Presentation

Alex HamidPatrick HatcherKirsty HollandClare HuntRebecca JonesTimothy MasonJamie McGuiganKieren Milne

• About BP• Products and Services• Core Functions• Integration of core functions • Recommendations• Recommendations in alternative sector• Conclusion• References

About BP‘BP is one of the world's leading international oil and gas companies, providing its customers with fuel for transportation, energy for heat and light, retail services and petrochemicals products for everyday items’ Our history is full of discoveries, starting in 1908 with oil found in a rugged part of Persia after a long and difficult search. Since then, discoveries large and small (and sometimes just in the nick of time) have fuelled our progress.What we do:• Find oil and natural gas• Extract it from hard to reach places• Move it from land to sea• Make useful products from it• Also generate low carbon power• Try always to work safely and responsibly• Building construction facilities

Product and service development

Future Product & Service Development

Artic Exploration in Russia• Potentially a very lucrative place for oil.• BP had plans to share swap with Roseneft.• AAR objected saying it broke an existing contract.• A new plan agreeable to both AAR and BP has been drawn up.• Currently waiting for word back from Roseneft.

Making biodiesel from sugars• Aim is to create Sugar-to-diesel technology.• Joint development with Martek Biosciences Corporation.• It has the “potential to deliver economic, sustainable and

scaleable biodiesel supplies” (BP, 2011).

Operations

• “Operations transform resource or data inputs into desired goods, services, or results, and create and deliver value to the customers.”

• “They plan our use of assets and ensure maintenance schedules are maintained. Operations is the backbone of a global energy business – and the key to turning our resources into products that meet the increasing demand for energy” (BP, 2011).

Operations and the Oil Spill

• The oil rig construction began on 1st December 1997 in South Korea.

• On 18th July 2010 BP told owner of Deepwater Horizon rig to overhaul blow-out preventer, a crucial safety device. Device subsequently failed to activate

The Future of Operations

• Stricter operations in the future• Developing Operating Management System

(OMS)• A six point plan including Control of Work and

Integrity Management Standards (BP, 2011).

Planning and project management

• Project management is the planning, organizing, directing and controlling of company resources for a relatively short-term objective that has been established to complete specific goals and objectives.

(Kerzner, 2009)

Project Management and the Oil Spill

• Contingency plan drawn up to deal with any oil spills

• “due to the distance to shore (48 miles) and the response capabilities that would be implemented, no significant adverse impacts are expected” (BP, as cited in The Guardian, 2010)

• Crisis planning must be intensive and rigorous• 86 major projects across 26 countries

HR• BP has almost 80,000 employees. • HR professionals act as business partners. Some deliver

strategic guidance. Others support the day-to-day needs of managers and employees.

• Efficiency holds the key to what HR can achieve and BP invests in systems, data and core processes like governance, policy and compliance.

HR and the Oil Spill

• Brought in 48000 people, trained 100000 people in readiness to support response, contracted 11000 vessels to help clean up the oil spill and to stop it.

• No Bonuses for BP executives involved in the Oil Spill – Bob Dudley the chief executive will also miss out on a bonus payment as well as his predecessor and BP’s former head of exploration and production.

Other HR commitments and the future

• BP also focuses on the future employees• "We want to attract people with ideas to prevent this [sort of]

incident happening. From a personal ambition point of view of anyone thinking of career in the industry, these are the challenges that we want people to be able to prevent and deal with.“

• HR professionals have to put together the plans that will recruit, retain and reward people who can keep BP ahead of the global energy challenge.

Marketing

Marketing is “the whole business seen from the point of view of the final result” (Drucker, 1954).Marketing at BP:• Marketing teams complete research,

formulate plans and deliver communications that make the brands and products stand out

• Working in a very competitive global marketplace (BP, 2011 [online])

Marketing in oil spill

• The face of BP during the oil spill• Taking responsibility• BP loses brand reputation• Release of adverts for anniversary of Oil Spill

(UK Marketing News, 2010)

Future of marketing for BP and other implications for marketing functions

• BP may have to have more concentration on people element of marketing mix.

• BP have to be able to answer questions regarding the future of oil and how they plan to sustain the market.

