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BP remains one of the world's three largest independent petroleum producers and refiners, jostling with Shell and ExxonMobil for leadership of the global market. However, it has wrestled with a string of problems since the mid-2000s. In the consumer sector, the group operates an extensive global network of service stations under brands including BP, Arco and Aral, and its portfolio of motor oils and lubricants is led by worldwide market leader Castrol. The current business was created from a series of mammoth takeovers in the late 1990s, including that of US giants Amoco and Arco. These replenished the group's ageing oil reserves and gave it a commanding network of service stations throughout the US and Europe. More recently BP had begun to shape up as one of the forces to be reckoned with in the exploitation of Russia's huge untapped reserves until interference from that country's government. Soon afterwards, BP's US operations, and for a while the group's very future, came under threat from a catastrophic drilling accident in the Gulf of Mexico which created the worst environmental disaster in history and cost billions in clean-up expenses and regulatory penalties.


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Although firmly established as one of the big three Western oil companies, BP's reputation for operational excellence has been shaken by a series of problems in North America since a massive explosion in 2005 at an oil refinery in Texas. These troubles appeared to reach a climax in 2007 with the abrupt resignation of long-standing CEO Lord Browne over a controversy involving his private life. Despite Browne's immense contribution to the group, which he helped to transform into a global leader in the industry, critics pointed to a loss of control over operational details under the latter years of his command in favour of a PR offensive to publicise its support of cleaner or renewable energy resources. This "green" positioning was thoroughly erased by the catastrophic Gulf of Mexico disaster in 2010, which at one stage seemed to threaten the future of the company as well as vast areas of natural habitat in and around the region.

BP's main activities are the exploration and production of crude oil and natural gas; its refining, marketing, supply and transportation, and the manufacturing and marketing of petrochemicals. The group also has a growing involvement in gas and power and in solar power generation, and professes a keen interest in green energy. BP was the first major oil company to acknowledge the apparent link between emissions and global warming, and to call for precautionary action. The company's scale is huge, with operations in more than 70 countries, and production facilities in almost 30, which refined an average of 3.3m equivalent barrels of crude oil or natural gas every day in 2016. BP had proved reserves of around 17.8bn equivalent barrels at the end of 2016, split between oil and natural gas.

The group's operations are split into three divisions. BP Exploration & Production manages what are called the upstream and midstream activities of the group. This division looks for, develops and exploits oil fields, and sells its crude produce either to third party companies or to BP's downstream division, BP Refining & Marketing. It has production operations in 29 countries, including the USA and Canada, the UK, Russia, Norway, South America and Africa. Midstream distribution and processing activities include three major pipelines in Alaska and the North Sea, as well as LNG plants in the Caribbean, Indonesia and Australia. Another division, BP Gas Power & Renewables, is responsible for processing and trading natural gas derivatives including LNG, as well as developing renewable "green" power sources such as solar, wind and hydrogen energy.

The Exploration & Production division has a well-balanced portfolio of interests spread evenly across the globe, but the industry as a whole faces greater uncertainty in the future as a result of political instability, not only in the Middle East but in parts of Africa. Another factor to be wrestled has been the wildly fluctuating price of oil which soared to record highs of over $140 per barrel mid-2008 before plunging below $50 at the beginning of 2009. Since then it has continued to fluctuate wildly. A return to over $100 between 2010 and 2014 was followed by another plunge to below $30 in early 2016 and then a rebound to over $50. As a result, revenues have also fluctuated depending on prices. For 2016, total Exploration & Production sales were $33.2bn, almost half the sum of two years earlier.

