Bp Amoco

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9-201-054 REV : M A Y 4, 2010 B ENJA M IN E ST Y M ICHA EL K A NE BP Amoco (A): Policy Statement on the Use of Project Finance As two of the largest oil and gas firms in the world, The British Petroleum Company p.l.c. (BP) and Amoco Corporation (Amoco) had a long history of competitive encounters. This rivalry continued into the 1990s in a variety of locations ranging from the United States to the North Sea to, more recently, the Caspian Sea—a region that had opened up to exploration by Western oil companies following the breakup of the Soviet Union in 1991. In describing this rivalry, one analyst wrote: Azerbaijan was an early battleground for BP and Amoco as these two companies competed for the oil riches of this newly…show more content…
The BP/Amoco Merger The British Petroleum Company p.l.c. BP wa s the largest company in the United Kingdom and the third largest publicly held oil and gas company in the world. It had 56,000 employees, activities in more than 70 countries, and three principal lines of businesses: crude oil and natural gas exploration and production (E&P), refining and marketing (R&M), and petrochemical production. Its principal producing or “upstream” assets were oil and gas fields in the North Sea and on Alaska’s North Slope, where it had been a leader in the development of the Prudhoe Bay oil field and the construction of the Trans Alaska Pipeline. BP’s refining and marketing operations, the “downstream” assets, consisted of refineries, service stations, transportation and storage facilities, most of which were located in the United Kingdom, United States, and Europe. Besides oil and gas, BP was also a leading chemical producer with several proprietary technologies such as processes for making polyethylene and acetyls. Sir John Browne, a 22-year veteran of the company and former head of the E&P business, had been the group chief executive since 1995. In 1997, BP earned $4.1 billion on revenues of $71.3 billion and assets of $54.6 billion (Exhibits 1 and 2 include summaries of BP’s financial statements.) Adjusted for exceptional items, exploration and production, refining and marketing, and petrochemicals accounted for 68%, 21%, and 11%, respectively, of consolidated 1997

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