BP’s marketing and trading business delivers energy supplies around the world, while offering financial services that help investors guard against fluctuations in energy prices. It works with a wide range of companies, as well as other BP businesses, to buy, sell and transport commodities such as natural gas, natural gas liquids, power, crude oil, chemicals, sulphur and refined products.
Because the marketing and trading team is integrated with the rest of BP, the company can maximize the value of its energy resources. For example, the trading group buys crude oil for BP’s refineries and helps them maintain their product inventory levels.
“The integrated approach enables BP to make the most of its energy output,” says Carey Mendes, head of BP’s oil trading business in Chicago. “We help ensure that our company’s refineries and petrochemical plants have the raw materials they need, and then help get their products into the marketplace.”
BP’s two major U.S. trading hubs are located in Houston and Chicago. In an average year, the marketing and trading team completes around 1.2 million transactions in the U.S. and serves about 3,500 customers throughout the country. The business also has offices in Canada and Mexico. In fact, BP is the No. 1 marketer of natural gas in North America, selling enough to meet the combined daily needs of France, Germany, Spain and the United Kingdom.
“Our business spans North America, giving us the scale and flexibility required to ensure reliable natural gas and power supply across the continent,” says Orlando Alvarez, head of BP’s energy marketing and trading business in Houston.
Beyond oil and gas, BP also provides customers with access to renewable energy products. For example, it supplies biogas from residential, industrial and commercial landfill waste to California transit systems. In addition, the company has been active in carbon emissions trading markets since their inception, including the market that took effect in California at the beginning of 2013.
Along with its physical supply and trading operations, BP helps customers hedge against energy price volatility. Indeed, it was the first energy company to register a “swap dealer” — an entity that creates and participates in certain derivatives markets — under the Dodd-Frank Act.
For its industrial customers — including oil and gas producers, refineries, petrochemical plants and power generators — BP provides hedging products and other risk management services that support capital investments and promote long-term economic growth.