by Jim J Jones

Created on: May 06, 2010

British Petroleum, or BP as it has rebranded itself in an effort to move the focus away from its petroleum work, is the third largest energy company in the world, as well as the fourth largest company. It is the largest corporation in the United Kingdom, and it operates out of headquarters in London, England.

British Petroleum is highly vertically integrated, meaning that it has bought up both the companies that it buys supplies from, and the companies that it sells its end products to. It is one of the six "supermajor" vertically integrated energy firms, along with Shell, ConocoPhillips, Chevron, ExxonMobil, and Total S.A. It controls every stage of the oil production process, from the drilling for oil to the sale of it at your local gas station.

The company started when the Iranian Shah gave a British entrepreneur exclusive rights to certain oil fields, and this same man then lobbied the Birtish government for personal control of the resulting wells. Although its principal operations would remain in Iran for the next few decades, British Petroleum would be sufficiently insulated from its eventual eviction from Iran (when the Ayatollah took over) by its other holdings that this would prove little more than an annoyance, and a temporary one at that.

Over the course of the 1980s, the British government gradually sold off its stake in British Petroleum, as part of Margaret Thatcher's policy of privatizing government held assets. This had the unfortunate consequence of very nearly allowing British Petroleum to be taken over by the Kuwait government's oil company, which initiated a hostile takeover bid against the newly privatized energy company. Strong British government opposition eventually overcame the takeover bid.

When Standard Oil of California merged with Gulf Oil, antitrust law required that the newly formed company (Chevron) was forced to sell of many of Gulf Oil's assets. British Petroleum pounced on this opportunity to grab a stake in the previously tough-to-enter American oil market, by buying up various assets, including a refinery that Chevron sold.

As it has grown, BP has also diversified, spinning off into other energy industries, so as to insulate itself from sudden fluctuations in the price of oil. In fact, it eventually got to the point where it intended to spin of its oil related businesses into a distinct division of the BP Group, rather than keeping it as the core business of the entire company. Its new ad slogan, "Beyond Petroleum" is thus fitting.

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