+ 18 FAMILY AFFAIR 44 SHIP SHAPE 52 TIME TRAVEL Five generations A century on A timeline of at Whiting the high seas pivotal moments

THE INTERNATIONAL MAGAZINE OF THE BP GROUP ISSUE 2 2009 BPMAGAZINE

CENTENARY SPECIAL PIONEER SPIRIT To celebrate BP’s centennial year this special edition of BP Magazine reports on key moments in the company’s history, including the discovery that began it all. Welcome. So much of modern business is driven by a desire to move contents / issue 2 2009 forward – to be better today than you + Features were yesterday – that it is easy to forget the value in taking stock of 06 Centennial thoughts Group chief executive Tony Hayward reflects on the company’s history. Interview by Lisa Davison what has gone before. Which is why Photography by Richard Davies, Marc Morrison & Stuart Conway anniversaries can offer a chance to Cover story reflect on standout moments that 12 First frontier The search for oil in Persia was a long one, but when it have made a company great. This came, it began a chain reaction of events that changed the industrial face of the Middle East forever, and led to the incorporation of a company that would year is BP’s 100th anniversary and endure for 100 years. By Vartan Amadouny & Amanda Breen throughout this issue, we look back at 18 Generation game The family and the refinery that have grown up together. some of the people who have worked By Paula Kolmar Photography Marc Morrison tirelessly on geographical, technical 24 Historic launch How BP Shipping has navigated the waterways of the world and political frontiers to meet global for almost a century. By Ian Valentine Photography by Barry Halton & Stuart Conway energy needs. In some instances, the 32 Commercial break A whistle-stop tour of BP advertising. By Tim Wickham geographical frontiers have not 38 Frozen assets The story of Alaska’s giant Prudhoe Bay field. By Frank Baker changed but the technical challenges Photography by Marc Morrison have moved on. In others, the focus 44 Technical evolution The technological advances that have changed the has been on creating long-lasting way the industry searches for oil and gas. By Nina Morgan Illustrations by Matt Herring partnerships that enable resource 52 Memory lane Discover some of the key moments in BP’s history and its development that benefits both heritage companies in a special foldout timeline. business and community. What this 56 Best of British Thirty years since oil first flowed, BP’s North Sea business is proves is the key to longevity is in a planning a prosperous future. By Helen Campbell company’s values. As group chief 62 North Star How the Forties field influenced a nation. By Professor A Kemp executive Tony Hayward says: “Values do not change with the year. They are 64 Perfect match The partnerships that make BP distinctive. By Lisa Davison probably the most enduring thing a 70 Environmental experts Behind a speech on climate change lies more company has.” In this issue, both he than 30 years of dedication to environmental issues. By Lisa Davison and chairman Peter Sutherland talk 74 Distribution network A visual look at some of the different ways oil and gas have been transported to market. about what BP means to them. I hope you enjoy this centennial edition. 78 Growth opportunity The history behind some of BP’s largest mergers and acquisitions. By Lisa Davison Lisa Davison> Editor 82 Silver screen Writer/director Nigel Williams talks about making his first corporate film. By Nev Pierce Photography by Steven Croston

BP MAGAZINE 86 Stop the press BP’s history as seen through the headlines of the day. The international magazine of the BP Group – ISSUE 2 2009 By Hester Thomas Illustrations by Jason Ford

BP Magazine is published quarterly for external readers around the 90 Profile An interview with BP chairman Peter Sutherland. world, as well as past and present BP employees. Its contents do not necessarily reflect official company views. By Martin Vander Weyer Photography by Graham Trott The copyright for photographs and illustrations in BP Magazine is not always owned by BP. Please contact BP Photographic Services + Regulars for details. A snapshot of global news from 1909. managing editor design 04 For the record Barbara Peen Phil Steed – Steed Design Meet some of the people – from chairmen to project engineers – peenb@bp.com [email protected] 11 BP Faces www.steeddesign.com who have helped shape BP. editor Lisa Davison print management 36 Viewpoint The development of a socially responsible corporation. [email protected] Williams Lea distribution image contributors 68 Viewpoint The changing face of the energy industry in Azerbaijan. Carolyn Copland BP Archive +44 (0) 20 7496 4340 BP Imageshop 96 Viewpoint The evolution of a brand. Corbis Debut Art 98 Factfile The largest oil producers in 1909. Heart Illustration 100 BP faces to celebrate 100 years. Rex Features 100 Parting shot © BP p.l.c., 2009 52 Giant in the field The Thunder Horse platform in the Gulf of Mexico is the world’s largest floating platform. Learn more about it and other significant events in BP’s history in the timeline.

