The BP StoryBrian MillerAGI Leadership Forum – May 1, 2006
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Who we are
…market capitalization $231 billion (as at 7 Feb 2006)
BP is an oil, gas, petrochemicals and renewables company
We employ around 102,900 peopleWe have operations on 6 continents and in over 100 countries
…annual revenues/turnover of $253 billion (in 2005)
…the 2nd largest oil & gas company and one of the 10 largest companies in the world
…serving 13 million customers every day
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What we do
BUSINESS SEGMENTS
RESOURCES
Exploration & Production
CUSTOMER FACING
Refining & MarketingGas, Power & Renewables Integrated Supply & Trading
(including Acetyls & Aromatics from Petrochemicals)
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Our global presence
Oil
Gas
Chemicals
Refining
Market positions
An opportunity and a responsibility
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Where our people come from
1. Some Mobil employees became part of BP staff post dissolution of JV in Europe2. BP acquired some Belgium assets
1.
2.
(2000)
(2002)(2002)
(2000)
(1999)
(1996)
(2000)
(2001) (2001)
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Reserves and enterprise value: 1997
End of year 1997, based on published data
ENI
Shell
BP
Exxon
ChevronChevronAmocoAmoco
Elf
TOT
Texaco
ARCO
Philips
REP
Mobil
Fina0
Reserves billion boe
EV $bn
50
100
150
200
250
300
5.0 10.0 15.0 20.0 25.0
7
0
50
100
150
200
250
300
350
0.0 5.0 10.0 15.0 20.0 25.0
Proved Reserves boe billion
En
terp
rise V
alu
e $
bn
Exxon/Mobil
BPRoyal Dutch Shell
TOTAL
Chevron
Conoco/Phillips
ENI
Repsol
SectorStructural Change since 1997
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The world’s largest companies
Source: Financial Times 31 March 2005
Market Cap ($bn) Company
382 1 General Electric
380 2 Exxon Mobil
262 3 Microsoft
234 4 Citigroup
221 5 BP
212 6 Wal-Mart Stores
210 7 Royal Dutch/Shell
199 8 Johnson & Johnson
195 9 Pfizer
178 10 Bank of America
176 11 HSBC
171 12 Vodaphone
165 13 IBM
148 14 Total
144 15 Intel Corporation
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Our aspirationA great future
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“To be numbered amongst the world’s great
companies when evaluated on financial returns
and growth, being a great place to work and
building a positive relationship with society.
BP’s strategy, February 2004 “Our fundamental purpose as an
organization is to provide better goods
and services in the form of light, heat,
power and mobility to increasing numbers
of people and thereby to deliver
shareholder value on a long term basis.
Sustainability Report 2005
Our aspiration and our purpose
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Attract and retain top talent
top brand
Consistently rated as a buy by top
brokers
Consistent out-performance of
peers
Highly regarded by customers & stakeholders
As rated by other senior executives
Source: McKinsey
Key dimensions of great companies
Top brand
Financial performance
Desirable employer
Admired and respected by peers
Great company
Recommendedby brokers
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Our business strategyFuelled with possibilities
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Existing profit centers
Existing profit centers: managed decline
Latin America
North America Gas
North Sea
Middle East
Alaska
Egypt
0
500
1000
1500
2000
2500
3000
2002 2003 2004 2005 2006 2007 2008 2009 2010
thou
sand
boe
/day
EPCs Disposals
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New profit centers
Capital efficiency: project delivery
Asia Pacific
North Africa
AngolaTrinidad
Gulf of Mexico Deepwater
TNK-BP
Azerbaijan0
500
1000
1500
2000
2500
3000
3500
2002 2003 2004 2005 2006 2007 2008 2009 2010
thou
sand
boe
/day
NPC+Kaz TNK-BP
For further information contact Michael Elliott [email protected]
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Connecting to the Future--Business and Policy Intersections
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BP is a gas supermajor
Our medium-term intent is to grow by 2% to 3% a year, in line with global gas demand by:
• Gas now makes up some 40% of BP’s total production
• BP is one of the world’s largest gas marketer and traders providing gas to customers in 26 countries
• We are the second largest supplier of gas into LNG plants
• realising the full potential of existing and new profit centres
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Alternative Energy
• In 2005, we established a new business called BP Alternative Energy to generate and market cleaner, low carbon power from solar, wind, hydrogen and natural gas sources.
• $8 billion investment over 10 years.
