The debate has raged for years about integrated oil companies – and whether having both an Upstream and a Downstream really works. BP Magazine sits down with the company’s segment leaders Bernard Looney and Tufan Erginbilgic to discuss why having both parts matters, how sharing the science behind operations can unlock solutions, and what advantages learning from the inside can give you in a highly competitive industry
BP has long called itself an integrated energy company. Why does that still matter today?
Tufan Erginbilgic: One obvious reason is that our industry is pretty cyclical. If you’re an integrated company, with an Upstream and a Downstream, then you are financially much more robust to that cycle. That’s why in our strategy we talk about a balanced portfolio.
Bernard Looney: The idea of integration has been around for a long time, but I think the drop in the oil price has really brought the advantages into sharp relief and it shows us just how important the downstream is. It has carried the company over the past couple of years.
There is a real sense of urgency in the Upstream about our approach to the abundance of hydrocarbons, climate change, government policy and the rise of renewables. There are a lot of moving parts to the energy transition that’s underway and we must adapt to build our competitiveness and our resilience and grow the business.
"The idea of integration has been around for a long time, but I think the drop in the oil price has really brought the advantages into sharp relief"Bernard Looney, chief executive Upstream
Having our two segments work together more to do things better, is a real opportunity. I have a list of examples a mile long where we would not have been as good at what we are doing in the Upstream had we not worked with Downstream teams. We’ve talked about it in the past but not always meant it. Now, we’re starting to see some real traction.
Tufan Erginbilgic: I could not agree more. There are a number of areas where we are learning from each other more than ever, such as safety. It makes absolute sense for us to share lessons learned on incidents and the introduction of our company-wide health and safety reporting system will continue to help facilitate that. Then, we’re working together on corrosion management and learning about human performance when carrying out safety tasks.
Can you give a practical example of the crossover between the two segments?
Bernard Looney: One that springs to mind relates to asphaltenes. These are sticky deposits that can form in oil and gases in flow lines, blocking pipes and restricting oil flow. They can cause very expensive problems.
By talking to the lubricants team we realised that they spend their whole life trying to figure out how to get a molecule of lubricant to stick to the wall to control friction by a precise amount.
What we’re trying to do is the reverse, so, if you understand the science of making something stick, then you have a great head start in understanding the science of making it not stick.
Tufan Erginbilgic: It is all about mutual respect between the segments. Bernard and I will never know all the questions or the possibilities that might be unlocked by bringing our teams together. But what we can do is lead our businesses in a way that encourages our people to want to learn from each other. I don’t think we’ve always looked within the company for those opportunities. In Downstream, we might look at other retailers, or Bernard might look at other production companies, but what he and I want to do is create the sort of leadership that encourages our people to also look inside and learn from each other.
What can you two do personally to inspire and motivate others across your teams to do that?
Tufan Erginbilgic: It starts with the small things, such as having our teams sit alongside each other in our headquarters, or joining each other’s presentations. Our global head of operations for the Upstream, Fuzzy Bitar, has joined our downstream Safety and Operational Risk committee – when our operational guys see him participating it encourages them to get out and talk to their Upstream counterparts. And it’s always about talking to each other about what we’re working on and looking for opportunities to share. Another great example is the relationship Bernard has with General Electric (GE) to harness digital technology in the Upstream. As soon as it was announced, I said I want to talk about how we use that in the Downstream. You don’t have to be highly structured about this, you just need to use every opportunity you can to demonstrate to your team the breadth of skill that we can tap into and avoid reinventing wheels.
How is integration helping BP to realize its strategic goals?
Tufan Erginbilgic: I think it’s early days yet, but I do believe that creating the natural linkages we have been talking about will support the agenda to become more resilient, adaptable and competitive. It will help us not just to transfer knowledge in specific areas but to create a whole new mind-set. If you have the right mind-set, especially organizationally, I believe you are halfway to success. But it has to be for a purpose. I don’t want my organization to be excellent in everything, only in the things we choose to go after.
Bernard Looney: That’s what successful organizations do. You need people who have an eagerness, a drive, an attitude simply to make their company better and are willing to take an idea from wherever they found it. You’re not looking for perfection and sometimes you have to be willing to fail. It’s about having a mind-set that focuses on continually looking for ways to make the business better.