Finance

• Finance has to link to every other function in the business because everything that is done costs money.

• It is down to the financial departments in BP to decide whether the business can afford to do certain things, such as new projects.

Finance and the Oil Spill

• By law, BP could face fines up to $17.6bn for the 4.1 million barrels spilt. (Telegraph, 2010).

• Compensation costs escalating, BP’s facing a bill of up to $34bn. (Guardian, 2010).

• Shares in BP rise by 8p a day. • Estimated cost of oil spill rises to $40bn. (Guardian,

2010).• 2011 – BP recovering from the oil spill, with their

share price rising. (Guardian, 2011).

Other Financial Implications for BP

• The world demand of oil is forecast to grow.• Since the Libyan civil unrest first broke out,

Brent crude oil had risen from around $80 to over $120 a barrel before the recent sell-off

IT

Present day BP and their IT functions. • It is important that BP and any other Oil

distributing company keeps their files secretive. While allowing the public to see everything they need to assess the strength of the business.

• Being able to distribute oil holds a lot of responsibility as oil is a lifeline to nations, companies and people all over the world.

The Future of BP

• In the event of lack of oil in the future all the utilities companies will be dependent on different sources of energy.

• Other oil companies such as Fluor Daniel are investing in a new biofuel scheme called Greensky.

• BP is working with the ongoing use of liquid gas. This liquid gas makes fuel easier to transport and more efficient to store.

Strategic development and policy

• Martek and BP create Joint Development Agreement (BP, 2011).

• “I always saw it as 'greenwashing,' as it has proven to be," says Seattle-based environmental activist Fred Felleman” (Deneen, 2010)

• BP recognises the world's growing need for energy and aims to produce it affordably with minimum impact on the planet, without damaging the environment

Strategic Development and the Oil Spill

• - Contain it on the surface• - Dilute and disperse it into less sensitive areas, • - Remove it from the water.

• Commits up $1 billion to projects that will restore the Gulf. Spent $17.7 billion as of Dec 2010.

Today and into the Future of Strategic Development

• 2011 March – Plans to acquire majority control of Brazilian ethanol and sugar producer CNNA

• In the next 50 years the global population will grow by at least 60%. To stand still in unit terms, global gross domestic product must also increase by 60% by 2050

The Integration of Core Functions

• Products and services require marketing to be determined.

• Operations will have an implication on future projects and the process of current ones.

• Information Technology links into the development of new products and services.

Recommendations

• BP need to repair their image with the rest of the world

• BP need to start looking into diversifying their market

Recommendations if in the Public Sector

Analysis: • More of a matter of geopolitics• More global and national, rather than localEvaluation: • Functions would be biggerRecommendations:• More about talking to the public

Conclusions

• Currently working towards making sure another disaster doesn’t occur

• They are currently merging with environmentally conscious firms to improve their image

• BP have one of the most diverse development portfolios in the world

• The oil industry will have to consider the implications of consumers view on the environmental impact of oil exploration

LoNGSTEEP References • BBC News (2007) Oil Markets Explained, 18th October [online], Available from:

http://news.bbc.co.uk/1/hi/904748.stm [accessed: 12/05/11]• BP (2011) BP in Pakistan [online], Available from: http://www.bp.com/sectiongenericarticle.do?

categoryId=178&contentId=2000659 [Accessed: 12/05/11].• BP (2011) Changing Minds, Changing Attitudes [online], Available from:

http://www.bp.com/genericarticle.do?categoryId=9012063&contentId=7048804 [Accessed: 12/05/11].• BP (2011) Late Century [online], Available from: http://www.bp.com/sectiongenericarticle.do?

categoryId=9014444&contentId=7027525 [Accessed: 12/05/11].• Hutton, W. (2011) The country needs an economic vision, but who will provide it?, The Guardian Online,

8th May 2011 [online], Available from: http://www.guardian.co.uk/commentisfree/2011/may/08/will-hutton-economic-policy-wrong [Accessed 12th May 2011]

• Knight, L. (2011) Commodities plunge: Blip or turning point?, BBC News Online, 6th May 2011 [online], Available from: http://www.facebook.com/home.php?sk=group_125569617515403&ap=1 [Accessed 12th May 2011].

