
refinery. An OSHA inspection resulted in 32 per-instance willful
citations including locating people in vulnerable buildings among the
processing units, failing to correct depressurization deficiencies and
deficiencies with gas monitors, and failing to prevent the use of
non-approved electrical equipment in locations in which hazardous
concentrations of flammable gases or vapors may exist. BP was further
fined for neglecting to develop shutdown procedures and designate
responsibilities and to establish a system to promptly address and
resolve recommendations made after an incident when a large feed pump
failed three years prior to 2006. Penalties were also issued for five
serious violations, including failure to develop operating procedures
for a unit that removes sulfur compound; failure to ensure that
operating procedures reflect current operating practice in the
Isocracker Unit; failure to resolve process hazard analysis
recommendations; failure to resolve process safety management compliance
audit items in a timely manner; and failure to periodically inspect
pressure piping systems.
In 2008, BP and several other major oil refiners agreed to pay
$422 million to settle a class-action lawsuit stemming from water
contamination tied to the gasoline additive
MTBE,
a chemical that was once a key gasoline ingredient. Leaked from
storage tanks, MTBE has been found in several water systems across the
United States. The plaintiffs maintain that the industry knew about the
environmental dangers but that they used it instead of other possible
alternatives because it was less expensive. The companies will also be
required to pay 70 percent of cleanup costs for any wells newly affected
at any time over the next 30 years.
BP has one of the worst safety records of any major oil company
that operates in the United States. Between 2007 and 2010, BP refineries
in Ohio and Texas accounted for 97 percent of "egregious, willful"
violations handed out by the U.S. Occupational Safety and Health
Administration (OSHA). BP had 760 "egregious, willful" violations during
that period, while Sunoco and Conoco-Phillips each had eight, Citgo two
and Exxon had one.
The 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."
A report in
ProPublica, published in the
Washington Post
in 2010, found that over a decade of internal investigations of BP's
Alaska operations during the 2000s warned senior BP managers that the
company repeatedly disregarded safety and environmental rules and risked
a serious accident if it did not change its ways. ProPublica found that
"Taken together, these documents portray a company that systemically
ignored its own safety policies across its North American operations --
from Alaska to the Gulf of Mexico to California and Texas. Executives
were not held accountable for the failures, and some were promoted
despite them."
The
Project On Government Oversight,
an independent non-profit organization in the United States which
investigates and seeks to expose corruption and other misconduct, lists
BP as number one on their listing of the 100 worst corporations based on
instances of misconduct.
1965 Sea Gem offshore oil rig disaster
In December 1965, Britain's first oil rig, Sea Gem, capsized when two
of the legs collapsed during an operation to move it to a new location.
The oil rig had been hastily converted in an effort to quickly start
drilling operations after the
North Sea was opened for exploration. Thirteen crew members were killed. No hydrocarbons were released in the accident.
Texas City Refinery explosion and leaks
The former
Amoco oil refinery at
Texas City, Texas was beset by environmental issues, including chemical leaks and a 2005 explosion that killed 15 people and injured hundreds.
Bloomberg News described the incident, which led to a guilty plea by BP to a felony
Clean Air Act charge, as "one of the deadliest U.S. industrial accidents in 20 years." The refinery was sold to
Marathon Petroleum in October 2012.
2005 explosion
Fire-extinguishing operations after the Texas City refinery explosion
In March 2005, the Texas City Refinery, one of the largest refineries
owned then by BP, exploded causing 15 deaths, injuring 180 people and
forcing thousands of nearby residents to remain sheltered in their
homes.
A 20-foot (6.1 m) 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.
The fallout from the accident clouded BP's corporate image
because of the mismanagement at the plant. There had been several
investigations of the disaster, the most recent being that from the
US Chemical Safety and Hazard Investigation Board
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. The company pleaded guilty to a
felony violation of the
Clean Air Act, was fined $50 million, the largest ever assessed under the Clean Air Act, 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 documented in the 2005
explosion. Inspectors found 270 safety violations that had been cited
but not fixed and 439 new violations. BP appealed the fine.
In July 2012, the company agreed to pay $13 million to settle the new
violations. At that time OSHA found "no imminent dangers" at the Texas
plant. Thirty violations remained under discussion.
In March 2012, US Department of Justice officials said the company had
met all of its obligations and subsequently ended the probationary
period.
In November 2011, BP agreed to pay the state of Texas $50 million for
violating state emissions standards at its Texas City refinery during
and after the 2005 explosion at the refinery. The state Attorney General
said BP was responsible for 72 separate pollutant emissions that have
been occurring every few months since March 2005. It was the largest
fine ever imposed under the Texas Clean Air Act.