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74 For the record Highlights from around the globe > Spring 1909

the century in numbers

Germany

900 US

The number of staff Belgium Northern Ireland evacuated from BP’s England Britannic House France headquarters during Persia the Second World War (Iran) 1967 Antarctica The year Mrs P Harris of the computer Persia/England: Company incorporated department became A new company has been The majority of its 1 million businessman William Knox the first woman to formed to progress ordinary £1 shares have D’Arcy in 1901. He has development of a major oil been purchased by Burmah subsequently ploughed reach a senior position discovery in Persia. The Oil, with another 30,000 much of his fortune into in BP – as defined by prospectus for the company acquired by Lord Strathcona that search. In 1904, D’Arcy – known as the Anglo- – APOC’s new chairman. Oil turned to Burmah Oil for joining the senior Persian Oil Company was struck in May last year, financial support and has dining room Limited (APOC) – was after years of searching in a since been made a director issued on 19th April 1909. concession acquired by of the APOC board. 1978 The year BP removed the stipulation that directors had to be British

251.7million The number of tonnes of crude and products transported by BP

Shipping in 2006 In writing: official documentation detailing the Persia concession.

04 Issue 2 2009 BP MAGAZINE top performers France Channel flight Louis Blériot (below), a French inventor and engineer, has completed the first flight across the English Channel. The 37-minute flight began a little after 4.30am on 25th July 1909, at the break of dawn. Bad weather caused Blériot to lose sight of landmarks at one point and declare: “I am alone. I can see nothing at all. For 10 minutes, I am lost.” ■ In January 2005, the world’s largest passenger plane, the Airbus A380, was unveiled in France.

Northern Ireland US the New York section of Luxury liner Instant success the American Chemical Construction has begun on An Anglo-Belgian inventor Society. what is expected to be the living in the US has begun ■ Early radios and telephones world’s largest passenger selling his newly-devised were made of Bakelite because steamship (above). Capable instant coffee. Although of its properties of insulation of carrying around 3,500 not the inventor of the and heat resistance. people, the White Star Line process, George Washington Antarctica ocean liner is using some of is the first to manufacture Germany Pole position the most advanced it commercially. It is said he Nobel cause Anglo-Irish explorer Ernest Shackleton technology of our time, and was inspired by seeing Wilhelm Ostwald has (below right) has received a knighthood is being described as dried powder on the edge of received the Nobel Prize in from King Edward VII. It follows his ‘unsinkable’. a silver coffee pot while in Chemistry for his work on return from the Antarctic, where he led ■ On the night of 14th April Guatemala. catalysis, chemical an expedition to within 156 kilometres 1912, during her maiden ■ During its height in the equilibria and reaction (97 miles) of the South Pole – the closest voyage, Titanic hit an 1970s, almost a third of the velocities. He is recognised convergence on either pole in iceberg and sank, killing roasted coffee in the US was as almost single-handedly exploration history. 1,517 people. converted into an instant establishing physical ■ In 1911, Norwegian explorer Roald product. chemistry as an academic Amundsen reached the South Pole. Three US discipline. years later, Shackleton made his third trip on NAACP founded Belgium ■ Today, catalysts are used the Endurance, which became trapped in ice The National Association Plastic invented throughout the oil and gas and and sank. Incredibly no one died. for the Advancement of Belgian chemist Leo petrochemical industries. Colored People has been Baekeland (below) has founded. Appalled at the announced his creation of Top 10 violence committed against ‘Bakelite’, the first fully African-Americans, a group synthetic resin – or plastic Largest oil fields in of white liberals issued a – to become commercially history with BP call for a meeting to discuss successful, at a meeting of involvement racial justice. Some 60 1. Burgan, Kuwait people signed the call, 2. Rumaila, Iraq/Kuwait which was released on the 3. Ahwaz, Iran centennial of Abraham 4. Kirkuk, Iraq Lincoln’s birth. 5. Marun, Iran ■ NAACP is the oldest civil 6. Gach Saran, Iran rights organisation in the US. 7. Agha Jari, Iran In 2009, Barack Obama was 8. Prudhoe Bay, US ■ If you have any comments about BP Magazine, elected the first African- 9. Zakum, Abu Dhabi please send them to: [email protected] or American president of 10. Bu Hasa, Abu Dhabi BP Magazine, Bldg 200, Chertsey Road, the US. Sunbury-on-Thames, Middlesex, TW16 7LN, UK

BP MAGAZINE Issue 2 2009 05 AN INTERVIEW WITH BP’S CEO TONY HAYWARD As BP’s group chief executive in its centennial year, Tony Hayward takes time to reflect on the importance of the company’s history, values and pioneering spirit.

6 Issue 2 2009 BP MAGAZINE Interview> Lisa Davison ➔ view fro m Photography> Richard Davies/Stuart Conway/Marc Morrison the top

Leadership skills: since becoming group chief executive, Tony Hayward has made it his business to get out into the BP world to talk to employees, whether it’s at an office ‘townhall’ shortly after results day or at an operational site.

