BP Exploration - Case Study Example

Drawing on your previous analysis, to what extent do you believe BP Exploration's relative performance can be sustained in the medium term Over the last five years, BP Exploration has drawn on a number of resources and capabilities which keep it one of Britain's biggest companies and one of the largest oil and petrochemicals groups in the world. BP employs more than 65,000 people in 70 countries. BP Exploration is responsible for 60% of BP's worldwide revenue. It employs 60% of BP's staff and has more than 40 independent Assets.

1 BP's work on oil and natural gas exploration and production, together with the management of crude oil and natural gas pipelines, processing and export terminals has led the company to many areas of the globe. BP Exploration has a wide resource base; already with strong positions in Alaska, the North Sea and North America, it is now developing major new fields in Angola, Azerbaijan, Trinidad, Algeria and in the Gulf of Mexico, with liquefied natural gas business expanding into the Asia Pacific Region.

BP's TNK BP venture in Russia employs 100,000 people. It owns and operates five refineries through West Siberia, the Volga-Urals and East Siberia. The BTC Pipeline now runs 443km through Azerbaijan, 249km through Georgia and 1,076km through Turkey. The pipeline, buried its entire length, has eight pump stations. It is the first direct pipeline link between the Caspian Sea and the Mediterranean. BP hopes the BTC project will bring positive economic advantages to the region and avoid increasing oil traffic through the vulnerable Turkish Straits.

In addition to BP Exploration's projects worldwide, BP promotes an 'Upstream' mindset - the company works towards long-term sustainable business, delivering superior service through cycle returns by having a greater share of large, low cost oil and gas fields.2 BP has implemented key successful strategies in order to remain a world leader. These are: making a stand on global warming and climate change; promoting an 'upward feedback' strategy in-house; and development of a business intelligence strategy.

To a large degree BP Exploration's resources and capabilities are well aligned with its business plan, generating a competitive advantage for the company as a whole. In the late 1990's BP made a break with the petrochemical industry and set a precedent. The company's management understood it was good business to incorporate ecology into business and community strategic planning. In May 1997, BP CEO, John Brown gave a pioneering speech, announcing BP's decision to accept that climate change is occurring and its intention to do something about it.

This move created BP a lot of attention from the world's media, environmentalists and politicians. BP was the first multi-national to make such a stand. It committed to reducing greenhouse emissions and to joining international efforts in minimising greenhouse emissions. Solar energy was officially made a priority, on a par with BP's three other business ventures: exploration, oil and chemicals.3 In-house, BP's 'upward feedback strategy', was designed to create a greater sense of job satisfaction for employees while working in harmony with the company's growth.

Senior management was determined to achieve a more open style in the workplace; based on committed teams engaged in open, honest communication to plan and achieve corporate,