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BP Shipping Business Profile Report Oil and Gas Industries: Operations & Markets | July 2016
BP Shipping Business Profile Report Oil and Gas Industries: Operations & Markets | July 2016
Simon Jones
BP Shipping Business Profile Report Oil and Gas Industries: Operations & Markets | July 2016
Table of Contents
1
Introduction to BP Shipping........................................................................................ 3 1.1
2
BP Operations .............................................................................................................. 3 2.1
3
4
BP Shipping within BP ............................................................................................ 3 Company portfolio ................................................................................................... 3
BP and BP Shipping Performance .............................................................................. 4 3.1
State of the Oil & Gas Sector .................................................................................. 4
3.2
Current Performance .............................................................................................. 4
3.3
The Future of BP .................................................................................................... 5
Bibliography ................................................................................................................. 5
BP Shipping Business Profile Report Oil and Gas Industries: Operations & Markets | July 2016
1
Introduction to BP Shipping
1.
BP Shipping was funded in 1915 as the maritime arm of the British IOC BP (which was then known as The Anglo-Persian oil company). The business currently owns 45 international vessels which includes 31 medium size crude and product carriers, 2 VLCC (Very large crude carriers), 8 LNG carriers and 3 LPGs. Furthermore, the group has 109 time chartered ships which weigh over 600 deadweight tonnes as well as various other vessels such as tugs and seismic vessels. (BP, 2015)
2.
The business is the oldest continuous business unit within BP. The primary role of the group is to transport oil and gas products across the world’s oceans and is described to “provide safe, efficient, environmentally responsible marine and shipping solutions in support of BP Group strategies.” (BP, 2016) The group also helps to cover logistics and insurance requirements of the BP group.
1.1
BP Shipping within BP
3.
The BP Shipping business is classified under the mid-stream sector within the BP group. The primary focus of the business is to ensure the safe and efficient transportation of hydrocarbons across the world oceans. The business is very important to BP as it gives BP control over the transportation of its products and guarantees that the transportation of its products is carried out at the highest possible standard. The experience and expertise of BP shipping ensures that each delivery is completed on time and that the BP group’s high safety targets are met.
4.
The BP shipping business also has other branches to support the parent company BP in ensuring the safe transportation of its assets. The business has a vetting and clearance team (V&C) which must approve any ship or terminal which interacts with BP assets to ensure that the BP assets are not put at risk. Furthermore, all chartered ships and crew must also comply and is overseen by BP to ensure that they operate within BP’s safety standards.
2
BP Operations
2.1
Company portfolio
5.
BP has operations in over 70 countries all over the world (See Figure 1). (BP, 2015)
BP Shipping Business Profile Report Oil and Gas Industries: Operations & Markets | July 2016
Figure 1: Map Showing all of BP’s Operations across 70 countries worldwide.
6.
The wide range of locations around the world of BP assets and oil fields means that BP shipping transports crude and natural gas all over the world.
3
BP and BP Shipping Performance
3.1
State of the Oil & Gas Sector
7.
Globally the price of oil has collapsed recently. The price of oil has plummeted from a peak price for Brent Crude of $147 per barrel to just $37 at the beginning of 2016. This has impacted all major Oil & Gas companies. The fall in oil prices has been blamed on various factors, including shale production in the USA and the economic slowdown of the Chinese economy. (Heath, 2015)
8.
However, global demand is still on the rise and BP has projected that Oil and Gas will still make up 50% of the worlds energy in 2040. (BP, 2015)
3.2
Current Performance
9.
BP is currently the 8th largest oil company in the world in terms of revenue (Anon., 2015). In 2015 the company was producing an average of 3.3
BP Shipping Business Profile Report Oil and Gas Industries: Operations & Markets | July 2016
million barrels a day resulting in $222.8 Billion in revenue. However Saudi Aramco, the world’s largest, made more than double that figure in revenue ($478 Billion). 10.
In 2006 BP shipping transported 251.7 Million tons of crude oil and products which represented 5% of the worlds sea bore oil movement.