Although it is headquartered in the UK, and is an active producer of oil there, the bulk of its operations are in the US. It is the biggest producer of oil and gas in both countries, as a result of substantial fields in the North Sea, the Gulf of Mexico, Texas and Alaska, and also has large-scale production facilities in Angola, off the coast of China, and north-west Australia, among other areas. In early 2010 it acquired rights to additional deepwater fields off the cost of Brazil and in the Gulf of Mexico. However shortly afterwards, in April 2010, a fire on one of its deepwater platforms caused the structure to collapse, killing 11 men and causing oil to spill into the ocean from the drillshaft more than a mile below the surface. Despite numerous efforts to contain the flow of oil, it continued for three months, causing an unprecedented natural disaster. A cap was finally placed over the leak in July 2010. After two years of negotiations with the US Department of Justice and SEC, BP agreed to pay a total of $5.8bn in fines and damages to settle criminal charges relating to workers' deaths and the effect on local businesses, and another $525m to resolve charges that it misled investors over the rate of the oil leak. Civil claims from US federal and state bodies were eventually settled during 2015 at $20.8bn, to be paid over several years, but the group also agreed to fund multiple projects to restore local industry and tourism along the coast. By the end of 2016, total costs associated with the disaster, its clean-up and associated settlements were $62.6bn. In an entirely unconnected incident for which BP was not to blame, but which proved the inherent instability of the industry, several employees were murdered in a terrorist attack on a facility in Algeria in early 2013.

The group has also faced serious challenges over what looked at first to be an enormously promising joint venture in Russia. In 2003, BP agreed to merge its business in Russia with that of two local producers to create TNK-BP, then the country's third largest energy company, in which BP took a 50% share. Its main asset was a controlling stake in the Kovykta gas field in Siberia. However, the Russian government began to put pressure on that business during 2006, and eventually forced TNK-BP to sell its shares in the license for Kovyta, although it retained a strategic alliance with Russia's state-owned Gazprom to develop other fields. Gradually, further pressure was exerted on TNK-BP before erupting into what was effectively an all-out row during 2008. The breakdown commenced with the intervention once again of the Russian government. At the beginning of the year, almost 150 British managers at the joint venture were temporarily suspended from work because they were said to have invalid visas. Shortly afterwards, a senior TNK-BP executive and his brother were arrested and accused of spying for the British government.

At the same time, there were rows between BP and its Russian partner in the joint venture, Alfa-Access-Renova (AAR), a holding company for three Russian tycoons. They argued that TNK-BP's British-appointed but American-born CEO Bob Dudley was neglecting their interest, and was failing to develop opportunities outside Russia. As a result, he was forced to leave the country in summer 2008. The combination of these various difficulties led to speculation that the Russian government was effectively attempting to force both BP and AAR out of the joint venture and seize control of the business. A truce was agreed in September, under which the two sides agreed to find a new mutually acceptable CEO to replace Dudley. However, no full time replacement was found until November 2009 almost 18 months after the CEO's departure. Even then, the new choice, Maxim Barsky, did not take management control of the business until mid 2010. Following that appointment, relations between the two sides calmed considerably, for a while at least.

Strengthening its ties to Russia, BP agreed in early 2011 to an alliance with that country's largest oil producer, government-controlled Rosneft, secured with a $16bn share swap. As a result, the Russian company would have become BP's single largest shareholder with around 5%. BP in turn would have almost 11% of its partner. The deal was designed to pave the way for a new joint venture to explore for oil in the Russian Arctic continental shelf. However the arrangement angered BP's existing partners at TNK-BP, who launched a lawsuit to block the new deal. Their case was upheld by an arbitration court, and Rosneft signed the deal with Exxon Mobil instead. The row over BP's attempt to sign a separate deal with Rosneft further damaged the relationship with TNK, and BP finally put its 50% stake in the TNK-BP partnership up for sale in 2012. In October, Rosneft agreed to buy out BP for around $27bn in cash and shares. BP ended up with a stake of almost 20% in Rosneft, which also negotiated a separate deal to acquire AAR's stake. As a result, Rosneft became the world's largest traded oil group by production.

BP transports its products worldwide through a network of almost 26,000 miles of pipeline, much of it in the United States, as well as an international tanker fleet of more than 40 vessels. It sells or trades more than 6m barrels of refined products every day, enough to supply the entire oil needs of France, Spain and the United Kingdom combined.

BP Refining & Marketing is the main public face of the group, responsible for refining crude into saleable products such as gasoline/petrol and oils, and marketing those "downstream" through its retail network. Combined sales in 2016 were $167.7bn. The company controls 14 oil refineries around the world, mostly in Europe and the US. (Two of its five US refineries, including the one in Texas City where it suffered a huge explosion in 2005, were sold in 2012).

