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Chapter four | |
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 BP's position as an industry leader is due in no small part to our actions as a 'first mover' – first to opportunity, first to market or first to deliver value. We have sought to act first whenever advantageous. By leveraging our strategic insight and rapid commercial execution, we have adapted quickly and have been in the forefront of necessary change. Some cases in point We were at the forefront of the process of restructuring in the oil and gas industry. This enabled us to align our scale and reach with the developing global pattern of energy supply and demand. Our combinations with Amoco and ARCO moved us to become one of the top three in terms of performance, assets and returns to shareholders. We were the first among our peers to respond publicly to the risks of global climate change. And we responded to political developments with investments in China and Russia, areas previously considered inaccessible to our industry. These and other 'first mover' initiatives have enabled BP to capture added value and to develop distinctive positions and reputation. We are determined to maintain the position and momentum we have gained in recent years. Our willingness to think ahead of the curve and beyond the traditional boundaries of our businesses remains as strong as ever. Performing as a 'first mover' is as much a cultural attribute as a conscious choice. We believe it will be instrumental in the next phase of BP's – and our industry's – development.  Investing in Russia Eight years after BP first sent teams to Russia to examine exploration prospects, we begin investment by acquiring a 10% stake in Sidanco. This underscores our belief in the potential of Russia, previously seen as unreachable for political reasons. Taking a stand on climate change In response to mounting evidence and concern about greenhouse gas emissions and the earth's rising temperature, BP becomes the first in our industry to state publicly the need for precautionary action. We take steps on environmental standards, including controlling our own emissions, supporting existing and new scientific work and developing emissions trading mechanisms in-house and with external bodies.  Engaging in large-scale mergers Through our merger with Amoco, we take a major step to becoming a leader in the oil and gas industry. This action is the first in a series of major corporate deals in the sector that will continue for more than two years. The merger gives the combined companies the opportunity to compete with a distinctive set of people, assets and market positions. BP gains Amoco's strength in oil and gas production in North America, and its interests in Egypt, Trinidad, West Africa, Argentina and Azerbaijan. In refining and marketing, Amoco contributes its significant strength in the US to BP's existing positions in Europe, the US and Australia, and in emerging markets.  Anticipating growth in demand for gas BP establishes a gas and power business segment, designed to focus and expand our capability to meet an increasing world demand for natural gas. To help build our position as a leading provider of natural gas for US consumers, to address that country's growing demand and to diversify its sources of supply, BP delivers the industry's first cargo of liquefied natural gas to east coast customers.  Adding scale through acquisitions ARCO joins the BP group to create coast-to-coast coverage of the US fuels market. Strategically, the ARCO deal also represents an opportunity to grow our natural gas business, particularly in the Far East. Together with BP's own production, the Amoco and ARCO transactions create an eight-fold increase in BP's gas production over 10 years. Our acquisition of Burmah Castrol strengthens BP's customer-facing businesses with a world-recognized premium lubricants brand.  Positioning in Germany As part of our strategy to build a strong second leg for the group, BP acquires Veba's retail and refining assets in Germany and central Europe. This makes BP the market leader in Germany and Austria and substantially strengthens our position in Poland and in several other central European countries. BP markets under the well regarded Aral brand in Germany.  Building advantage in Russia BP acquires a 50% stake in TNK-BP, creating a sixth new upstream profit centre. TNK-BP is the third largest integrated oil company operating in Russia. It encompasses the full spectrum of vertical integration, from wellhead to leading positions in the marketing of petroleum products. TNK-BP is comparable in production size to the former Amoco before our merger, and has proved reserves of 3.6 billion barrels, of which 2.8 billion barrels are developed. TNK-BP's portfolio contains eight fields of greater than 250 million barrels, including Samotlor, the third largest oil field ever discovered. |
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