11.
BP has suffered badly in recent years as a result of the collapse in oil prices and a rise in UK production costs. on the 27th of October 2015 BP Chief Executive Bob Dudley announced that “further jobs will be cut” as profits fell by 40% in the third quarter of 2015. BP is also on track to selling more than $10 Billion worth of assets.
3.3
The Future of BP
12.
The future strategy of the company is stated in the ‘BP Sustainability Report 2015’ BP state that “We believe that the best way for BP to achieve sustainable success is by acting in the long-term interests of our shareholders, our partners and society.” This will be done by improving the efficiency of the business by strengthening BP’s portfolio of high return and longer life upstream assets.
13.
Finding ways to continually improve safety and risk management is also a priority to the company in order to avoid a repeat of the Gulf of Mexico disaster in 2010.
14.
With the prospect of peak oil becoming a reality by the mid-21st Century, BP has been looking at ways to adapt in order to survive in a low carbon economy (The board unanimously supported a shareholder resolution in 2015 that requested reports on how BP is preparing for a lower-carbon future). Currently BP has been investing in both Biofuels and on-shore wind farms with operational assets in Brazil and the USA.
4
Bibliography Anon., 2015. List of largest oil and gas companies by revenue. [Online] Available at: https://en.wikipedia.org/wiki/List_of_largest_oil_and_gas_companies_by_revenue [Accessed 28 July 2016]. BP, 2015. BP Shipping: Our Fleet. [Online] Available at: http://www.bp.com/en/global/bp-shipping/our-fleet.html [Accessed 28 July 2016]. BP, 2015. BP Sustainablity Report , s.l.: BP.
BP Shipping Business Profile Report Oil and Gas Industries: Operations & Markets | July 2016
BP, 2016. About BP Shipping. [Online] Available at: http://www.bp.com/en/global/bp-shipping/about-bp-shipping.html [Accessed 28/07/16 July 2016]. Heath, A., 2015. The collapse in the price of oil is a challenge to the old world order. 30 December.
BP Shipping Business Profile Report Oil and Gas Industries: Operations & Markets | July 2016
Simon Jones
BP Shipping Business Profile Report Oil and Gas Industries: Operations & Markets | July 2016
Table of Contents
1
Introduction to BP Shipping........................................................................................ 3 1.1
2
BP Operations .............................................................................................................. 3 2.1
3
4
BP Shipping within BP ............................................................................................ 3 Company portfolio ................................................................................................... 3
BP and BP Shipping Performance .............................................................................. 4 3.1
State of the Oil & Gas Sector .................................................................................. 4
3.2
Current Performance .............................................................................................. 4
3.3
The Future of BP .................................................................................................... 5
Bibliography ................................................................................................................. 5
BP Shipping Business Profile Report Oil and Gas Industries: Operations & Markets | July 2016
1
Introduction to BP Shipping
1.
BP Shipping was funded in 1915 as the maritime arm of the British IOC BP (which was then known as The Anglo-Persian oil company). The business currently owns 45 international vessels which includes 31 medium size crude and product carriers, 2 VLCC (Very large crude carriers), 8 LNG carriers and 3 LPGs. Furthermore, the group has 109 time chartered ships which weigh over 600 deadweight tonnes as well as various other vessels such as tugs and seismic vessels. (BP, 2015)
2.
The business is the oldest continuous business unit within BP. The primary role of the group is to transport oil and gas products across the world’s oceans and is described to “provide safe, efficient, environmentally responsible marine and shipping solutions in support of BP Group strategies.” (BP, 2016) The group also helps to cover logistics and insurance requirements of the BP group.
1.1
BP Shipping within BP
3.
The BP Shipping business is classified under the mid-stream sector within the BP group. The primary focus of the business is to ensure the safe and efficient transportation of hydrocarbons across the world oceans. The business is very important to BP as it gives BP control over the transportation of its products and guarantees that the transportation of its products is carried out at the highest possible standard. The experience and expertise of BP shipping ensures that each delivery is completed on time and that the BP group’s high safety targets are met.