BP MAGAZINE Issue 2 2009 7 Interview> Tony Hayward

Why do you think it is important for a the Middle East, the first to find oil there, reservoirs, heavy oil and gas. You can think company to celebrate its history? the company that led the development of in terms of new forms of energy: solar, People and companies are as much about Alaska and the North Sea, one of the first to wind, biofuels. Advanced conversion is where they come from as where they are move into deepwater exploration, the another frontier: how do you translate coal going, and I think the DNA of a company is company that led the industry to recognise into something more useful and not have forged by the experiences it has been climate change. lots of carbon dioxide associated with it? through. I think it is important to recognise that you are standing on the shoulders of Being a pioneer often means working During your BP career, was there a giants. on a frontier. Where do you think the defining moment when you felt part of new frontiers are for BP in the future? a team doing something different? Do you think there is a certain BP You can think of frontiers in different ways. There are three or four moments. The characteristic that its employees There are physical ones, so deeper water or formulation of the new exploration demonstrate? underneath the ice, or you can think of strategy in the early 1990s, which moved If I look back through our history, I think them in terms of the nature of the into very deep water and new geopolitical the company and its people have a resources that we are developing, for areas; the debate we had at the top of the pioneering spirit. We were the first to go to instance, more challenging and complex company in 1997 when we took a stand on

8 Issue 2 2009 BP MAGAZINE “I think the DNA of a company is forged by the experiences it has been through. It is important to recognise you are standing on the shoulders of giants.”

climate change; the decision to go ahead just had about deep water is a great and merge with Amoco, and then with example of innovation. Progressive is about ARCO. The decision to take a big step into our relationships with each other, our Russia was one that I was very intimately partners and customers, based on mutual associated with. advantage. We operate in many places that are in transition, which provides additional Has there been a development during challenge in managing relationships and your time at BP that you never thought encouraging those societies to develop. you’d witness when you set out as a That was no different 100 years ago in young geologist? Persia [now Iran] from some of the I think the most obvious one is the deep challenges we have today. water. When I started, deep water was a few hundred metres. The fact that we are today Many see corporate responsibility as a producing oil and gas in up to 2,000 metres new concept, but you’re saying it’s (6,500 feet) of water and exploring in 3,000 something BP has been doing for a very metres (9,800 feet) of water, and that long time… technology is as advanced as anything that Absolutely. It sometimes has a different goes into space – in terms of the pressures form, but absolutely. The final thing is and temperatures – is astonishing. about being a responsible operator. We have talked about being green in the past, How do you think the BP of the past but I think it is more than that. It is about links with the BP of today? the safety and development of our people The best way to look at it is through our and the communities and societies in four values – progressive, responsible, which we operate, as well as being innovative and performance-driven, and I environmentally responsible. Values do not would say that you can trace them all back change with the year. They are probably the into our history. We’ve only started to most enduring thing that a company has. articulate them in the past 10 years, but I think their roots go back a long way. Unless The role of international oil companies you perform as a company, you cannot has changed over the past 100 years. persist for 100 years. The conversation we What do you think their role is in the 21st century? “The role of the international company is to do I think if you look back over the history of the industry, you would say there was a the very tough stuff, the stuff that others cannot, fundamental change in the late 1960s, or choose not to, do because of the risk involved. early 1970s with the arrival of OPEC and the establishment of national oil That means we have to work on the frontiers.” companies, which chose, quite reasonably, to develop their own resources. The role of the international oil company is to do the very tough stuff, the stuff that others cannot, or choose not to, do because of the »

BP MAGAZINE Issue 2 2009 9 Interview> Tony Hayward

risk involved. That means we have to work Do you think BP might exist in another “We provide the light, on the frontiers. When we went to Persia, it 100 years’ time? was the frontier of its day. When we went I do not see why not, if we continue to heat and mobility that to the North Sea and Alaska, they were the perform and innovate and are engaged people want, and it’s our frontiers. The deep water and the Caspian with society. We have to earn the right to were the frontiers of the 1990s. Today, they be here in 100 years’ time – but provided responsibility to are under the ice, in ever deeper water and we offer something that people want and continue to do that in a more difficult reservoirs. I think the role are prepared to pay for, then as a of the international oil companies has commercial enterprise, we will be here. I do way that makes a always been to live on the frontier and to believe that it is not really the person at the difference in the world.” do that, we have to have the world’s best top that creates the sustainable nature of technology. the company; it is each and every one of our people around the world who works How much of a role do you think the for, and is connected to, BP. ■ energy industry played in shaping the 20th century? We need to be modest in our assertions, but we clearly played a part by providing a reliable, affordable form of energy globally. BP has played an important part in making that market work and, because we are present in so many countries and participate in the world’s energy infrastructure in such an holistic way, by our very presence we have an influence. We provide the light, heat and mobility that people want, and it’s our responsibility to continue to do that in a way that makes a difference in the world.

