BP Oil Company is a British oil and gas multinational headquartered in London, United Kingdom. British Petrochemical Corporation, popularly refereed to as British petroleum formerly registered in April 14, 1909 as Anglo-Persian Oil Company. This came after years of continued adventure, exploration and subsequent discovery of oil in Persia by William Knox D'Arcy. The company mostly engaged in oil and gas exploration in Persia because Persia now Iran, was the first country to discover oil in Middle East. The company was later rebranded to Anglo-Iranian Oil Company Limited when Persia was renamed Iran. This was aimed at strengthening the companies business with Iran, which by then was the leading oil producer in the world. In 1954, Anglo-Iranian Oil Company changed its name to British Petroleum Company limited. However, this acquired name tag was formerly adopted in 1982. The company continued to expand through vertical and horizontal integration. In 1998, the company entered into a joint venture with American oil giant Amoco. The company was temporarily named BP Amoco before it was later renamed to BP PLC with its headquarter still in London (Reed & Fitzgerald 2001).
Currently, British Petroleum Public Limited Company ranks third in production of oil and other petro-chemicals. In terms of revenue and asset base, the company ranks fourth in the industry. BP PLC is extremely active in the oil industry. The company engages in exploration, production, refining, distribution and marketing of different types of gas and oil products. Furthermore, the company has divested in other value addition services. Through this, the company has invested in production of renewable energy including hydrogen, bio fuels, wind power and solar. Currently, the company has established its presence in over 80 countries. BP PLC’S daily capacity is estimated to be 3.8 million barrels per day. The company is primarily listed on the London stock exchange. It is also listed as constituent of the FTSE 100 Index. By the end of the previous financial period (2011), BP PLC’S market capitalization was estimated to be £87.1 billion. This ranked the company in fourth place among the companies listed on the London stoke exchange. The company is also listed on the New York Stoke Exchange. Most of the company’s businesses are concentrated in the United States under the tag name BP America. The company has not performed well in terms of corporate social responsibility. However, lately, BP PLC has invested voluminous amounts of money in reduction of greenhouse gas (Bamberg, 2000).
Reasons Why PB Wants To Expand To India
In its attempts to withstand tough economic challenges; BP embarked on measures that were aimed at reducing overheads and strengthening revenue. In this regard, the company directed its focus to India in order to benefit from a huge manpower pull and immense markets. In 2011, the company made the largest foreign direct investment in the history of India by acquiring a $ 7.2 billion stock in Reliance Industries. This figure translated to acquisition of 30% of oil and gas blocks in India. This was part of BP PLC strategic plan to bolster its market dominance in emerging markets. Through this acquisition, BP anticipated to grow its revenue by 3 %. The company appreciates the economic challenges afflicting the United States and Europe. Venturing into the Indian market is part of the company’s strategy to cushion its business from the loss of revenue that is likely to accrue from original markets.
The infamous 2010 oil spill in the coast of Mexico and other mishaps in the company’s refineries in the United States and Europe have earned the company a bad reputation. BP has been under sharp scrutiny from the media and environmental groups for its poor environmental track record. Moreover, BP has continued to face increased pressure from governments in relation to its safety standards. The company’s strategy to increase its investments in India can be view as a strategy to overcome challenges and acquire new markets (Gamble, 2011). BP wants to take advantage of lack of stringent environmental legal frameworks in India to boost its productivity. A rough analysis reveals that if BP is to adopt the recommended measures in the United States and Europe, then its production capacity is likely to plummet by 50% in ten years. Furthermore, with the change in global production dynamics, it is cheap for one to produce oil in India and ship it to the United States and sell it at cheap than if one was to produce from the United States or Europe. (Gamble, 2011, p. 33-35) alleges that corporations mostly outsource from markets where production and labor costs are cheap. For instance, it is currently cheaper to outsource almost everything to China because it is cheap to produce in China. India has readily available labour, and market for its products. In India, the cost of production is cheaper. It is easy for manufacturers to produce in India, ship them abroad, and sell at low cost but still at a profit.