2007 toxic substance release
In
2007, 143 workers at the Texas City refinery claimed that they were
injured when a toxic substance was released at the plant. In December
2009, after a three-week trial, a federal jury in Galveston awarded ten
of those workers $10 million each in punitive damages, in addition to
smaller damages for medical expenses and pain and suffering. The plant
had a history of chemical releases.
In March 2010, the federal judge hearing the case reduced the jury's
award to less than $500,000. U.S. District Judge Kenneth M. Hoyt said
the plaintiffs failed to prove BP was grossly negligent.
2010 chemical leak
In August 2010, the Texas Attorney General charged BP with illegally emitting harmful air pollutants from its
Texas City
refinery for more than a month.
BP has admitted that malfunctioning equipment lead to the release of
over 530,000 pounds (240,000 kg) of chemicals into the air of Texas City
and surrounding areas from 6 April to 16 May 2010. The leak included
17,000 pounds (7,700 kg) of
benzene, 37,000 pounds (17,000 kg) of
nitrogen oxides, and 186,000 pounds (84,000 kg) of
carbon monoxide.
The State's investigation showed that BP's failure to properly
maintain its equipment caused the malfunction. When the equipment
malfunctioned and caught fire, BP workers shut it down and routed
escaping gases to flares. Rather than shut down associated units while
compressor repairs were made, BP chose to keep operating those other
units, which led to unlawful release of contaminants for almost 40 days.
The Attorney General is seeking civil penalties of no less than $50
nor greater than $25,000 per day of each violation of state air quality
laws, as well as attorneys' fees and investigative costs.
In June 2012, over 50,000 Texas City residents joined a
class-action suit against BP, alleging they became sick in 2010 as a
result of the emissions release from the refinery. BP said the release
harmed no one.
In October 2013, a trial designed as a test for a larger suit that
includes 45,000 people found that BP was negligent in the case, but due
to the lack of substantial evidence linking illness to the emissions,
decided the company would be absolved of any wrongdoing.
Prudhoe Bay
Aerial view of Prudhoe Bay
In March 2006, corrosion of a BP Exploration Alaska (BPXA) oil transit pipeline in
Prudhoe Bay transporting oil to the
Trans-Alaska Pipeline led to a five-day leak and the largest oil spill on
Alaska's North Slope. According to the Alaska Department of Environmental Conservation (ADEC), a total of 212,252 US gallons (5,053.6 bbl; 803.46 m
3) of oil was spilled, covering 2 acres (0.81 ha) of the North Slope.
BP admitted that cost cutting measures had resulted in a lapse in
monitoring and maintenance of the pipeline and the consequent leak. At
the moment of the leak,
pipeline inspection gauges (known as "pigs") had not been run through the pipeline since 1998.
BP completed the clean-up of the spill by May 2006, including removal
of contaminated gravel and vegetation, which was replaced with new
material from the Arctic tundra.
Following the spill, the company was ordered by regulators to
inspect the 35 kilometers (22 mi) of pipelines in Prudhoe Bay using
"smart pigs".
In late July 2006, the "smart pigs" monitoring the pipelines found
16 places where corrosion had thinned pipeline walls. A BP crew sent to
inspect the pipe in early August discovered a leak and small spill, following which, BP announced that the eastern portion of the Alaskan field would be shut down for repairs on the pipeline, with approval from the
Department of Transportation. The shutdown resulted in a reduction of 200,000 barrels per day (32,000 m
3/d) until work began to bring the eastern field to full production on 2 October 2006. In total, 23 barrels (3.7 m
3) of oil were spilled and 176 barrels (28.0 m
3) were "contained and recovered", according to ADEC. The spill was cleaned up and there was no impact upon wildlife.
After the shutdown, BP pledged to replace 26 kilometres (16 mi) of its Alaskan oil transit pipelines and the company completed work on the 16 miles (26 km) of new pipeline by the end of 2008. In November 2007, BP Exploration, Alaska pleaded guilty to negligent discharge of oil, a misdemeanor under the federal
Clean Water Act and was fined US$20 million. There was no charge brought for the smaller spill in August 2006 due to BP's quick response and clean-up.
On 16 October 2007, ADEC officials reported a "toxic spill" from a BP
pipeline in Prudhoe Bay comprising 2,000 US gallons (7,600 l;
1,700 imp gal) of primarily
methanol (methyl alcohol) mixed with crude oil and water, which spilled onto a gravel pad and frozen tundra pond.