• Marcus, J, (2011) Libya stalemate leaves NATO without 'Plan B' BBC News Online, 11th May 2011 [online], Available from: http://www.bbc.co.uk/news/world-africa-13358885 [Accessed 12th May 2011]

• OPEC (2011) Monthly Oil Market Report [online], Available from: http://www.opec.org/opec_web/static_files_project/media/downloads/publications/MOMR_April_2011.pdf [Accessed: 12/05/11].

Product and services references• BBC News Online. (2011)BP moves closer to Arctic exploration in Russia, BBC News Online, 6th May 2011

[online], Available from: http://www.bbc.co.uk/news/business-13315621 [Accessed 12th May 2011].• BP Website. (n.d.) Biofuels for the future, Making biodiesel from sugars, [online] Available from:

http://www.bp.com/sectiongenericarticle.do?categoryId=9030052&contentId=7055186 [Accessed 12th May 2011].

• BP Website. (n.d.) BP at glance, [online] Available from: http://www.bp.com/sectiongenericarticle.do?categoryId=3&contentId=2006926 [Accessed 12th May 2011].

• BP Website. (n.d.) Our Brands [online], Available from: http://www.bp.com/extendedsectiongenericarticle.do?categoryId=9&contentId=7046348 [Accessed 11th May 2011].

• BP Website. (n.d.) Products and Services, [online], Available from: http://www.bp.com/productsservices.do?categoryId=37&contentId=2007985 [Accessed 11th May 2011].

• Mason, R. (2011) Gulf of Mexico oil spill: BP's Doug Suttles to retire, The Telegraph Online, 12th Jan 2011 [online] Available from: http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/8256006/Gulf-of-Mexico-oil-spill-BPs-Doug-Suttles-to-retire.html [Accessed 12th May 2011].

• Mervin, J. (2011) Counting the cost of the BP disaster one year on, BBC News Online, 20th April 2011 [online], Available from: http://www.bbc.co.uk/news/business-13120605 [Accessed 12th May 2011]

Operations references• BBC News (2011) US Oil Spill: ‘Bad Management’ led to BP disaster [online] Available from:

http://www.bbc.co.uk/news/world-us-canada-12124830 [Accessed: 11th May 2011]. • BP (2010) Containing the leak [online] Available from:

http://www.bp.com/sectiongenericarticle800.do?categoryId=9036583&contentId=7067603 [Accessed: 11th May 2011].

• BP (2011) Engineering and Operations [online] Available from: http://www.bp.com/sectiongenericarticle.do?categoryId=9015395&contentId=7028040 [Accessed: 3rd May 2011].

• BP (2011) Moving to operations excellence [online] Available from: http://www.bp.com/sectiongenericarticle.do?categoryId=9019310&contentId=7035202 [Accessed: 11th May 2011].

• BP (2011) Operations [online] Available from: http://www.bp.com/sectiongenericarticle.do?categoryId=9025272&contentId=7058313 [Accessed: 3rd May 2011].

• Business Dictionary (n.d.) Operations [online] Available from: http://www.businessdictionary.com/definition/operations.html [Accessed: 3rd May 2011].

• The Telegraph (2011) BP's Gulf of Mexico oil spill bill could hit $60bn [online] Available from: http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/8462057/BPs-Gulf-of-Mexico-oil-spill-bill-could-hit-60bn-Moodys-warns.html [Accessed: 10th May 2011].

Planning and project management references

• BP (2011) Natural Resource Damage Assessment [online], Available from: http://www.bp.com/sectiongenericarticle800.do?categoryId=9036590&contentId=7067591[Accessed: 16/05/11].

• BP (2011) USA Landfill to Gas [online], Available from: http://www.bp.com/sectiongenericarticle.do?categoryId=9036938&contentId=7068102 [Accessed: 16/05/11].

• Clarke, A (2010) BP contingency plan for dealing with oil spill was riddled with errors, The Guardian, 9th June 2010 [online], Available from:http://www.guardian.co.uk/environment/2010/jun/09/bp-oil-spill-contingency-plan [Accessed: 16/05/11].

