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British Petroleum Company’s Strengths and Weaknesses


One of the premier energy companies of the World is British Petroleum. “It is the fourth largest company in the whole World. In the energy sector BP is the third largest company of the World” (Bamberg, 2008). One of the most prolific companies of the world, BP has its own strengths and weaknesses. In this essay we will discuss about these points (Ferrier, 2006). At first, we will discuss about the strengths and then the weaknesses of the company.


William Knox D’Arcy discovered crude oil in Middle East, especially Persia in the year 1908, and it was the first instance of discovering oil in the Middle East. The oil thus founded was managed by a company called The Anglo-Persian Oil Company, founded in the year 1909. In the year 1951, Iraq went on nationalize the oil industry. Later the company was renamed as BP. BP at that time expended in many parts of the Middle East Asia and Canada among other regions of Africa and Asia (Bamberg, 2004). The British Government has sold all its share of the company in the year 1987, and now it is a privately managed company. The company has made a number of acquisitions in recent times and they are also in the middle of some ongoing conflicts and the recent of the conflicts is the Deep Horizon Oil Spill Controversy (Bamberg, 2008).

Strength of British Petroleum

The current status of British Petroleum is of a multinational oil company. “This is one of the three largest companies in the World” (Bamberg, 2008). It generates fuel, energy and petrochemical products. More over it, it also provides retail services all over the World in the fields. The operation of British Petroleum is spread across 70 countries throughout the World. It even has a subsidiary that has business dealing with alternative energy sources. In the year 2004 the company earned total revenue of US$ 246.4 billion as estimated. The company has some very important corporate partnerships in the modern World (DeRouen, 2005). The company has alliance with General Electric, and their main concern is to develop hydrogen power plants and the technology needed for this. The power plants will be established in Scotland and California. It has also had a deal with DuPont to develop bio-fuels. BP is enlisted in London Stock Exchange and New York Stock Exchange. It is also included in the FTSE 100 index. The company has a brand name that is recognized throughout the World. All these qualities make the company a very important player in the Global Market (Bamberg, 2008).


There are a few weaknesses of the company that we can mention in this aspect. In the weaknesses, we have to mention that the company has a linked with a number of controversies in recent times, and they have been also in a number of controversial business projects too. Some of the businesses and other faults of the company have really angered the environmentalists, and they have strongly rallied against those steps. If we look at the context of United Kingdom alone, we will have to say that BP is solely responsible for the increase of the price of petroleum products in the part of the World. Also, they were criticized as they went on to close Alaskan oil wells (Meyer, 2008).

Moreover there are controversies surrounding the security of the firms owned by the company. The controversies further fueled when there was an accident took place in a BP controlled Texas oil refinery that caused more then 10 deaths and a number of injuries. In many parts of the World oil spills happened a number of times and all of the oil wells had BP’s name associated with it, like Prudhoe Bay and Deepwater Oil spill etc. Once, due to the failure of the company 270000 gallons of crude oil were spread in the Alaskan tundra areas and hugely affected the atmosphere. This even went to a court and the company faced with criminal charges (Nersesian, 2006).

SWOT analysis

If we go for a SWOT analysis of the company, we will see that:


The market position of BP, mainly in United States and Europe, is one of the most important factors of the continuous growth of the company. Additionally, the company is hugely successful in exploration of the oil products. This is the most important part of the company (Holland, 2007).


The company has suffered from huge loss in some of the projects, like the recent Thunder Horse project. This has resulted in huge loss of investment along with market position. Another very important aspect of the company is that it is being said that the safety provisions of the company is not up to the mark in any case. This is one of the major drawbacks of the company (Holland, 2007).


But still there are a lot of opportunities that the company can look forward to. In international market, as more and more players are appearing the field of aviation, the demand for aviation fuel is growing with time. This is one of the most important sources of business for the company. And the researches say that the market for LNG will grow in demand after 2010, and it is also very important news for the company. The company has launched flexible price policy in recent times only to compete with the corporate rivals. They have also extended their work area in The North Sea area which is said to be one of the biggest sources of oil and natural gas. Also the company is in talks to expand their business into the countries that were earlier under Soviet Union, so there can be a huge rise in the production for BP in recent times (Meyer, 2008).


The threats like breaking of the environment policies and occasional explosions in the BP backed oil refineries have always caused troubles for the company. Two of their biggest rivals, Shell and Chevron are also deploying different policies to stay in the market in a big way. Sometimes the price of barrels of the company creates confusion in the market (Holland, 2007).


Still BP is one of the biggest players in the market. There are some weaknesses of the company, but the weaknesses can be looked after. We can say that the last explosion in a BP backed refinery happened in the year 2005, so they have surely developed in the aspect. The company will surely rise in business prospect in recent future.


Bamberg, J. (2004). The History of the British Petroleum Company: The Anglo-Iranian Years, 1928–1954. Cambridge: Cambridge University Press. ISBN 0521259509.

Bamberg, J. (2008). The History of the British Petroleum Company: British Petroleum and Global Oil: The Challenge of Nationalism. Cambridge: Cambridge University Press.

DeRouen, K. (2005). Defense and security: a compendium of national armed forces and security policies. New York: ABC-CLIO.

Ferrier, R.W. (2006). The History of the British Petroleum Company. Cambridge: Cambridge University Press.

Holland, G. (2007).The Hydrogen Age: Empowering a Clean-Energy Future. London: Gibbs Smith.

Meyer, K. (2008). Kingmakers: The Invention of the Modern Middle East. New York: W.W. Norton.

Nersesian, R. (2006). Energy for the 21st century: a comprehensive guide to conventional and alternative sources. Boston: M.E. Sharpe.


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