I have completed a six week summer internship at BP; BP is one of the world’s six major oil and gas companies. BP operates within the energy and natural resources sector which provide oil and gas all over the world.
The energy sector is very complex and operates in many different steps and there are three major sectors within BP, upstream, midstream and downstream. Upstream is the stage of the production process for example, searching and extracting raw materials. Firstly, the oil needs to be located in order for it to be extracted this is usually done by geologists. They will need to examine rock surface and terrain which is usually done by satellite images to ensure that they will be drilling for oil in the right place. They also use sensitive gravity meters to measure changes in the Earth’s gravitational field and use sensitive magnetometers to measure changes in the Earth’s magnetic field which all indicate flowing oil.
They will also make use of seismology, creating shock waves that pass through hidden rock layers and interpreting the waves that are reflected back to the surface. Seismologists interpret the readings for signs of oil and gas traps and once geologists find a prospective oil strike, they mark the location using GPS coordinates on land or by marker buoys on water. Once the oil and gas is located the land needs to be prepared by clearing and levelling, ensuring there’s a source of water nearby and make a reserve pit which gets rid of rocks and drilling mud to protect the environment. Once this has been done, drilling companies will then drill and pump the oil out of the ground. When the oil is obtained it is sent to a refinery where it is physically, thermally and chemically separated into fractions.
Downstream is the stage in the production process which involves processing the materials collected during the upstream stage to a finish product and also includes the sale of the product. Downstream will create the finish product and then sell it to the public or other businesses. Midstream may also be included as part of downstream operations. Midstream includes, shipping, storing and transportation.
BP provide many resources and services to the public and other businesses. BP are most know for providing petrol and diesel to the public at their BP gas and Petrol stations but also provide fuel for aeroplanes for large airline companies. Not only do BP provide fuel and gas they also manufacture Castrol which is one of the world’s top motor oil and specialist lubricant brands. Aside from this BP also have many other services and brands around the world. In Europe BP own Aral stations which is a fuel station and is the most trusted brand in Germany. Everyday 2.5 million customers visit an Aral station to fill up on petrol, use an on-site car wash or purchase a beverage or snack. Similarly, ampm is owned by BP and operates within America. Ampm is a convenience store added onto petrol stations with the first store opening in Southern California and now expanded to California, Oregon, Washington, Nevada and Arizona. In the UK BP owns wild bean café which, similar to ampm is added alongside petrol stations providing customers with hot and cold beverages and food.
The energy sector may face some problems. One of the biggest problems that BP have faced was when they experienced an oil spill in the Gulf of Mexico. The oil spill in the Gulf of Mexico had more than 200 million gallons of crude oil pumped into the ocean and BP had to pay $40 billion in fines, clean-up costs and settlements and an additional $16 billion due to the Clean Water act; this oil spill was the biggest spill to date and had a extremely negative impact on BP. This is not only because they lost a lot on money and resources but they lost many sales due to the impact it made on the environment and customers not wanting to be apart from that so they went to competitor companies.
It was hard for BP to regain their reputation and put in lots of projects to help clean up. Now BP have many procedures in place to stop a similar incident from happening in the future and other companies in the sector would have changed their procedures to ensure a similar incident never happens to them. Another problem the BP will face is that there will be a time where all the oil will run out and therefore they will no longer be able to produce products to sell which BP will no longer be able to operate.
BP face large competition with other energy companies in which they all sell fuel to the public. BP competitors include, Esso, Shell and Texaco. Shell is an Anglo–Dutch multinational oil and gas company headquartered in the Netherlands and incorporated in the United Kingdom. Shell has been a leading player in the North Sea for over 30 years, with interests in more than 50 oil and gas fields. Onshore Shell own and operate gas pipeline systems and terminals that are responsible for delivering more than 20% of the UK’s supply. Shell has a major downstream business in the UK, supplying fuel and lubricants to businesses and motorists, and the aviation and shipping industries. Texaco is an American oil retail brand. Its leading product is its fuel.
Texaco was an independent company until its refining operations merged into Chevron Corporation in 2001, at which time most of its station franchises were divested to the Shell Oil Company. Exxon Mobil is the world’s leading publicly-owned energy company. ExxonMobil’s business in the UK is conducted through individual operating companies for instance, Esso. BP may face problems with their competitors as other fuel companies may have cheaper deals which would make customers go to them and BP will lose sales.
In the future oil and gas will eventually run out which means that it would be hard for the energy sector to carry on operating as they won’t have any products to sell. However, a lot of energy companies are venturing into renewable energy. In the future, energy companies can still operate if they provide renewable energy instead of oil and gas. BP have started to venture into renewable energy which means they could still be successful in the future.