In the settlement of a civil suit, in July 2011 investigators
from the U.S. Department of Transportation's Pipeline and Hazardous
Materials Safety Administration determined that the 2006 spills were a
result of BPXA's failure to properly inspect and maintain the pipeline
to prevent corrosion. The government issued a Corrective Action Order to
BP XA that addressed the pipeline's risks and ordered pipeline repair
or replacement. The U.S. Environmental Protection Agency had
investigated the extent of the oil spills and oversaw BPXA's cleanup.
When BP XA did not fully comply with the terms of the corrective action,
a complaint was filed in March 2009 alleging violations of the Clean
Water Act, the Clean Air Act and the Pipeline Safety Act. In July 2011,
the U.S. District Court for the District of Alaska entered a consent
decree between the United States and BPXA resolving the government's
claims. Under the consent decree, BPXA paid a $25 million civil
penalty, the largest per-barrel penalty at that time for an oil spill,
and agreed to take measures to significantly improve inspection and
maintenance of its pipeline infrastructure on the North Slope to reduce
the threat of additional oil spills.
2008 Caspian Sea gas leak
On
17 September 2008, a small gas leak was discovered and one
gas-injection well broached to surface in the area of the Central Azeri
platform at the
Azeri oilfield, a part of the
Azeri–Chirag–Guneshli (ACG) project, in the Azerbaijan sector of
Caspian Sea. The platform was shut down and the staff was evacuated. As the West Azeri Platform was being powered by a cable from the Central Azeri Platform, it was also shut down. Production at the West Azeri Platform resumed on 9 October 2008 and at the Central Azeri Platform in December 2008.
According to leaked US Embassy cables, BP had been "exceptionally
circumspect in disseminating information" and showed that BP thought the
cause for the blowout was a bad cement job. The cables further said
that some of BP's ACG partners complained that the company was so
secretive that it was withholding information even from them.
California storage tanks
Santa
Barbara County District Attorney sued BP West Coast Products LLC, BP
Products North America, Inc., and Atlantic Richfield Company over
allegations that the companies violated state laws regarding operating
and maintaining motor vehicle fuel underground storage tank laws. BP
settled a lawsuit for $14 million. The complaint alleged that BP failed
to properly inspect and maintain underground tanks used to store
gasoline for retail sale at approximately 780 gas stations in California
over a period of ten years and violated other hazardous material and
hazardous waste laws. The case settled in November 2016 and was the
result of collaboration among the California Attorney General's Office
and several district attorney's offices across the state.
Deepwater Horizon explosion and oil spill
Heavy oiling of Bay Jimmy, Plaquemines Parish; 15 September 2010
The
Deepwater Horizon oil spill was a major industrial accident on the
Gulf of Mexico, which killed 11 people and injured 16 others, leaked about 4.9 million barrels (210 million US gal; 780,000 m
3) of oil with plus or minus 10% uncertainty, which makes it the largest accidental marine oil spill in the history of the petroleum industry, and cost to the company more than $65 billion of cleanup costs, charges and penalties. On 20 April 2010, the semi-submersible exploratory offshore drilling rig
Deepwater Horizon located in the
Macondo Prospect in the Gulf of Mexico
exploded after a
blowout.
After burning for two days, the rig sank. The well was finally capped
on 15 July 2010. Of 4.9 million barrels (210 million US gal; 780,000 m
3) of leaked oil 810,000 barrels (34 million US gal; 129,000 m
3) was collected or burned while 4.1 million barrels (170 million US gal; 650,000 m
3) entered the Gulf waters. 1.8 million US gallons (6,800 m
3) of
Corexit dispersant was applied.
The spill had a strong economic impact on the
Gulf Coast's economy sectors such as fishing and tourism. As of 2015, the fishing industry continued to struggle. A 2013 study in the
Journal of Travel Research
found that the hotel industry weathered the spill better than the
vacation rental industry, and that the overall impact was complex and
difficult to determine.
Environmental impact
Oil spill caused damages across a range of species and habitats in the Gulf. Researchers say the oil and dispersant mixture, including
PAHs, permeated the
food chain through
zooplankton. Toxicological effects have been documented in
benthic and
pelagic fish,
estuarine communities, mammals, birds and turtles, deep-water corals, plankton,
foraminifera,
and microbial communities. Effects on different populations consist of
increased mortality or as sub-lethal impairment on the organisms'
ability to forage, reproduce and avoid predators.
In 2013, it was reported that dolphins and other marine life continued
to die in record numbers with infant dolphins dying at six times the
normal rate, and half the
dolphins
examined in a December 2013 study were seriously ill or dying. BP said
the report was "inconclusive as to any causation associated with the
spill."