10 Issue 2 2009 BP MAGAZINE BP Faces Photography> BP Archive

NEW VENTURES William Knox D’Arcy / Businessman May 1908 represented last chance saloon for businessman and oil prospector William Knox D’Arcy. Down to his last $15,000, his mansion on the market, and with a personal overdraft of some $700,000 (equating to roughly $50 million in modern terms), Knox D’Arcy needed some good news. Having made his fortune in Australian gold, he acquired exclusive rights to search for oil in southwest Persia in 1901, and ploughed his life’s fortune into the venture. By 1905, a new injection of capital was required, so Knox D’Arcy formed the Concessions Syndicate Ltd with Burmah Oil, which took over management of the firm. Three years later, however, Burmah was threatening to abandon operations. Knox D’Arcy never visited Persia himself, but on 31st May, 1908, he received a telegram at dinner in London. He reportedly read the notice, placed it under his water glass and waited until the meal was over. He then told the butler to open the champagne: “They have struck,” he declared. Oil had been discovered five days earlier at Masjid-i-Suleiman, eight years after the search had first begun. ■

BP MAGAZINE Issue 2 2009 11 ➔ oil discovery Early days> BP in the Middle East

First strike: engineer George Reynolds first struck oil on 26th May 1908 (right). Above, 1,000 local labourers worked to lay the 220 kilometres (130 mile) pipeline from Masjid-i-Suleiman to Abadan.

It is sometimes difficult to prise apart truth and romance when it comes to history, but in BP’s case what is clear is that the journey to first oil in 1908 and the incorporation of the Anglo-Persian Oil Company a year later pushed the frontiers of technology, knowledge, patience and human spirit. But it was an endeavour that would yield riches far beyond financial gain. DRAMATIC

12 IssuePROSPECTS 2 2009 BP MAGAZINE Report> Amanda Breen / Vartan Amadouny Photography> BP Archive

BP MAGAZINE Issue 2 2009 13 Early days> BP in the Middle East

old and insightful. Just two discovering an enormous field of around an extent that on the day its stock opened adjectives used to describe 1.5 billion barrels of oil equivalent. Its for trading in London and Glasgow, people one businessman’s move to significance could not be over-estimated stood more than five deep in front of secure an exclusive oil for a country, a region and an industry. cashiers in one Scottish bank. concession in Persia (now The formation of the Anglo-Persian Oil Anticipation of success was rife, but at Iran) at the turn of the 20th Company (APOC) – later BP – came hot on the time Britain lacked expertise in century. William Knox the heels of this discovery. Knox D’Arcy’s petroleum exploration and development. D’Arcy’s speculative gamble almost concession had started it all, but besides a The Middle East would become the place Bbankrupted him, but it would unlock the seat on the board and some shares in the where the company, and increasingly country’s riches and from these risky company, his involvement had become British employees, learned the techniques beginnings emerged a new oil company. increasingly limited over the years. of operating in diverse, difficult conditions. Knox D’Arcy was a capitalist, through Meanwhile, the British press talked up At Masjid-i-Suleiman that meant and through, investing his wealth, first in this new company’s vast potential to such building an infrastructure in which a gold and later oil. He was not particularly interested in the projects themselves, only in the return on investment he might make. But the Englishman was forced to be patient for that return. Years passed and no pay-off came, forcing him to enter into business in 1905 with Burmah Oil, forming the Concessions Syndicate Ltd. A further three fruitless years passed, and the drilling of two holes near Masjid-i- Suleiman was viewed as the syndicate’s last chance. Over the years, Knox D’Arcy’s man on the ground – engineer George Reynolds – faced a string of interruptions to exploration: bad weather, sickness and breakages, not to mention variable relations with the local indigenous communities. This bad luck did not change with the final two wells – torrential rains washed away four months’ work on a link road and a drill bit fell off the first well, losing the operation a precious 10 days in recovery. Finally, in the early hours of 26th May, 1908, Reynolds and his team struck oil,

Z agros BP profile: George Bernard Reynolds Mou nta ins Born in the mid-19th century, possibly at sea, Reynolds (below left) graduated from the Royal Indian Engineering College and worked as an engineer in Tembi Sumatra for Royal Dutch before being engaged by William Knox D’Arcy to search for oil in Persia. Although often tetchy with his superiors, Reynolds laid Euphrates Masjid-i-Suleiman the foundations for the Iranian oil industry. He was patient and persuasive in oil field handling his staff of different nationalities, sustaining their endeavours through n ru a rains and searing heat and inspiring those depressed by lack of success and K r homesickness with his assuredness and determination to strike oil. e v i R IRAN

Pipeline Tigris Basra Abadan IRAQ

KUWAIT PERSIAN AREA GULF ENLARGED

Kuwait 14 Issue 2 2009 BP MAGAZINE kmkm 7575 150150 In the search for a job and workforce could live and operate in its workers and sickly locals. Dr Young would rugged territory. Just six months after become APOC’s chief physician and a local better life, many people striking oil, Daily Telegraph correspondent legend, developing a network of clinics and moved to Abadan.” Percy Landon reported of well-built drillers’ hospitals across Persia. houses, rough-and-ready workshops, offices As well as facilities for employees, a Cyrus Rezaei and stables, as well as ‘sardabs’ or pipeline and refinery were urgently ‘shabadans’ cut into hillsides, providing required. Scottish engineer Charles Ritchie shelter from the searing summer heat. led the challenge to lay a 220km (130-mile) Medical needs were attended to by Dr pipeline over remote hillsides to the site of Morris Young, who had joined the the first refinery at Abadan, on the edge of expedition in 1907. He established a free the Persian Gulf. More than 6,000 mules healthcare service and practised from a dragged pipe over steep gradients to reach stone dispensary, treating both injured the route, with a special team of 37 engineers »

New development: local people were drawn to jobs, electricity and clean drinking water at Abadan refinery (below and left), and between 1936 and 1950, BP built some 21,000 homes for employees.