4.
The BP shipping business also has other branches to support the parent company BP in ensuring the safe transportation of its assets. The business has a vetting and clearance team (V&C) which must approve any ship or terminal which interacts with BP assets to ensure that the BP assets are not put at risk. Furthermore, all chartered ships and crew must also comply and is overseen by BP to ensure that they operate within BP’s safety standards.
2
BP Operations
2.1
Company portfolio
5.
BP has operations in over 70 countries all over the world (See Figure 1). (BP, 2015)
BP Shipping Business Profile Report Oil and Gas Industries: Operations & Markets | July 2016
Figure 1: Map Showing all of BP’s Operations across 70 countries worldwide.
6.
The wide range of locations around the world of BP assets and oil fields means that BP shipping transports crude and natural gas all over the world.
3
BP and BP Shipping Performance
3.1
State of the Oil & Gas Sector
7.
Globally the price of oil has collapsed recently. The price of oil has plummeted from a peak price for Brent Crude of $147 per barrel to just $37 at the beginning of 2016. This has impacted all major Oil & Gas companies. The fall in oil prices has been blamed on various factors, including shale production in the USA and the economic slowdown of the Chinese economy. (Heath, 2015)
8.
However, global demand is still on the rise and BP has projected that Oil and Gas will still make up 50% of the worlds energy in 2040. (BP, 2015)
3.2
Current Performance
9.
BP is currently the 8th largest oil company in the world in terms of revenue (Anon., 2015). In 2015 the company was producing an average of 3.3
BP Shipping Business Profile Report Oil and Gas Industries: Operations & Markets | July 2016
million barrels a day resulting in $222.8 Billion in revenue. However Saudi Aramco, the world’s largest, made more than double that figure in revenue ($478 Billion). 10.
In 2006 BP shipping transported 251.7 Million tons of crude oil and products which represented 5% of the worlds sea bore oil movement.
11.
BP has suffered badly in recent years as a result of the collapse in oil prices and a rise in UK production costs. on the 27th of October 2015 BP Chief Executive Bob Dudley announced that “further jobs will be cut” as profits fell by 40% in the third quarter of 2015. BP is also on track to selling more than $10 Billion worth of assets.
3.3
The Future of BP
12.
The future strategy of the company is stated in the ‘BP Sustainability Report 2015’ BP state that “We believe that the best way for BP to achieve sustainable success is by acting in the long-term interests of our shareholders, our partners and society.” This will be done by improving the efficiency of the business by strengthening BP’s portfolio of high return and longer life upstream assets.
13.
Finding ways to continually improve safety and risk management is also a priority to the company in order to avoid a repeat of the Gulf of Mexico disaster in 2010.
14.
With the prospect of peak oil becoming a reality by the mid-21st Century, BP has been looking at ways to adapt in order to survive in a low carbon economy (The board unanimously supported a shareholder resolution in 2015 that requested reports on how BP is preparing for a lower-carbon future). Currently BP has been investing in both Biofuels and on-shore wind farms with operational assets in Brazil and the USA.
4
Bibliography Anon., 2015. List of largest oil and gas companies by revenue. [Online] Available at: https://en.wikipedia.org/wiki/List_of_largest_oil_and_gas_companies_by_revenue [Accessed 28 July 2016]. BP, 2015. BP Shipping: Our Fleet. [Online] Available at: http://www.bp.com/en/global/bp-shipping/our-fleet.html [Accessed 28 July 2016]. BP, 2015. BP Sustainablity Report , s.l.: BP.
BP Shipping Business Profile Report Oil and Gas Industries: Operations & Markets | July 2016
BP, 2016. About BP Shipping. [Online] Available at: http://www.bp.com/en/global/bp-shipping/about-bp-shipping.html [Accessed 28/07/16 July 2016]. Heath, A., 2015. The collapse in the price of oil is a challenge to the old world order. 30 December.