BP also operates an extensive global network of service stations, operating under the Arco, BP and Aral brands. However, the estate has been pruned in recent years, with directly controlled outlets falling from over 22,000 in 2012 to 18,000 by the end of 2016 in 50 countries. BP Retail is the second largest marketer of gasoline in the US (behind Royal Dutch/Shell), with about 7,100 service stations nationwide, some directly managed but the majority operated by third parties under license. East of the Rocky Mountains, these operate under the BP and Amoco brands; all stations west of the Rockies operate under the Arco banner. In 2012, BP sold the Arco gas station network, as well as a refinery in Carson, California, to rival operator Tesoro. BP continues to operate some Arco stations in Northern California under license from Tesoro. Around 1,100 service stations also house convenience stores, trading under the am/pm banner. Previously owned by the group, the majority of these outlets were sold to franchisees in 2007. The group is also the leading marketer of premium grade gasoline, with brands including Amoco Ultimate, known as BP Ultimate or Ultimate 100 in Europe.

The group has a further 10,900 service stations worldwide, operating mainly under the BP brand. It is the #2 marketer of petrol throughout Europe, but #1 in Germany, operating primarily under the Aral name. Acquired in 2002, Aral was already Germany's leading oil products marketer. Existing BP-branded outlets were converted to the Aral badge. In China, the group agreed two joint ventures in 2004 with Sinopec and PetroChina to build and operate around 1,000 service stations in that country. The group's retail business has expanded widely beyond the sale of oil products, with many service stations also housing a range of other customer services including convenience stores, cafes, bakeries. Most Aral stations in Germany also offer hot food, making it the country's #3 fast-food retailer after McDonald's and Burger King. Brands in the US include Split Second, as well as BP Connect, Petit Bistro and Wild Bean Café in several English-speaking markets. In the UK, BP Retail also has a very successful forecourt partnership with Marks & Spencer to manage around 200 outlets of the latter's M&S Simply Food stores. The group also has partnership sites with McDonalds in the US, Pick n Pay in South Africa and Iseya Kosan in Japan. In 2016, it established partnerships in Germany with REWE and in the Netherlands with Ahold's Albert Heijn. It also agreed to acquire Woolworths Australia's chain of around 530 petrol station convenience stores, but that deal was blocked by regulators.

In addition to gasoline, BP is the world leader in motor vehicle and motorcycle lubricants and services, with a broad range of engine oils, transmission fluids and brake fluids, sold in more than 150 countries worldwide. The core brand in this sector is Castrol, one of the world's best-known motor oil brands, its reputation established by long-running marketing campaign which positioned it as the leader in "liquid engineering". It is supported by a clutch of secondary brands including Duckhams, Veedol and Aral.

The group also supplies aviation and marine fuel, oils and lubricants, as well as specialized products for industry. A separate division, BP Petrochemicals, is one of the world's leading manufacturers of polymer-based chemicals, with manufacturing plants in the United States, Britain, Belgium, France and Germany, and joint ventures in other territories. It produces raw materials for plastics such as polystyrene and polyethylene, as well as for numerous other applications as diverse as pharmaceuticals, cosmetics, detergents and packaging.


Despite steep increases in profits at its main rivals, boosted by the soaring price of oil, BP's bottom line has been under pressure since 2006. After bumping along up and down for several years, the Gulf of Mexico oil spill left a huge dent in 2010, as net attributable reported profit of almost $16.8bn in 2009 plunged to a loss of $3.3bn.

Profits rebounded to $26.1bn in 2011, before slumping once again in 2012 to $11.8bn. Total revenues for 2012 were more or less flat at $375.58bn. A rise in 2013 to $379.14bn was followed by a sharp decline in 2014 to $353.57bn as a result of falling oil prices. Profits rebounded in 2013 to $23.45bn, because of a big gain on the sale of the TNK-BP investment, before plunging once more in 2014 to just $3.78bn, partly as a result of a $9bn impairment charge against the perceived value of certain oil and gas fields, half of them in the North Sea. The group was back into the red in 2015 with a loss of $6.4bn as a result of further charges associated with the Deepwater Horizon disaster. Revenues were $225.98bn. For 2016, BP reported a net profit of $172m on total revenues of $186.61bn.