BP MAGAZINE Issue 2 2009 15 Early days> BP in the Middle East

Did you know? explored frontiers where there were no Local talent: the Anglo-Persian Oil facilities until the company created them. Company provided young Persians ■ The Anglo-Persian Oil Company made with industry training (left). Above, These frontiers became a laboratory of ideas its first trading profit in 1915 and paid the pipeline between Masjid-i- and experience. Metalled roads for access to Suleiman and Abadan refinery its first dividend to ordinary fields, pipelines to carry the oil, modern crossed rugged territory. shareholders two years later. port facilities for shipping products around ■ The original oil concession signed in the world were just some of the physical 1901 for a term of 60 years was infrastructure BP and partners had to create It took three years for staff to return and cancelled in 1932 by His Imperial in order to function. These came alongside production to resume, albeit under Majesty Reza Shah, who threw the telecommunications, housing and ancillary different terms by which the company, company file in the fire. A new revised services in medicine, education and now BP, would work in partnership with concession came into effect from 1933, housing, all of which were previously non- other international oil companies. covering a reduced area of 260,000 existent in most areas. Nationalism would come to rise again, square kilometres (100,000 square Between 1936 and 1950, BP built some though, firstly in Libya under Muammar al- miles), chosen by the company. 21,000 homes around its refinery at Abadan, Ghaddafi, who nationalised BP’s interests in the first and, for many years, the world’s the country in 1971. Iraq and other Arab largest oil processing plant. Job states soon followed suit, as did Iran in 1979. opportunities, electricity and treated water Although the wave of nationalisation and 1,000 local labourers working on the drew people from across the country’s that swept BP out of its prolific Middle project. When he got bored inspecting the southern provinces. One employee, Cyrus Eastern states changed the character of the pipeline on horseback, Ritchie bought an Rezaei, born in Abadan to the indigenous company, the links to the region were aeroplane, the first in Persia. It nearly cost Bakhtiari tribe, describes how the place never entirely severed. him his life, though, when he later developed “a cosmopolitan culture, where BP continued to lift oil from Abu Dhabi, crashed it. you found mixed tribes, dialects and UAE, in a service agreement with its Remote conditions and basic apparatus languages. You could have the local government, and by 1974, had entered characterised exploration work during the indigenous Arab population, lots from the Egypt, where its primary focus was the early years. Before seismic reconnaissance Bakhtiari tribes; from the Southern Province country’s gas reserves. Indeed, gas became a became the industry norm, early geologists who were living around Shoushtar and new departure in a region dominated by oil. rode through Iran on donkeys, with Masjid-i-Suleiman. In the search for a job One hundred years after entering the knapsacks and hammers, ‘reading the and better life, they all moved to Abadan.” Middle East, BP is still there, pumping oil in landscape’ with their eyes to find the places Abu Dhabi and developing oil and gas in where geological anticlines and seepages Imbalance of revenue Egypt, along with gas production in Algeria indicated the presence of oil. Nationalism came to threaten the stability and a return to Libya and Oman, where Chief geologist for BP by 1955 Norman of these operations and lifestyle. In the late technology and expertise developed in Falcon, recalled how camping in the 1940s, resentment emerged at the some of its ‘newer’ businesses are now wilderness brought unwelcome guests. imbalance of revenue shared between the being applied for the first time in the “Occasionally, somebody had a company and the Iranian government, region where it all began for BP. gramophone and we would have [it] on, leading to the nationalisation of the A certain amount of luck and and suddenly in front of my tent there was country’s oil in 1951, along with the judgement prompted Reynolds and his a terrific shindig because three or four evacuation of employees and the closure of men to position that last ditch well at the jackals had come and heard the sound, and Abadan refinery. By October that year, chief right spot in Masjid-I-Suleiman in 1908. It were screaming away.” chemist Monty Sawyer was one of four was a discovery with an impact far beyond The growth of the oil industry – slow at remaining staff at the colossal refinery. “It rescuing Knox D’Arcy’s bank balance. The first but accelerating in the 1950s as demand was very strange but we kept going. We got strike in Persia would turn Britain into a grew in the industrialised world – opened the staff out, stayed on and quite frankly, it major player in the energy industry, shape up new opportunities, not only in Iran, but was not unpleasant. But the day came – we the Middle East’s politics, economy and other parts of the Middle East and North were escorted out…with many of my society. And it would be the catalyst that Africa, where BP became a major player. Iranian graduates in tears, they never would eventually create a company that In Iran, Iraq, Kuwait and Qatar, BP thought it would happen.” has endured for one hundred years. ■

