British Petrolium

Content

1. Corporate Overview British Petroleum PLC (BP) is a global energy group company providing fuel, energy, petrochemical products and retail services worldwide. It has operations in over 70 countries with businesses spread across Europe, Asia, North and South America, Africa and Australia. 1.1 Corporate History BP originated in 1901, with the first oil exploration in Persia In 1954, the company was renamed British Petroleum. In 2005, BP started its alternate energy business and sold off its derivative businesses. 1.2 Key Facts Revenue (FY2005)-US$246.4 billion Total Assets (FY2005)-US$206.9 billion 1.3 Subsidiaries / Affiliates Subsidiaries Jointly Controlled Entities Associations 1.4 Organizational Chart 1.5 Profiles of Key People Chairman- Peter D. Sutherland Deputy Chairman- Ian Prosser CEO- John Browne CFO- Bryon E. Grote 1.6 Recent Developments In July 2006, BP was awarded three offshore blocks in Pakistan In April 2006, BP started construction of an industrial lubricants blending facility in east China 2. Business Description 2.1 Business Segments Exploration and production Refining and marketing Gas, power and Renewables 2.1.1 Products/Services 2.2 Geographical Segmentation In 2005, the US contributed 32% to the total revenue of BP 2.3 Key Partnerships/Alliances General Electric To develop hydrogen power plants and technology jointly in Scotland and California. DuPont Partnership to produce and develop bio-fuels. 3. SWOT Analysis 3.1 Strengths Strong market position in US and Europe Success in exploration and production 3.2 Weaknesses Thunder Horse project losses Inadequate safety provisions 3.3 Opportunities Increasing aviation fuel demand LNG market demand to grow by 2010 3.4 Threats Losses due to hurricanes Increasing drilling costs in North Sea region 4. Key Business Strategies Expansion Plans in the U.S. Increased Focus on High Quality Refineries Investing in Chinas PTA Market Securing Low Cost Feedstock Huge Investment in Alternative and Renewable Energy Investing in Alternative Fuels - Biofuel Production 5. Financial Performance 5.1 Financial Highlights In 2Q06, BPs revenues witnessed an increase of 24.2% and reached US$72.4 billion from US$58.3 billion in 2Q05. 5.2 Five-Year Financial Summary The revenues of British Petroleum reached US$246.5 billion in 2005 at a CAGR of 9.1% from US$174.2 billion in 2001. 5.3 Ratio Analysis In 2005, gross margins of BP declined to 21.4% in 2005 from 22.5% in 2004 due to weakening of US natural gas prices and lingering operational difficulties in the US downstream business. 5.4 Market Indicators 5.4.1 Stock Chart 5.4.2 Earnings Estimates Due to higher group capex and lower volumes the sales and net income estimates for the company has been lowered till 2008. 6. Competitive Landscape 6.1 Industry Overview 6.1.1 Industry Definition and Segmentation 6.1.2 Key Drivers Growing Global Oil Consumption Increasing Oil Prices 6.1.3 Major Trends Oilfield Technology Trends M&A Activities Alternative Energy Trends Environmental Mandates 6.1.4 Outlook Demand for oil and gas is expected to rise through 2010 at the annual rate of about 2% for oil, and 3% for gas. 6.2 Competition Exxon Mobil Royal Dutch Shell Chevron 6.2.1 Competitive Positioning Exxon Mobil has the most number of brands (9 brands) of petroleum products 6.2.2 Geographical Coverage Among the peers, BP earns most of its revenue from the European market (49.6%), followed by Chevron (48.4%). In 2005, Exxon Mobil derived only 18.5% of its revenue from the European market. Royal Dutch Shell derives 40% of its revenue from the European market. 6.2.3 Client Base Automotive, transportation, aviation, marine and specialized industrial segments comprise the main clientele of BP. 6.2.4 Financial Assessment Royal Dutch Shell witnessed the highest 5year CAGR growth of 22.7% till 2005 among its peers. Exxon Mobil ranked number one among the peers in terms of revenue in 2005. 6.2.5 Stock Market Performance Royal Dutchs stock prices were ahead of its peer group. High demand of gas & power and favorable price led to higher investor confidence in Royal Dutch share prices. 7. Outlook 7.1 Company View BPs Q206 results reflect overall good operating performance and strong upstream and refining margins. The company expects to sustain the growth throughout the year. 7.2 Analyst View BP is expected to move aggressively taking advantage of peak industry conditions. Industry experts predict additional mature assets disposal in the coming years. Appendices Appendix I Income Statement, 2000-2005 Appendix II Balance Sheet, 2002-2005 Appendix III Subsidiaries and Affiliates, 1998-2005 Appendix IV Mergers, Acquisitions & Divestiture, Jan2004-Jun2006 List of Tables/Figures Table 1.1 Key Facts Table 1.2 Subsidiaries Table 1.3 Jointly controlled entities Table 1.4 Associations Table 1.5 Profiles of Key People Table 1.6 Recent Developments (2006) Table 5.1 Financial Highlights (2004-2005) Table 5.2 Operational Performance of BP (2003-2005) Table 6.1 Competitors (2005) Table 6.2 Competitive Positioning (2005) Table 6.3 Client Base Figure: 1.1 Timeline Figure: 1.2 Organizational Chart Figure 2.1 Segment-wise Revenues (2005) Figure 2.2 Exploration & Production Segment Revenue (2003-2005) Figure 2.3 Refining & Marketing Segment Revenue (2003-2005) Figure 2.4 Gas, Power & Renewables Segment Revenue (2003-2005) Figure 2.5 Geographical Segmentation of Revenues for BP (2005) Figure 3.1 Number of Forecourt Shops (2003-2005) Figure 5.1 BP Revenue Growth (2001-2005) Figure 5.2 Operating Income Growth (2001-2005) Figure 5.3 Net Income Growth (2001-2005) Figure 5.4 Growth of Earning per Share (2001-2005) Figure 5.5 Growth in Total Shareholders Equity (2001-2005) Figure 5.6 Profitability Ratios (2004-2005) Figure 5.7 Performance Ratios (2004-2005) Figure 5.8 Stock Performance (Jul2005 to Jun2006) Figure 5.9 Sales & Income Estimates (2005-2008) Figure 6.1 Global Oil Consumption (2001-2005) Figure 6.2 Oil Prices (1998-2005) Figure 6.3 Revenues by Geographic Segmentation (2005) Figure 6.4 Revenues and Growth Rates (2005) Figure 6.5 Net Income and Growth Rates (2005) Figure 6.6 Stock Performance (Jul2005-Jun2006) Figure 7.1 Segment-wise EBIT Estimates (2006-2009)