There has been a strong rebound since then. Profit soared to $3.5bn in 2017 on revenues of $244.58bn; then almost tripled in 2018 to $9.6bn for 2018. Revenues topped $300bn for the first time since 2014 at $303.7bn.


The current group is the combination of several separate businesses, some dating back to the late 19th century, all of which were combined under the BP name in a string of mammoth mergers between 1997 and 2001. The oldest brand within the group is Arco, originally the Atlantic Petroleum Storage Company, first founded in 1866 in the US to store and ship crude and refined oils. It was acquired by John D Rockefeller's Standard Oil Trust in 1874 before being cut loose again by the forced break-up of Standard Oil by the US government in 1911. Atlantic began to develop its gas station network from 1915, and later acquired several rivals including Richfield and Sinclair, which added substantial oil pipelines and crude oil production facilities throughout the US. Following the Richfield purchase the group became Atlantic Richfield Company, or Arco. By 1984 Arco was established as the leading gasoline marketer in the West of America, while also making significant discoveries of new resources around the world. The company was the first foreign explorer with access to the Chinese mainland and developed the country's first offshore commercial gas reserves in the 1980s. In 1997 it agreed a joint venture with Russia's Lukoil to develop reserves in in Russia and other countries.

Amoco was formed in 1889 by Rockefeller's Standard Oil Trust to build a refinery in northwestern Indiana. Spun out of Standard Oil Trust in 1911 as Standard Oil of Indiana, it began to develop its own gas station network to sell other companies products, while also developing an important new process ("thermal cracking") for increasing the yield of gasoline from a barrel of crude oil. It adopted the Amoco name from the American Oil Company, which it acquired in the 1920s. The company went looking for its own reserves from the 1930s, discovering substantial resources in Texas in 1935. Amoco acquired a number of chemical manufacturing facilities in the 1940s and in 1947 drilled the first ever offshore well out of the sight of land in the Gulf of Mexico, before moving into Canada and other international markets in the 1950s. Over the next 40 years the group established production or refining facilities in more than 30 countries worldwide in addition to its substantial petroleum and chemicals operation in the US. But it also made negative headlines in 1978 when its huge Amoco Cadiz tanker went aground off the coast of France, spilling 120,000 tons of oil into the sea. The company was later fined $128m. By the late 1990s the company was the #5 oil producer in the US.

Burmah Castrol was itself already the product of a merger between two British companies, Burmah Oil and CC Wakefield & Company. Founded in 1886, Burmah was formed to search for crude oil in the Asian country of Burma, and was already a substantial business by the early 20th century. It was the original backer of what later became British Petroleum, before selling a majority of its stake to the British government, and was later an investor in Shell as well. By the 1920s it was a fully integrated exploration, production, refining and marketing operation, working mainly in Asia. Later it moved into the UK, and was the first company to discover oil in the North Sea in 1966. That same year Burmah Oil acquired CC Wakefield & Co, which had been formed in 1899 to sell industrial and railway lubricants. In 1907 Wakefield began marketing motor oil for the rapidly expanding automobile market. To create an oil that would remain runny enough to work efficiently at very low temperatures but remain thick in heat, Wakefield's researchers added castor oil to the base product, which led to the coining of the brand name Castrol two years later. By 1939 the company was trading across Europe, North America, Asia and southern Africa, and it floated in 1943. Renamed Castrol Group in 1960 it moved unsuccessfully into other fields including metal treatments, waterproofing compounds and plastics production and this led to its takeover by Burmah in 1966. Later the combined Burmah Castrol group expanded internationally and moved into specialty chemicals and other areas.

Yet all three companies were themselves swallowed up by BP, a company which has become one of the giants of the industry despite a most uncertain beginning. The group owes its origins to the adventurer William Knox D'Arcy, who in 1901 obtained a concession from the Shah of Persia to explore for the country's suspected oil resources. Despite high hopes, the project almost proved a complete disaster. Hampered by tribal conflicts and severe weather conditions, Knox D'Arcy's engineers spent several years without discovering sufficient commercial reserves. After running out of funds, he was eventually forced to sell his concession to the already substantial Burmah Oil Company, although he remained a director of the project.