16 Issue 2 2009 BP MAGAZINE BP Faces Photography> BP Archive

EXPLORATION EARTH Norman Falcon / Chief geologist “It was all fairly civilised as far as possible,” recalled Norman Falcon of conditions on Persian reconnaissance missions during his early career with the Anglo-Persian Oil Company. The Cambridge graduate served his apprenticeship from 1927 on a well-site in Persia, before joining the Bakhtiari Mountains survey. Working in rugged, roadless, mountain terrain was of little hardship, Falcon said in an interview in 1991, geologists even managed a daily bath with “not hot, but warm” water. Falcon and others mapped some 230,000 square kilometres (90, 000 square miles) at a 1:250,000 scale – work recognised as one of the greatest feats of geological exploration in the 20th century. As BP’s chief geologist from 1955, Falcon saw the company through a period of transition following the nationalisation of the Iranian oil industry and the company’s expulsion from Iran. A decade in the role saw Falcon mastermind an exploration programme, which produced a series of major discoveries at a time when the company needed to replace lost reserves. His contribution to petroleum geology was honoured in 1963 by the Royal Geographical Society’s Murchison Award. ■

BP MAGAZINE Issue 2 2009 17 ➔ refining Generations> The Warzyniak family

WE ARE

FAMILYOver the years BP has grown into a global giant, but at operational sites such as Whiting refinery – an Amoco heritage site – a sense of family remains. Just ask the Warzyniaks, who have worked at the refinery for five generations.

18 Issue 2 2009 BP MAGAZINE Interview> Paula Kolmar Photography> Marc Morrison / Whiting Archive

BP MAGAZINE Issue 2 2009 19 Generations> The Warzyniak family

refinery’s pumping system that pumped from Poland, and found his way to the fast- from Lake Michigan into the plant for growing area that is now Whiting. Born in various purposes. The system also served to the 1860s, Joseph would have been in his provide the city of Whiting with its water mid-30s at the time of the refinery’s source for purification and storage and construction. Near a major water source distribution to homes, along with the fire and railroad, the sparsely populated area department and businesses. was a prime site for a refinery. This was And since 1889, when the refinery was long before technology streamlined ‘ e back home when built by John D. Rockefeller’s Standard Oil refining, which meant many strong backs the whistle blows,” Dolores Warzyniak Company, the plant has been a workplace were necessary to handle crude oil calls fromB the porch, as her two young sons of huge importance for Whiting and its processing. run out to play with friends on a warm, families. For at least five generations and sunny summer day in the 1960s, in a small counting, that’s certainly been the case for Prosperous refinery US town near Lake Michigan. She might the Warzyniak family. Whiting – not even a city until 1903 – had have told them to take their shoes off What was the refining business like in 115 citizens, according to the Census before playing in the water sprinklers, and the US a century ago? Stories and traditions Bureau count of 1880. Success found the then gone inside to make a pot of coffee passed down from Warzyniak fathers to refinery and, as it prospered, it brought with water from the tap, while planning to sons over 10 decades tell us it has changed more workers, who, with their paychecks, sort the laundry for washing. dramatically, from the refinery products built houses and raised families. Refinery Whistle, water sprinkler, coffee, laundry and economy, to technology, safety and and community share deep roots and have – all of these brought the nearby Whiting environmental responsibility. What hasn’t grown together. Joseph chose to start his refinery into their daily lives, as it did for all changed, however, is what makes a refinery family there. of the citizens of Whiting, Indiana. Everyday strong enough to stay in production for Though records from that time are at 4.30pm, the whistle blew, signalling the more than a century: responding to energy scarce, Joseph would have been among the end of the 8am day shift; the piercing pitch demands, making a positive impact on the first generation of Whiting employees. One could be heard throughout the town. community and building pride in work – of the vital jobs in his day was that of a Everyone knew when it was 4.30pm. often based on family heritage. greaser or oiler. Whiting made grease and Water for drinking, washing and In the 1880s, Joseph Wawrzyniak (the oil to sell as machinery lubricants; the watering the flower beds came from the extra ‘w’ was later dropped) came to the US machinery at the plant was no exception

20 Issue 2 2009 BP MAGAZINE Family fortunes: opposite l-r, son and father Bob and Ray Warzyniak, Andrew Kuiper (Bob’s stepson) and Jake Warzyniak in the family home. This page, historical snapshots of Whiting refinery.

