Our business model

We provide customers with fuel for transportation, energy for heat and light, lubricants to keep engines moving, and the petrochemicals products used to make everyday items as diverse as paints, clothes and packaging. Our projects and operations help to generate employment, investment and tax revenues in countries and communities around the world.

At each stage of the hydrocarbon value chain there are opportunities for us to create value – both through the successful execution of activities that are core to our industry, and through the application of our own distinctive strengths and capabilities in performing those activities.

Integrated model

Value creation

We seek to add value at each stage of our operations, from exploration to marketing. We believe that by operating across the full hydrocarbon value chain we can create more value for shareholders, as benefits and costs can often be shared by our segments.

Integration also enables us to develop shared functional excellence in areas such as safety and operational risk, environmental and social practices, procurement, technology and treasury management more efficiently.

Finding oil and gas

First, we acquire the rights to explore for oil and gas. Through new access we are able to renew our portfolio, discover new resources and replenish our development options.

Developing and extracting oil and gas

When we are successful in finding hydrocarbon resources, we create value by seeking to progress them into proved reserves or by selling them on if they do not fit with our strategic objectives. If we believe developing and producing the reserves will be advantageous for BP, we will produce the oil and gas, then sell it to the market or distribute it to our downstream facilities.

Transporting and trading oil and gas

We move oil and gas through pipelines and by ship, truck and rail. We use our trading and supply skills and knowledge to find the best routes to deliver supplies to the most attractive markets.

Manufacturing and marketing fuels and products

Using our technology and expertise, we manufacture fuels and products, creating value by seeking to operate a high-quality portfolio of well-located assets safely, reliably and efficiently. We market our products to consumers and other end-users and add value through the strength of our brands.

Our distinctive strengths and capabilities

We consider our areas of distinctive strength to include:
Exploration – acquiring access and searching for hydrocarbons.
Deep water – we have a long track record in finding, developing and producing hydrocarbons in deep water.
Giant fields – managing the scale and complexity of fields with resources believed to exceed 500 million boe.^a
Gas value chains – seeking to add value as gas moves from field to customer.
Downstream – the pursuit of safe, reliable and efficient operations, and leading returns, across fuels, lubricants and petrochemicals.

^a Actual amount of proved reserves of such fields on a basis recognized by the SEC may be less than this.

Our commitments

Keeping a relentless focus on safety is the top priority for everyone at BP. Rigorous management of risk helps to protect the people at the front line, the places in which we operate and the value we create. We often work with partners to mitigate risk or gain from complementary skills. We understand that operating in politically complex regions and technically demanding geographies requires particular sensitivity to local environments.

We believe that the best way to achieve sustainable success as a group is to act in the long-term interests of our shareholders, our partners and society. Through our work we aim to create value for our investors and benefits for the communities and societies in which we operate, with the safe and responsible supply of energy playing a vital role in economic development.

Strong relationships

The relationships we form with shareholders, governments, regulators, non-governmental organizations, local communities, customers, franchisees, partners, contractors, suppliers and others in our industry are crucial to the success of our business. We are committed to building long-lasting relationships, meeting our obligations and acting responsibly

We are seeing an evolution in our industry, with international oil companies such as BP establishing new kinds of partnerships and co-operation with governments, national oil companies and other resource holders. The benefits of our value-creating activity are shared with governments and other partners.

We seek opportunities to develop and deploy distinctive capabilities that complement those of our partners. We also partner with universities and governments in pursuit of improving the technologies available to us, so we can enhance our operations and develop new products. We aim to support and improve standards in our industry by participating in industry bodies, engaging with our peers on important issues, and – where appropriate – setting voluntary standards above those required by current regulation. And we carry out regular reviews and audit processes with contractors and suppliers, which help to maintain strong links across our operations and activities.

Technology

We believe our development and application of technology is central to our reputation and competitive advantage. For us, technology is the practical application of scientific knowledge to manage risks, capture business value and inform strategy development. This includes the research, development, demonstration and acquisition of new technical capabilities and support for the deployment of BP’s know-how.

Our investments are focused on access to resources, process efficiency, product formulation and lower-carbon opportunities. We monitor the potential opportunities and risks presented by emerging science, interdisciplinary innovation and new players; natural resource issues and climate concerns; and evolving policy, including the current emphasis on energy security and efficiency.

Supply and trading

We buy and sell at each stage in the value chain to optimize value for the group, often selling our own production and buying from elsewhere to satisfy demand from our refineries and customers. We also aim to create value through entrepreneurial trading, where our presence across major energy trading hubs gives us a good understanding of regional and international markets.

Our people

We employ nearly 86,000 people, including 14,700 service station staff in Europe and Asia (as at 31 December 2012). The majority of our employees are located in the US and Europe. The qualities and abilities of our employees have a powerful effect on our ability to compete and meet our commitments to investors and the wider world. We provide a range of professional development programmes and training to help our employees develop their skills and capabilities. We are committed to creating an inclusive work environment where everyone is treated fairly, with dignity, respect and without discrimination.

How we are organized

We have two main business segments: Upstream and Downstream. Through these we find, develop and produce essential sources of energy, and turn these sources into products that people need.

In renewable energy, our investments and activities are focused on biofuels and wind. In addition, our emerging businesses and ventures unit invests in a broad range of energy projects and technologies.