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BP - an international company, having operations in 100 countries on six continents.

Extracts from this essay...

Introduction

INTRODUCTION "In the modern world social progress rests on economic development. This, in turn, depends on energy"1. In an industry notable for efficiency and advanced technology, the British Petroleum (BP) group stands out as a complete provider of energy and petrochemicals. BP owes its origin to one man, William Knox D'Arcy, who, shortly after the turn of the century, invested time, money and labour in the belief that worthwhile deposits of oil could be found in Persia (now known as Iran). BP p.l.c. is the holding company of one of the world's largest petroleum and petrochemicals groups with headquartered in London- United Kingdom. Their main activities are exploration and production of crude oil and natural gas; refining, marketing, supply and transportation; manufacturing and marketing of petrochemicals. They also have a growing activity in gas and power and in solar power generation. The BP of today is an international company, having operations in 100 countries on six continents. BP has well-established operations in Europe, North and South America, Australasia and Africa. It supports all its businesses with high quality research and technology. Their sales revenues, market value, petrochemical facilities and oil and gas reserves make BP one of the three largest integrated energy companies in the world. As an important of this company, on this assignment, the BP Company and its business environment will be carefully investigated. THE NEAR ENVIRONMENT The near environment is the immediate market or industry in which the firm operates 2 so that the gas and oil markets and industries that the company competes in will be highly considered. "BP itself has changed enormously in the last five years, and is now a new company. It incorporates the heritages of the various enterprises that have come together to establish a base from which they can compete and grow in the global energy market. That growth will bring more change"3. Their marketing business has grown to around 22 billion cf per day they currently enjoy top tier positions in both the North Americans and UK markets.

Middle

The new joint venture is as the transaction as a major strategic step into a country with massive oil and gas reserves and immense potential for future growth. A relative factor endowment is another theory that was developed by Eli Heckscher and Bertil Ohlin. It stated that a country would have a comparative advantage in producing products that intensively use resources it has in abundance.15 BP Company has used this theory completely in a lot of countries that they invested on it. For example, Vietnam has a comparative advantage in gas industry and BP has been exploring for gas in Vietnam since 1989. They are also leaders in a project to use offshore supplies of gas to generate affordable electricity as a major contribution to national economic development. Also in China, BP Company has placed big head offices and firms there to make the best of using human power of the country with the biggest population on the world. * PESTEL: 1. Political: An important part of any business decision is assessing the political environment in which a firm operates. BP is an international company that must be experienced international business engage in political risk assessments. They work within the law in every one of the 100 countries in which the company operate. Like we know, BP is a player major in the US oil and gas industry so that after September 11th 2001 some problems has came to the company like: disrupted production, the security and managerial costs increased rapidly, whilst productivity was lower... Besides that, many company businesses are located where conflict is still active or the locality is suffering the aftermath of war. Armed conflict, despite the provisions of the international humanitarian law, can often involve lawlessness and threaten the security of the company staff and the communities close to their business location. For instance, BP operations take a place in Casanare that is a difficult environment to work.

Conclusion

The aim was to improve economic stability and promote trade. In a small aspect of this assignment, we are going to consider the role of WB affect upon BP. The WB has used the UK as a positive precedent for privatisation without properly interpreting the UK record. Whilst many people included BP Company accept, with the Bank, that there have been some benefits from UK privatisation, i.e. Price reductions, efficiency gains and investments in environmental protection, more controversial aspects have been overlooked or downplayed. Besides UK, BP and the WB are discussing the possibility of arranging a loan to bring money for education and health programs to the Indonesian province of Papua23. BP has formally asked for funding from the WB and other IFIs for its controversial new Caspian oil pipeline. Besides these factors above, BP is also as referred as the geocentric- world orientation company while the head office establishes universal policies. As a big oil and gas company, BP is also trying to seek the efficiency so that it will satisfy the activities of the company. CONCLUSION British Petroleum Company has been investigated on the near and far environment very clearly on this assignment. From the assignment, we can relatively consider the energy and gas; and oil industry and market that the company competes in. Also in the far environment, the company is highly contemplated through international trade theories such as comparative advantage and a relative factor endowment; the force shaping the international business; PESTEL factors which included clearly examples; international trade blocks such as OECD countries; the role of IFIs and some aspects of BP business environment that we could think is important. BP business is strong, the company is soundly managed, and their people are determined to be the best in their field. However, the company has to look at some problems that will occur when they are doing their business. As things that would be considered on this assignment, BP is referred to one of the biggest energy company in the whole global.

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