and needed constant greasing to prevent it 1976, later promoted to captain, before from seizing and wearing down parts. Men retiring from the plant in 1990. No longer carried it around in buckets, applying it part of the Standard Oil Company – which where needed. It was this job that gave the broke up under anti-trust laws in 1911 – Whiting High School sports teams their Whiting’s refinery was an Amoco business name: The Oilers. and security jobs were given to employees, Whiting, with other refineries across the not outsourced as most are today. It was country, made a profit by producing also the period when the Occupational kerosene rather than gasoline. Beeswax and Health and Safety Administration and the asphalt, too, would eventually be top-sellers. US Environmental Protection Agency Joseph’s son, Steve Wawrzyniak, was a (EPA) began oversight on behalf of workers, new employee at Whiting in 1934, when the the environment and citizens. Regulations deep depression made jobs a rare commodity slowly changed the way industries and in the US. By that time, and over the next few companies ran their businesses; refineries decades, cars and trucks began to fill the new got a lot of attention. asphalt roads criss-crossing the country, and finally gasoline and asphalt became Long service important refinery products. Gasoline’s Remember the two boys who ran home demand vaulted when the US joined the ‘when the whistle blew’? Bob and Steve Second World War, making the 1940s a Warzyniak are 51 and 54 now, and have period of fuelling military vehicles and been working for the refinery for 28 and 29 airplanes for refineries. years, respectively. Raymond is ‘Dad’. Raymond Warzyniak, Steve’s son, was Steve, who joined in 1981, knows a lot next to carry on the family tradition at about EPA regulations. In his job as an

Whiting, working there for four years, Golden anniversary: poster celebrating optimisation engineer, he is closely before joining the Marines. After Ray – now the joint 50th birthday of Whiting as a involved in the water quality and pumping 81 – retired from a long career in Whiting’s city and refinery. facility at Whiting. “I started as a police department, he returned to the technician in the lab, where I also met my refinery to become a security guard in wife, Cheryl, who is a lab supervisor,” he »

BP MAGAZINE Issue 2 2009 21 Generations> The Warzyniak family

Young love: Steve Warzyniak and his wife Cheryl work together at Whiting refinery.

notes. “But as the importance of water uphold in a way. Warzyniaks have been at quality grew in the 1980s and 90s, the this refinery a long time and since my son WHITING TIMELINE refinery added jobs that were focused joined the plant as a machinist’s apprentice 1870: Standard Oil Company (SOC) entirely on making certain the water we two years ago, it looks like our name will formed put back into Lake Michigan was as clean, go on far into the 21st century.” Indeed, the or cleaner, than when we pumped it out.” Warzyniak family name may have crossed 1890: The first shipment of finished three centuries of the refinery’s history. petroleum product, 125 tank cars of High expectations In his work as a hydroprocessing long- kerosene, is shipped from Whiting So in 1997, a year before Amoco became term asset coordinator, Bob – with the refinery. (Gasoline was considered a part of BP, Steve entered his current refinery since 1980 – is responsible for long- waste product and was often discarded) position and says, “Lake Michigan’s water is term asset coordination, which involves 1903: Whiting is incorporated as a city cleaner today than it has ever been, largely scheduling turnarounds, complex budget of Indiana because of what the EPA requires of planning, ensuring reliability and necessary 1911: SOC dissolved, Whiting refinery industries, but more so because the long-term maintenance. “I’ve seen the safety becomes part of the American Oil communities in the area depend on that culture change in big ways. Over the past 20- Company (Amoco) water. They have high expectations plus years, employees and contractors have 1918: For the First World War effort, US regarding our environmental performance, come to take personal safety very seriously, gas production rises to 12 million and we want the water we return to Lake and it’s made a big difference in the way we barrels, compared with 2 million Michigan to be pristine.” Just consider that work and the way we make decisions,” he in 1914 relationship and you can see how family says. “Safety is not optional or just a good heritage and pride in work keeps the thing to do.” He also points out the impact of 1941: During the Second World War, refinery strong. computers. “They are efficient and improve Whiting researchers developed new all- “My wife, my brother and nephew, Jake, quality, but they are so integral to my weather, heavy-duty motor oil and perhaps even my son, Bradley, after group’s work that if the system is down, we 1977: Whiting establishes an all-time graduation, are part of the ongoing family can’t perform our jobs.” production record for the refinery by history at Whiting refinery. We’re not the No whistle blows at shift change in 2009 processing 504,000 barrels of crude oil in only family with heritage here, but we are – that’s low-tech – but the young boys who a 24-hour period very proud to be one of the long-term came home when the whistle once blew, 1980-81: Bob and Steve Warzyniak names in Whiting’s history.” remember it. Refining has changed a lot become the family’s fourth generation Bob, his son, Jake, and stepson, Andrew since the 1800s and continues to change at working at Whiting refinery Kuiper, share the sentiment: “When your Whiting. But it still processes crude oil, still 1998: Amoco and BP merge. family name echoes back to you from a has an impact on communities and still has century ago, you feel a sense of honour to enduring families. ■

22 Issue 2 2009 BP MAGAZINE BP Faces

Highlights from history Trawl through the archives of BP’s long and distinguished history and you’ll find no shortage of key moments that helped shape the company we know today. But what do the organisation’s previous leaders feel were the highlights of their tenure at the top? What single event or activity stands out for them as the defining moment of their leadership?