Finally a large field was discovered in 1908 in southwest Persia, the first commercial oil field anywhere in the Middle East. Burmah Oil established The Anglo-Persian Oil Company the following year to exploit the find. However this too proved a financial burden because of the stranglehold maintained by the Royal Dutch-Shell partnership over the global industry. Burmah Oil sought support from the British government, selling the Admiralty office a majority stake in Anglo-Persian in return for a deal to supply the country's naval forces with fuel. When war with Germany broke out in 1914, the government transferred to Anglo-Persian the assets it had seized from a German company which had been selling its own oil to consumers under the name British Petroleum. This suddenly gave Anglo-Persian an extensive distribution network of more than 500 depots across the country as well as rail and road tankers. As a result, Anglo-Persian began to expand its sales operations within the UK, selling its own cans of "motor spirit" under the BP name from around 1917. A member of the company's purchasing department won a staff competition to design the first trademark, which featured the letters BP set within a winged shield. Gradually, yellow and green were adopted as the brand's colours.

As a partially nationalised company, Anglo-Persian expanded rapidly after World War I, exploring for oil in other areas of the Middle East, as well as Canada, South America, Africa and Europe. It built numerous refineries around the world, and was established as one of the world's leading oil businesses by the 1930s. However no other oil resources came close to matching its original find, and its refinery in Persia was still the world's biggest when that country renamed itself Iran in 1935. Anglo-Persian renamed too, becoming The Anglo-Iranian Oil Company.

Almost inevitably, the relationship with the Iranian government began to sour by the close of that decade as resentment grew over British exploitation of the country's natural reserves. Tortuous negotiations to resolve the dispute finally failed in 1951, and Iran confiscated Anglo-Iranian's assets and nationalised them. The resulting international crisis led to further negotiations. Finally Iran agreed to hand back the concession to a consortium of international producers in 1954 in return for a greater slice of the profits. Now obliged to share its facilities with others, Anglo-Iranian changed its name to British Petroleum in a symbolic break with its past. It was also forced to develop operations elsewhere to compensate for the reduction in revenues from Iran, and developed further sidelines in petrochemicals and lubricant production.

However the most important development was the discovery of substantial gas reserves in the British North Sea. British Petroleum became the leading exploiter of these resources, discovering West Sole in 1965, and then the much larger Forties field in 1970, brought on-stream in 1975. At its peak, Forties produced half a million barrels a day, equivalent to one-quarter of the UK's daily energy requirement. Meanwhile, after 10 years of exploration in Alaska, the company was also rewarded with the discovery of the massive Prudhoe Bay oil field. With insufficient resources in the United States to exploit this field, BP sold rights to US-based Standard Oil of Ohio, another offshoot of Rockefeller's original oil monopoly, in return for a minority shareholding and an option to take majority control of Standard if production exceeded 600,000 barrels a day. This option was finally triggered in 1978. But by then two further crises had beset the industry, pushing up prices dramatically. In 1973 most oil producing countries of the Middle East stopped supply to the United States, causing prices to triple virtually overnight. Five years later, the Islamic Revolution in Iran led to a temporary suspension of supply from what had been until then the world's second biggest exporter.

These tremors encouraged further diversification. During the 1970s, BP became involved in animal feed and breeding, consumer foods and related products. It also began mining for coal and other minerals in the US and other territories, acquiring British-based mining finance house Selection Trust in 1980, while subsidiary Standard Oil acquired Kennecott, America's largest copper producer. The group acquired major chemicals manufacturing facilities in Europe from Union Carbide and Monsanto. By the end of the 1980s, however, the group was wrestling with too many diverse interests, the highest exploration costs in the industry, and a portfolio of oil reserves all past their peak. The turning point came in 1987, when BP launched a $4.7bn bid to acquire the 45% of Standard Oil it did not already own, followed by British oil explorer and producer Britoil. Also that year, the British government floated its remaining 31% shareholding in BP. Shortly afterwards, the group embarked on a huge restructuring in order to consolidate its attention on hydrocarbons, selling off most of its minerals and nutritional businesses by 1992. At the same time it reduced employee numbers from 129,000 in 1987 to around 59,000 by the end of the 1990s.

