BP strength and weaknesses
S TRENG THS – BP is listed on London Stock Exchange and within the FTSE 100 Index, it is also has a listing on the New York Stock Exchange. BP is operating globally in 80 countries with different brands. – BP is 4th in the Fortune 500 and 3rd largest energy company worldwide measured by revenue. (CNN Money,) which is also dominant in the European market. – BP also gained competitive edge because the world leading oil related technology. WE AKNESSES – BP made a huge loss in 2010 owing to the oil spills in Gulf of Mexico. The damage to BP’s reputation has been significant compared to other oil companies. – BP seldom has activities in the Middle East, and less confirmed oil reserves than the state-controlled oil & companies e.g. Saudi Aramco.
OPPOR TUNI TIES – There is an increasing demand for gas and oil as well as the refined and secondary products of oil in developing countries such as China and India. – BP is currently launched a series of oil exploration activities, and BP, Shell Canada granted oil exploration rights off Nova Scotia, Canada.
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THRE A TS – Decline in oil reserves worldwide in the long term. BP and other oil companies need to develop new types of energy to combat this threat. – The US government has recently blocked BP from bidding for future contracts in the US for the foreseeable future. – Many of BP’s oils producing regions are headed by less stable governments which increases volatility in the business.
BP has been involved in a number of accidents over recent years, including the infamous Texas City refinery explosion, Alaska oil spills and recently, the Deepwater Horizon explosion in the Gulf of Mexico. All of them caused human casualties and serious pollution to the environment. The most recent and controversial accident is the Deepwater Horizon explosion, which caused the world’s largest oil spill. The oil spill covered 580 square miles (1,500 km2) and was only 31 miles (50 km) from the ecologically sensitive Chandeleur Islands (CBC, 2012).
The impact of the spill was enormous and included ecological damage as well as wildlife damage which greatly affected the large fishing industry in the Gulf of Mexico. Thousands of fishermen went bankrupt or unemployed and it will take years for the industry to return to its former glory. Initial cost estimates to the fishing industry were $2.5 billion (Walsh, 2012). In response to the initial spill, BP tried to remove the oil by using two relief wells to block the original well which had burst at a cost of around $200m (BP, 2012).This method has closed the well permanently and stopped further leakage. BP is also trying to improve its ethical position in the following ways: dismissing employees and contractors that violate the health and safety requirements; investing $1bn US dollars to restore the damaged natural resources ; and $500m over 10 years into research about how to deal with oil spills in the long term (BP, 2012).