• Globally, the power sector is the biggest source of greenhouse gas emissions – responsible for about twice the emissions of the transport sector.
• Some 40% of the power-generating capacity required to meet projected world electricity demand in 2020 has yet to be built.
• The business will initially employ around 2,500 people.
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Alternative Energy
Solar
• Operating for over 30 years we are one of the world’s top three solar manufacturers and marketers.
• We plan to increase sales of solar panels from 110MW capacity to 300MW by 2008.
Wind
• We have constructed two wind farms in the Netherlands producing enough power for over 15,000 Dutch homes.
• Under Alternative Energy we aim to grow our wind business from 30MW to 450MW in 2008 and become a Top Tier player by 2015.
Hydrogen Power
• Generating power from hydrogen using fossil fuels such as coal, oil and natural gas. In June 2005 we announced our plans to design the world’s first commercial hydrogen power plant in Scotland and earlier this year we announced a proposal to build a second plant in California.
• The carbon dioxide emissions from generating power in this way are 90% lower than those that would be generated by burning fossil fuels.
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Alternative Energy
Natural Gas to Power• BP already owns, operates or contracts 12 gigawatts of
gas-fired power capacity – enough to power over 10 million homes.
• The majority of these plants produce electricity with combined cycle gas turbines and cogeneration plants.
• Over the next 3 years we plan to start construction of two new gas-fired cogeneration power facilities with an output of more than 700 megawatts.
Power Marketing & Trading • Among the top tier power marketers in North America.• In 2004, we provided customers with 300 million megawatt
hours of electricity.• We also provide our wholesale customers with secure,
reliable electricity and innovative risk management services to help reduce price volatility.
• In many markets we are able to offer a number of low-carbon products, including certified green electricity, as well as integrated solar and clean grid power solutions.
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Our challengeA sustainable existence
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““Sustainability is fundamental to our purpose as a group.
Everything we do is designed to achieve the goal that our board
sets on behalf of our shareholders, to maximize shareholder value
on a long-term basis. In order to maintain value in the long term,
we not only have to develop a successful business strategy but
pursue it in such a way that we earn the trust of shareholders,
customers, local communities, governments and others whose
support is critical to our long-term future. To retain that trust we
have to behave responsibly and consistently.
BP’s Sustainability Report 2004 (published April 2005)
Sustainability How we work
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BP’s business profile continues to change
Changes to our asset portfolio present reputational risks that drive our increasing focus on corporate responsibility
Iran
Kuwait
Existing Profit Centres
Nigeria
Libya
New Profit Centres
Russia
0
1000
2000
3000
4000
5000
6000
1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005
Pro
du
cti
on
(m
boe/d
)
2008
Source: 2005 – 2008 BP estimates
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Environment Climate change context
• World’s estimated annual emissions from hydrocarbon consumption is nearly 25 billion tonnes of CO2
• Emissions from BP’s productsaccount for approx 5% of global CO2 emissions
• BP’s operations contribute less than 0.4% of annual global emissions
• We are looking at ways to reduce emissions from our products as well as our operations
Slide 2
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Environment Our position on climate change
We will continue to focus on three main areas:
1. Provide leadership
2. Continue to reduce the carbon content or impact of our products
3. Continue to minimise our operational emissions
Our position is that there is no single solution!
BP brand story
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Perceptions
• British company
• Big oil company that makes a lot of money
• A global enterprise
• An energy company
• An organisation that cares about the environment
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Our brand aspiration
“ We want to build one of the world’s“ great brands by building an“ organisation devoted to revolutionising“ the world’s relationship with energy.”
Lord Browne (2000)
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USA
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Communicates a promise….
Evokes a set of expectations and associations - from every experience
with a person, product, service or company
A brand…
Experiences :
• How we work
• What we say
• What we do
• What we stand for
• How we deliver value Reputation
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BP brand theme…beyond petroleum..
• abandoning oil and gas or getting out of hydrocarbons
• focusing only on alternatives (renewables)
• the products we produce and sell, but it is also about our relationships & how we think, behave & perform as a company
• referring to it as the name of the company
• using it just as an expression in advertising
it does Not mean we are…
• reaching past one company to combine the talents of many
• delivering performance without trade-offs
• it’s the courage to lead, not just the ability to compete
• innovating, improving & making a difference
• being creatively engaged and applying the skills we have to provide answers, not excuses
Beyond is about…
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Thank you… Questions???
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