• Kerzner, H. (2009) Project Management: A Systems Approach to Planning, Scheduling and Controlling, 10th ed., New Jersey: Wiley

• Lansons Communications (2010) BP Deepwater Horizon oil spill - One year on [online], Available from: http://www.lansons.com/pages/bp-deepwater-horizon-oil-spill-one-year-on [Accessed: 16/05/11].

• McKie, R (2010) Gulf oil spill at Deepwater Horizon threatens $8bn clean-up and an ecological oil slick disaster for the US, The Guardian, 2nd May 2010 [online], Available from: http://www.guardian.co.uk/environment/2010/may/02/bp-oil-spill-costs-impact [Accessed: 16/05/11].

HR references

• BP (2011) Human Resources [online] Available from : http://www.bp.com/sectiongenericarticle.do?categoryId=9025266&contentId=7058308 [Accessed: 16/05/11]

• The Telegraph (2011) BP ranked high for employer branding despite oil spill [online], The Telegraph, 17th March 2011, Available from : http://www.telegraph.co.uk/finance/jobs/hr-news/8163571/BP-ranked-high-for-employer-branding-despite-oil-spill.html [Accessed: 16/05/11]

Marketing references

• BP (2011) Job Categories, [online] Available from: http://www.bp.com/subsection.do?categoryId=9023444&contentId=7058442 [Accessed: 12/05/11]

• Drucker P (1954), The Practice of Management, New York: Harper & Row

• UKMarketingNews (2011) Anniversary of Oil Spill Marked with Advert [online], 12th April, Available from: http://www.ukmarketingnews.com/bp-marks-anniversary-of-gulf-oil-spil-with-advert/ [Accessed: 12/05/11].

Finance references• BP leak the world’s worst accidental oil spill (2010), The Telegraph, 3rd August [online],

Available from: http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/7924009/BP-leak-the-worlds-worst-accidental-oil-spill.html [Accessed: 10th May 2011].

• BP (2011) Clean Energy: Facing the Future A ten year R&D Program, BP [online]. Available from: http://www.bp.com/sectiongenericarticle.do?categoryId=9011368&contentId=7025852 [Accessed: 10th May 2011].

• BP (2011) First Quarter 2011 Results, BP [online]. Available from: http://www.bp.com/liveassets/bp_internet/globalbp/STAGING/global_assets/downloads/B/bp_first_quarter_2011_results.pdf [Accessed: 11th May 2011].

• Bryant, B. (2011) Deepwater Horizon and the Gulf Oil Spill – the key questions answered, The Guardian, 20th April [online], Available from: http://www.guardian.co.uk/environment/2011/apr/20/deepwater-horizon-key-questions-answered [Accessed: 10th May 2011].

• Pulham, S., Hilaire, E., Fenn, C. (2010) BP Oil Spill: An Interactive Timeline, The Guardian, 28th September [online], Available from: http://www.guardian.co.uk/environment/interactive/2010/jul/08/bp-oil-spill-timeline-interactive [Accessed: 10th May 2011].

IT references• BP (2011) IT&S [online], Available from:

https://www.bppassport.com/ [Accessed: 16/05/11]• GreenAir Communications (2010) Solena and Rentech to

partner on synthetic fuel technology for Europe's proposed first sustainable jet fuel facility [online], Available from: http://www.greenaironline.com/news.php?viewStory=1093 [Accessed: 16/05/2011].

• Sylvia Pfeifer (2010) New Chief revamps BP Safety operations, The Financial Times[Online]http://www.ft.com/cms/s/0/7face996-cba6-11df-a4f5-00144feab49a,s01=2.html#axzz1MVDtxkWf [Accessed; 15/05/11]

Strategic development and policy references

• Deneen, S (2010) BP before the oil spill: An environmentally friendly company? [online], Available from: http://www.walletpop.com/2010/06/11/bp-before-the-oil-spill-an-environmentally-friendly-company/?icid=sphere_searchsphere_news [Accessed: 16/05/11].

• BP (2011) BP and Martek Biosciences Enter a Joint Development Agreement to Deliver Advanced Biodiesels [online], Available from: http://www.bp.com/genericarticle.do?categoryId=2012968&contentId=7055476 [Accessed: 16/05/11].