The British Petroleum Company: Target Markets

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The British Petroleum Company: Target Markets

BP plc (formerly known as The British Petroleum Company plc) is a UK-based gas and oil company. It has been around for 100 years and is still expanding into new markets (#24 BP, 2019). BP plc operates in every part of its home country, the United Kingdom. It sells fuel through over one thousand service stations across the kingdom that weekly reach seven million customers (BP, n.d.). In its home country, BP plc is a major employer: 15,835 people work for the corporation directly, and 123,000 jobs in total are supported by BP in one way or another (BP, n.d.). BP hires a wide range of high-skilled professionals from rig technicians to retail assistants and well intervention engineers.

BP makes significant contributions to UK GDP, which in recent years has amounted to £10.3 billion or 0.5% (BP, n.d.). BP plc remains one of the most important investors in the North Sea, which promotes UK energy security (BP, n.d.). Today, there are around 120 sites with 260 operating wells in the United Kingdom located primarily in southern England, the Midlands, South Wales, and central Scotland (#24 BP, 2019). Daily, they produce between twenty and twenty-five thousand barrels of oil equivalent.

BPs primary contender is Royal Dutch Shell, a British-Dutch oil and gas company headquartered in the Netherlands and incorporated in the UK. Over its century-long history, Royal Dutch Shell has expanded into 78 countries (#9 Royal Dutch Shell, 2019). Currently, Royal Dutch Shells activities can be categorized into four business groupings: upstream business, integrated gas and new energies, downstream business, and projects and technology (#9 Royal Dutch Shell, 2019). In Africa, Algeria, RDS is doing upstream business in Cameroon, Egypt, Algeria, Gabon, Ghana, Libya, Morocco, Nigeria, Tunisia, and South Africa. In Asia, RDS is active in China, Hong Kong, Brunei, Malaysia, Singapore, Philippines, and India. Among European countries, the British-Dutch company is operating in Ireland, the UK, and Nordic countries. Lastly, RDS is present in North America (the US and Canada) and Australia.

BPs target markets largely overlap with those of Royal Dutch Shell; however, there are significant differences as well. In Europe, BP is operating in far more countries than RDS, which includes the United Kingdom, France, Germany (through the Aral brand), the Netherlands, Switzerland, Italy, Austria, Poland, Greece, and Turkey (BP, n.d.). On the contrary, as compared to RDS, BP is not present in Nordic countries. BP has expanded into South America (example: Brazil and Trinidad and Tobago), which RDS has yet to do (BP, n.d.). Both BP and RDS are present in the US, Canada, and Australia (BP, n.d.). Among other overlaps in operating countries are Egypt in North Africa and China and India in Asia (BP, n.d.). In contrast, RDS is not active in Angola, where BP is involved in offshore oil development at a total of nine oil exploration and production blocks.

Being some of the largest oil and gas companies in the world, BP and Royal Dutch Shell offer full-cycle solutions, which is especially important when it comes to emerging economies. Both BP and RDS have business groupings that include upstream and downstream activities as well as search for new energies, projects, and technology. Some operating countries are involved in the full cycle, while for others, it makes sense to focus primarily on only one aspect (example: upstream business in Algeria). While RDS outpaces BP in producing capacity, BP stands out due to its efficiency and superior refining availability (Vara, 2019). According to Vara (2019), BPs upstream operations show better cost efficiency. Its ten-year average upstream unit production cost is 20% less than that of Royal Dutch Shell: $9.46bn per barrel of oil equivalent vs. $11.64 respectively. Apart from that, BPs refining availability is somewhat higher compared to Royal Dutch Shell: 94.87% and 91.66%.

References

#24 BP. (2019). Forbes.

#9 Royal Dutch Shell. (2019). Forbes.

BP. (n.d.) Who we are.

Vara, V. (2019). BP vs Shell whose business is better and more efficient?

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