Areas of Activity
British Petroleum (BP) ranks among the world’s leading firms involved in carbon-based products and services. By 2009, it was active in six main sectors: oil and gas exploration and production, refining and marketing, chemicals, lubricants, trading and shipping, and renewable energy.
First, BP is known for locating oil and gas reserves, drilling new wells, and extracting oil (BP, 2010). Second, the company processes carbohydrates and distributes the products, such as gasoline, diesel, and jet fuel (BP, 2010). Third, BP produces a wide range of chemicals used by various industries, including manufacturing, construction, automotive, and consumer goods (BP, 2010). Fourth, the company buys, sells, and transports oil, gas, and other energy products globally (BP, 2010).
Fifth, the company produces lubricants used in the automotive, industrial, and marine sectors to protect machinery from increased friction and improve its performance (BP, 2010). Finally, the company produces and develops renewable energy sources, including solar and wind power, as well as biofuels (BP, 2010). BP’s operations vary over time as the company adjusts its strategic focus and adapts to changing market conditions.
Geography of Operations
The company’s headquarters are located in London, UK. However, the company has significant holdings worldwide that contribute to its success. First, the company owns assets in the Deepwater Gulf of Mexico, the Lower 48 states, and Alaska, which enable it to operate in North America (BP, 2010). Second, the company has stakes in Africa, as well as in Venezuela, Trinidad & Tobago, Colombia, Argentina, Bolivia, and Chile (BP, 2010).
Third, the company is interested in the UK’s North Sea, UK Continental Shelf, Amethyst, Easington Catchment Area, and Mercury fields (BP, 2010). Additionally, BP is interested in Norwegian fields. Fourth, the company is interested in Angola, Algeria, Libya, and Egypt in Africa. Finally, BP has significant investments in Asia, including Vietnam, Azerbaijan, Russia, China, Indonesia, Iraq, and Kazakhstan.
Sources of Revenue
The company acknowledges revenues from three central segments: exploration and production, refining and Marketing, and other businesses. According to the company’s financial statements for 2009, BP’s central source of revenue was refining and marketing, totaling $213,050 million, while revenues from exploration and production totaled $57,626 million, and revenues from other activities totaled $2,843 million (BP, 2010). This implies that the company generates its revenues primarily from the sale of crude oil, natural gas, and natural gas liquids (NGLs) produced from BP-operated fields, as well as through its ownership in joint ventures and partnerships. Additionally, revenues are generated through buying and selling these commodities on global markets, taking advantage of price differentials, and optimizing the supply chain.
Financial Operations
The company finances its operations both through debt and equity. The company’s total liabilities were $74,535 million in 2009, with $25,518 in debt (BP, 2010). At the same time, BP’s equity was $102,113 million in 2009, comprising $5,179 million in share capital and $ 96,934 million in reserves (BP, 2010).
As for the long-term assets, the company acknowledged $3,964 million in land and improvements, $2,742 million in buildings, $146,813 million in oil and gas properties, $37,905 million in plant, machinery, and equipment, $3,045 million in fixtures, fittings, and office equipment, $12,295 million in transportation, and $10,345 million in oil deposits, storage, tanks, and service stations (BP, 2010). The company also held $8,620 million in goodwill, $10,260 million in intangible assets, $15,296 million in investments in jointly controlled entities, and $12,963 million in associates (BP, 2010).
Summary
In conclusion, BP is a global company involved in various carbon-related industries. Its operations in 2009 encompassed oil and gas exploration, processing and selling petroleum, chemical production, lubricant manufacturing, commercial trading and transportation, and sustainable energy development. With headquarters in London, BP has significant holdings worldwide, including assets in North America, Africa, the UK, Norway, and various Asian countries.
The company’s primary revenue sources are exploration and production, refining and marketing, and other activities, with refining and marketing generating the highest share. BP’s revenues are derived from the sale of crude oil, natural gas, and natural gas liquids, as well as trading activities in global energy markets. BP utilizes a mix of debt and equity financing to support its operations.
References
BP. (2010). Annual Report and Accounts. Web.