Studies in 2013 suggested that as much as one-third of the
released oil remains in the gulf. Further research suggested that the
oil on the bottom of the seafloor was not degrading. Oil in affected coastal areas increased erosion due to the death of mangrove trees and marsh grass. As of 2013, removal of oily material from the beaches of Louisiana and Florida continued.
Researchers looking at sediment, seawater, biota, and seafood
found toxic compounds in high concentrations that they said was due to
the added oil and dispersants. Although Gulf fisheries recovered in 2011, a 2014 study of the effects of the oil spill on
bluefin tuna by researchers at
Stanford University and the
National Oceanic and Atmospheric Administration, published in the journal
Science,
found that toxins released by the oil spill sent fish into cardiac
arrest. The study found that even very low concentrations of crude oil
can slow the pace of fish heartbeats. BP disputed the study, which was
conducted as part of the federal Natural Resource Damage Assessment
process required by the Oil Pollution Act. The study also found that oil already broken down by wave action and chemical dispersants was more toxic than fresh oil.
Another peer-reviewed study, released in March 2014 and conducted by 17
scientists from the United States and Australia and published in
Proceedings of the National Academy of Sciences,
found that tuna and amberjack that were exposed to oil from the spill
developed deformities of the heart and other organs. BP responded that
the concentrations of oil in the study were a level rarely seen in the
Gulf, but
The New York Times reported that the BP statement was contradicted by the study.
Effects on human health
Research discussed at a 2013 conference included preliminary results of an ongoing study being done by the
National Institute for Environmental Health Sciences indicating that oil spill cleanup workers carry
biomarkers of chemicals contained in the spilled oil and the dispersants used.
A separate study is following the health issues of women and children
affected by the spill. Several studies found that a "significant
percentage" of Gulf residents reported mental health problems such as
anxiety, depression and
PTSD. According to a
Columbia University
study investigating the health effects among children living less than
10 miles from the coast, more than a third of the parents report
physical or mental health symptoms among their children.
Australia's
60 Minutes reported that people living along the gulf coast were becoming sick from the mixture of Corexit and oil.
Susan Shaw, of the
Deepwater Horizon
oil spill Strategic Sciences Working Group, says "BP told the public
that Corexit was 'as harmless as Dawn dishwashing liquid'...But BP and
the EPA clearly knew about the toxicity of the Corexit long before this
spill." According to Shaw, BP's own safety sheet on Corexit says that
there are "high and immediate human health hazards".
Cleanup workers were not provided safety equipment by the company, and
the safety manuals were "rarely if ever" followed, or distributed to
workers, according to a
Newsweek investigation. The safety manuals read: "Avoid breathing vapor" and "Wear suitable protective clothing." Oil clean up workers reported that they were not allowed to use respirators, and that their jobs were threatened if they did.
A peer-reviewed study published in
The American Journal of Medicine
reported significantly altered blood profiles of individuals exposed to
the spilled oil and dispersants that put them at increased risk of
developing liver cancer, leukemia and other disorders. BP disputed its methodology and said other studies supported its position that dispersants did not create a danger to health.
In 2014, a study was published in
Proceedings of the National Academy of Sciences
which found heart deformities in fish exposed to oil from the spill.
The researchers said that their results probably apply to humans as well
as fish.
Civil and criminal suits
On
15 December 2010, the Department of Justice filed a civil and criminal
suit against BP and other defendants for violations under the
Clean Water Act in the U.S. District Court for the Eastern District of Louisiana.
The case was consolidated with about 200 others, including those
brought by state governments, individuals, and companies under
Multi-District Litigation docket MDL No. 2179, before U.S. District
Judge
Carl Barbier.
In November 2012, BP and the
Department of Justice
reached a $4 billion settlement of all federal criminal charges related
to the explosion and spill. Under the settlement, BP agreed to plead
guilty to 11 felony counts of manslaughter, two misdemeanors, and a
felony count of lying to Congress and agreed to four years of government
monitoring of its safety practices and ethics. BP also paid $525
million to settle civil charges by the Securities and Exchange
Commission that it misled investors about the flow rate of oil from the
well.
At the same time, the US government filed criminal charges against
three BP employees; two site managers were charged with manslaughter and
negligence, and one former vice president with obstruction.
At the end of November 2012, the U.S. Government temporarily banned BP from bidding any new federal contracts. The ban was conditionally lifted in March 2014.
Judge Barbier ruled in the first phase of the case that BP had
committed gross negligence and that "its employees took risks that led
to the largest environmental disaster in U.S. history." He apportioned
fault at 67% for BP, 30% for
Transocean and 3% for
Halliburton. Barbier ruled that BP was "reckless" and had acted with "conscious disregard of known risks."
