BP Stock

Corporate strategy and future

In mid-2020, BP announced a significant strategic shift towards sustainable energy and reducing its search for oil and gas. It aims to transform from an ‘international oil company’ to an ‘integrated energy company’. The company plans to increase investments in green energy, including in solar and wind energy, bioenergy, hydrogen and investments in carbon capture, utilisation and storage (CCUS). Hydrogen and CCUS are still in their early stages.

By 2030, BP aims to have developed approximately 50GW of net renewable generation capacity, twenty times more than in 2019. Meanwhile, oil production during the same period is set to decrease by at least 40%, equivalent to a million barrels per day less pumped by BP. The company will no longer explore for oil and gas in new countries. This strategy aims to significantly reduce CO2 emissions. BP, along with other oil companies, is increasingly under pressure from investors and activist shareholders to take the climate crisis seriously.

History of BP

The history of BP dates back to May 28, 1901, when British businessman William Knox D’Arcy secured a contract to search for oil and gas in former Persia (now Iran). Seven years later, in 1908, he discovered the first oil in the country. To commercially exploit the oil fields, the Anglo-Persian Oil company was established in 1909.

Later, the name was changed to Anglo-Iranian. Under the influence of anti-British sentiment in Iran, the company's assets were nationalised after World War II. This was followed by a worldwide boycott of Iranian oil. Eventually, a consortium of Western oil companies was granted permission to drill for oil and gas in the country again in 1953. Anglo-Iranian had a 40% stake in this endeavour. Starting from 1954, the company became known as The British Petroleum Company (BP).

After resuming activities in Iran, there was international expansion, with operations expanding to countries such as Nigeria, Trinidad and Canada. In 1965, BP encountered a major gas field in the North Sea and five years later, the first oil was found there. Another significant oil discovery occurred in 1969 in Alaska. This propelled BP into becoming one of the world's largest oil and gas producers. The company's position was further solidified through various acquisitions in the United States, including Standard Oil of Ohio (1987), Amoco (1998) and Atlantic Richfield (2000).

The environmental disaster involving the Deepwater Horizon drilling rig in 2010 marks a dark chapter in the history of the British oil giant. An explosion and fire on the rig resulted in the deaths of eleven people and the release of millions of gallons of oil into the Gulf of Mexico. It was the largest environmental disaster in US history. Beaches were polluted and fishing activities were halted for months. Cleanup costs and damage claims led to a $60 billion loss for BP. To avoid bankruptcy, the company was forced to sell nearly $38 billion worth of assets, including older oil and gas fields.