British Petroleum (BP) is a British multinational organization that deals in gas and oil processing. The company has its headquarters situated in London and is argued to be the sixth largest organization within the energy sector in terms of market capitalization (Lilien & Grewal, 2012). The company is well known for vertically integrating its operations to enable it to operate in all the areas involved in oil and gas exploration. It undertakes to explore, produce, distribute, refine and market petroleum products. The company has also undertaken to produce renewable energy, as well as wind power. Currently, the company’s operations are spread across 80 countries with an estimated daily production of 3.2 million barrels. This paper seeks to discuss BP in the last five years of its operations from various dimensions.
The last five years of BP operations was marked with various activities. In the year 2009, the company partnered with CNPC to explore and refine oil in Rumaila field in Iraq (Jennings, 2012). The exploration started in June 2010 with BP announcing an ambitious divestment program to correct mistakes associated with the oil spills it had experienced earlier. Either, more business ventures were obtained in Africa with another joint venture with a Russian company named Rosneft to explore oil and gas in Russia. Between 2011 and 2013, the company entered a number of partnership deals that would see it obtain a 30% stake in Indian energy sector as well as reducing its production of alternative energy.
In terms of finances in the last five years, BP has performed tremendously bearing in mind that it spent massively in terms of compensation for the damages caused by the spillage in the Gulf of Mexico where it operated (Mellahi, 2012). In the year 2010, the company posted a net loss of 3.3 billion dollars that were occasioned by the spillage it had experienced. The spillage led to a 13% reduction of its oil and gas production. This situation was, however, reversed in the year 2011 when it recorded a net profit of 26 billion dollars. There were better prospects in the coming years as the company predicted even better postings of profits.
There are a number of strategies that BP has adopted over time as a response to most of the issues that rose after the Gulf of Mexico spillage (Lilien & Grewal, 2012). The company’s management team has embraced a strategic management approach over time while keeping a close look at the manner in which different leadership styles and strategic orientations blend on the basis of strategic processes, context and content. The company has also opted to merge with oil producing companies in the emerging economies as a strategy to shelve themselves from assuming total responsibility in case of any eventuality. It ensures that the company spreads its risk base. The company also changed its image and went further to create a different company that deals with issues of global warming investing in wind produced energy thus shaping the energy sector. This strategy ensured that BP remained on top of the game over its competitors.
In the past period, leadership had changed hands from Lord John Browne to Tony Hayward whose leadership style was admired by many (Jennings, 2012). The leadership style that he introduced made his staff more proactive. Things changed drastically after the oil spillages that lead to a change in the leadership style of which Hayward became more aggressive and occasionally but blatantly criticized his employees over their working styles. He has become more unpredictable as opposed to the earlier days where his staff could predict certain aspects of him.
There are a number of ethical issues that have faced BP especially after the Deepwater Horizon explosions in the Gulf of Mexico (Mellahi, 2012). BP did not disclose much information on the risks involved in its ventures to shareholders within the stock markets and such information was only availed after the explosion that led to many intrigues within the oil industry. Ethically, BP was charged with the responsibility of availing such information to the investors who invested in the company.
References
Lilien, G. & Grewal, R. (2012). Handbook of Business-To-Business Marketing. Cheltenham: Edward Elgar Pub.
Jennings, M. (2012). Business: Its Legal, Ethical, And Global Environment. Mason, OH: South-Western Cengage Learning.
Mellahi, K. (2012). Global Strategic Management.