Claims settlement
In June 2010, after a meeting in the White House between President
Barack Obama and BP executives, the president announced that BP would pay $20 billion into a
trust fund
that will be used to compensate victims of the oil spill. BP also set
aside $100 million to compensate oil workers who lost their jobs because
of the spill.
On 2 March 2012, BP and businesses and residents affected by the
spill reached a settlement of roughly 100,000 suits claiming economic
losses. BP estimated that the settlement cost more than $9.2 billion.
In 2015, BP and five states agreed an $18.5 billion settlement to be used for Clean Water Act penalties and various claims.
Political influence
Lobbying for Libyan prisoner transfer release
BP
lobbied the British government to conclude a prisoner-transfer
agreement which the Libyan government had wanted to secure the release
of
Abdelbaset al-Megrahi, the only person convicted for the 1988
Lockerbie bombing
over Scotland, which killed 270 people. BP stated that it pressed for
the conclusion of prisoner transfer agreement amid fears that delays
would damage its "commercial interests" and disrupt its £900 million
offshore drilling operations in the region, but it said that it had not
been involved in negotiations concerning the release of Megrahi.
Political contributions and lobbying
In February 2002, BP's then-chief executive,
Lord Browne of Madingley, renounced the practice of corporate
campaign contributions,
saying: "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."
When the Washington Post reported in June 2010 that BP North America
"donated at least $4.8 million in corporate contributions in the past
seven years to political groups, partisan organizations and campaigns
engaged in federal and state elections", mostly to oppose ballot
measures in two states aiming to raise taxes on the oil industry, the
company said that the commitment had only applied to contributions to
individual candidates.
During the 2008 U.S. election cycle, BP employees contributed to
various candidates, with Barack Obama receiving the largest amount of
money, broadly in line with contributions from Shell and Chevron, but significantly less than those of Exxon Mobil.
In 2009, BP spent nearly $16 million
lobbying the
U.S. Congress. In 2011, BP spent a total of $8,430,000 on lobbying and had 47 registered lobbyists.
Market manipulation investigations and sanctions
The
US Justice Department and the
Commodity Futures Trading Commission
filed charges against BP Products North America Inc. (subsidiary of BP
plc) and several BP traders, alleging they conspired to raise the price
of
propane by seeking to
corner the propane market in 2004. In 2006, one former trader pleaded guilty. In 2007, BP paid $303 million in restitution and fines as part of an agreement to defer prosecution.
BP was charged with cornering and manipulating the price of TET propane
in 2003 and 2004. BP paid a $125 million civil monetary penalty to the
CFTC, established a compliance and ethics program, and installed a
monitor to oversee BP's trading activities in the commodities markets.
BP also paid $53 million into a restitution fund for victims, a $100
million criminal penalty, plus $25 million into a consumer fraud fund,
as well as other payments.
Also in 2007, four other former traders were charged. These charges
were dismissed by a US District Court in 2009 on the grounds that the
transactions were exempt under the Commodities Exchange Act because they
didn't occur in a marketplace but were negotiated contracts among
sophisticated companies. The dismissal was upheld by the
Court of Appeals for the 5th Circuit
in 2011.
In November 2010, US regulators
FERC and
CFTC
began an investigation of BP for allegedly manipulating the gas market.
The investigation relates to trading activity that occurred in October
and November 2008.
At that time, CFTC Enforcement staff provided BP with a notice of
intent to recommend charges of attempted market manipulation in
violation of the Commodity Exchange Act. BP denied that it engaged in
"any inappropriate or unlawful activity." In July 2011, the FERC staff
issued a "Notice of Alleged Violations" saying it had preliminarily
determined that several BP entities fraudulently traded physical natural
gas in the Houston Ship Channel and Katy markets and trading points to
increase the value of their financial swing spread positions.
In May 2013, the
European Commission started an investigation into allegations the companies reported distorted prices to the price reporting agency
Platts, in order to "manipulate the published prices" for several oil and biofuel products. The investigation was dropped in December 2015 due to lack of evidence.
Documents from a 2016 bid to drill in the Great Australian Bight
revealed claims by BP that a large-scale cleanup operation following a
massive oil spill would bring a "welcome boost to local economies."
In the same bid BP also stated that a diesel spill would be "socially
acceptable" due to a lack of "unresolved stakeholder concerns."
A leaked email from mid 2017 was leaked in April 2018 in New
Zealand. The email laid out that pricing was to be raised at certain
sites around a region in order to regain volume lost at its Otaki
branch.
US$ 244.58 billion 
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