Despite its mammoth size, BP managed to surprise most analysts with the skill and speed with which it consolidated its huge empire, while also rapidly boosting its profitability. Much of the credit for this went to new CEO John Browne, appointed in 1992 after a long career in the group's Exploration & Production division. One of his first moves was to secure future oil reserves by launching a major push into developing oilfields in the Gulf of Mexico, the Caspian Sea and off Angola. In 1996 he was the architect of a deal to combine BP's fuels and lubricants operations in Europe with those of Mobil, before taking full control of them in 1999. He also initiated an even more ambitious growth strategy in 1999, with the deal to acquire Amoco, by then wrestling with a dip in profitability as a result of international exploration and production, as well as the massive fine relating to the Amoco Cadiz oil spill. The $52bn deal was the biggest-ever industrial takeover at the time. Renamed BP Amoco, the giant business then paid $32bn a year later to snap up Arco, which was wrestling with the fallout from its unprofitable joint venture in Russia. In 2001, Burmah Castrol joined the party with a price tag of $4.7bn. The Amoco tag was dropped from the BP name later that year. A new corporate logo, known as the "helios", was introduced in 2000.

The stream of acquisitions has continued. In two transactions in 2001 and 2002, the group transferred its shareholding in German gas producer Ruhrgas to that country's E.On, in exchange for control of Veba Oel, a gas explorer and producer which also owned the country's leading service station brand, Aral. Veba's exploration and production operations were sold off. At the same time BP sold off some of its mature gas and oil reserves, including the Forties North Sea field, in order to concentrate on developing resources. In 2003, in a major strategic move, BP made the biggest direct foreign investment to-date in post-Soviet Russia by agreeing to merge its interests in the country with those of Alfa Group and Access-Renova in a deal worth around $7.7bn. BP ended up with a 50% stake in the combined business, TNK-BP, Russia's third-largest oil company.

In 2005, a massive explosion at one of the company's largest US refineries in Texas killed 15 employees and injured more almost 200 more. A second explosion rocked the same plant four months later. The group later agreed to pay safety regulators a fine of $21m, and agreed financial settlements with the families of workers killed or injured. BP is also under pressure in Alaska over allegations that it failed to report oil spills from its pipeline there which caused environmental damage, and it agreed to pay $81m to settle a lawsuit over emissions violations at a California refinery. Also in 2005, Russian government tax inspectors issued a demand to TNK-BP for $1bn, supposedly in relation to unpaid taxes from 2001. Meanwhile the group boosted its presence in developing markets, agreeing a $3bn deal to build a refinery in India in partnership with local company Hindustan Petroleum, and launching talks with Sinopec of China to broaden the terms of their existing partnership.

During summer 2006, tensions were revealed within BP's boardroom when it was reported that CEO Sir John Browne had been forced by non-executive chairman Peter Sutherland to confirm plans for his resignation in accordance with company rules of retirement at the age of 60. Browne had hoped to remain in his post for longer. Another crisis erupted soon afterwards when pipelines at the massive Prudhoe Bay field in Alaska, managed by BP, were found to be severely rusted, forcing the company to shut down the field and suspend its supply of 400,000 barrels of oil per day while repairs were made. Shortly afterwards, the group was also forced to admit that one of its offshore wells in the Gulf of Mexico was still leaking oil a year after it was damaged by Hurricane Katrina.

Adding further to its woes, an investigation was launched in the US in August 2006 into allegations that BP manipulated crude oil and unleaded gasoline markets in 2003 and 2004. A month later the group unveiled even more bad news, announcing technical problems at its new Thunder Horse oil field in the Gulf of Mexico which postponed the start of full production from 2007 to 2008. Capping a difficult couple of years, Lord Browne resigned earlier than expected in May 2007, after he was forced to admit that he had lied in court in an attempt to prevent a newspaper publishing allegations about his private life. Following his appointment to the top job, new CEO Tony Hayward sought to make peace with regulators, agreeing to pay fines totalling $380m to settle charges relating to the refinery explosion, oil pipeline leaks and energy trading fraud. Yet in April 2010 the group was at the centre of an even bigger disaster when an oil platform it was leasing in the Gulf of Mexico caught fire and collapsed, causing a massive oil leak which gushed millions of gallons of crude into the open ocean.

Last full revision 31st July 2015

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