BP is also BO (Big Oil). It is the world's #3 publicly traded integrated oil concern, behind Exxon Mobil and Royal Dutch Shell. BP explores for oil and gas in 30 countries and has proved reserves of 17.8 billion barrels of oil equivalent. BP is the largest oil and gas producer in the US and a top refiner, with 16 refineries processing 4 million barrels of crude oil per day; it is also a major producer of petrochemicals. BP operates 21,800 gas stations worldwide. The company took a major hit in 2010 when a Gulf of Mexico deepwater rig exploded and killed 11 workers. Millions of gallons of crude gushed into the Gulf and the company was forced to set aside $20 billion to pay for related damages in 2011 and 2012.
The spill developed into a major political, economic, and public relations crisis for the company as it struggled to cap the leaking well, clean up the massive oil spill, and mollify Gulf Coast communities, which saw their fishing industry decimated and their coastlines inundated by oil. To address the growing crisis, in 2010 the company established an escrow account of $20 billion, managed by a third party, to reimburse claims from people and businesses financially damaged by the oil spill. (It settled with individual and business plaintiffs for $7.8 billion in 2012, but still faced federal, state and local government charges). In a plea deal with the US government, in 2012 BP pled guity to criminal misconduct (12 felony counts) and in 2013 agreed to pay $4.5 billion in damages.
After the costly 2010 Gulf spill, BP embarked on a "shrink to grow" strategy of selling older oilfields around the world to generate cash for settlements. All told, the company has entered into agreements to sell about $37 billion in assets. Completed divestitures include one of the largest transactions in the Gulf of Mexico -- BP's sale of a number of oil and gas fields in the deepwater Gulf of Mexico region to Plains Exploration & Production for $5.55 billion in November 2012. In July it sold assets in Canada, Egypt, and the Permian Basin in the US to fellow explorer Apache for about $7 billion. The deal included BP receiving a $5 billion cash advance. In 2011 BP sold its Colombian assets to Talisman Energy and Ecopetrol for $1.9 billion and properties in Venezuela and Vietnam to its Russian joint venture TNK-BP for $1.8 billion.
TNK-BP was BP's longtime drilling venture with several Russian partners. After years of feuding with those partners, in 2013 BP sold that business to Russian state oil company Rosneft as part of a complex package of deals worth a whopping $55 billion. The transaction gave BP a 20% stake in Rosneft and about $12.3 billion in cash, allowing it to pursue offshore drilling opportunities in the Arctic Ocean and settle billions of dollars in US Gulf spill penalties. Several BP competitors, Exxon Mobil, Italy's Eni, and Norway's Statoil, already have Russian Arctic drilling deals.
Mergers and Acquisitions
On the renewables side of the business, since 2006 BP has invested $4 billion (including $1.3 billion in 2009) to develop wind, solar, and other green energy sources. In its biggest alternative energy purchase to date, in 2011 BP acquired 83% of Brazilian ethanol and sugar producer for around $680 million. Later that year it spent about $71 million for the half of Brazilian biofuel joint venture Tropical BioEnergia that it didn't already own. The JV participants were Maeda SA Agroindustrial and LDC-SEV Bioenergia SA.
Buoyed by higher oil prices, BP reported a 28% jump in revenues in 2011, and with its Deepwater Horizon disaster costs contained by the financial actions its took in 2010, a strong growth in net income as well.