SIR PETER WALTERS Chairman 1981-1990

“My pinnacle moment as chairman of BP was the outright purchase of Standard Oil of Ohio [Sohio] in 1987. We’d had a 55% stake in Sohio since the 1970s, but it had remained under the control of local management, apart from two BP non- executive directors. By 1986, however, it was clear that around $6 billion of revenue had been squandered on a series of useless projects, so I wrote to the chairman and chief executive, asking for his resignation and saying I would be in Cleveland with my deputy chairman, Roger Bexon, the next day. He didn’t really put up a fight, and all the Sohio directors accepted our proposal to put Bob Horton and John Browne in charge. All, that is, except one non-executive – a lady who was principal of the Wharton School of Finance. She told me: ‘This is not the way we do business in this country… I need to give Al a big hug!’ The decision was clearly right, though. The following year, we bought the remaining 45% of Sohio shares, and if we hadn’t done that, it would not have been easy to buy Amoco and ARCO later. I sat next to that lady non-exec on a flight the following year. She apologised for misjudging me, and said that since Bob and John had been in charge, she had seen what good management was all about!” ■

Interview: Nick Reed

Illustration> James Carey BP MAGAZINE Issue 2 2009 23 ➔ business focus BP Shipping> A century at sea

British flagship: launched in 1924, the British Aviator was the 60th member of the APOC fleet and the most powerful single- screw motor ship in the world.

24 Issue 3 2008 BP MAGAZINE Report> Ian Valentine Photography> BP Archive / Barry Halton / Stuart Conway

BP’s shipping business is almost as old as the company itself, with its first ship delivered in 1916. Since then, its fleet has navigated oceans, politics and economics, all with a steady hand and a determination to be a leading force in the transportation industry. TAKE A BOW A CENTURY OF SUCCESS ON THE OCEANS

BP MAGAZINE Issue 3 2008 25 BP Shipping> A century at sea

ooking back across the economic, political and military struggles Lthat rocked Europe and the Middle East in the 20th century, it is hard to believe that a shipping company could have delivered crude oil uninterrupted in that arena for the past 95 years. Yet BP Shipping has not only navigated the choppy waters of change, but has motored into the new millennium as a leading force in the global oil transportation industry. The maritime arm of BP can trace its roots back to the early days of the Anglo- Persian Oil Company (APOC), the precursor to today’s BP. As soon as oil had been struck in Persia, now Iran, the need to ship it back to Britain arose. This was primarily undertaken by contractors, until one of the directors of APOC, a visionary Scotsman named Sir Charles Greenway, saw that a modern petrochemicals business ought to be vertically integrated: able to find, extract, refine and market the oil itself. In 1915, the British Tanker Company Limited (BTC) was formed with a budget of $144,000 to build seven steam-powered tankers. All those ships and later additions to the fleet would bear the prefix ‘British’. Over the next decade, as the need for oil in the developed world gathered pace, the BTC grew to meet this demand. By just 1924, the fleet numbered 60, with the 60th being the flagship, 10,762 deadweight tonnes (dwt), British Aviator. It was APOC’s first diesel engine oil tanker, the most powerful single-screw motor ship in Launch party: the British Premier the world. was launched at Jarrow on Tyne on 25th August 1922 (top). Middle, the British Victory leaves Weathering the storm the fitting-out wharf, and right, The good times were about to end, British Fame, Merlin and Reliance in the ice channel into the port however, with the onset of the Great of Stockholm, Sweden, during Depression in the early 1930s. Rising severe weather conditions. unemployment within the merchant navy meant it was not unknown for fully qualified masters to take jobs as deck hands, while work was scarce for apprentices and cadet officers. But, through a policy of strategic mergers, as well as the continued support of the Shah of Iran, APOC weathered the storm, strengthening its position within the industry. In 1939, the British government chartered the whole fleet of 93 vessels to supply fuel for its forces during the Second World War. “Our seamen were just doing

26 Issue 2 2009 BP MAGAZINE their jobs, which they delivered with great ability under severe pressure,” says Dave Williamson, vice president for Fleet Operations, who arrived at the company as a cadet 37 years ago. Within a year of peace in 1945, the BTC fleet had returned to its pre-war total of 93 ships. The recovery was further bolstered by an order for 57 new tankers, each 12,000 dwt, which would increase the tonnage of oil transported from Abadan refinery in Iran, but remain light enough for the tankers to pass through the shallow waters EXPERIENCE MATTERS of the Suez Canal. ntering the BP Shipping headquarters at Sunbury-on-Thames, the history Lessons learnt of the company is unavoidable. A model of one of the tankers from In 1951, however, this arrangement was yesteryear sits in the main atrium, while memorabilia from the list of changed by the nationalisation of the global destinations serviced by BP hang on the walls. Iranian oil industry. APOC removed its staff EI put this to John Ridgway, who joined BP as a 16-year-old officer cadet in 1971. from the country. This sudden shortage left Thirty-seven years later, he is now chief executive of BP Shipping, while many of his it over a barrel, and although oil would fellow senior executives have also worked in the company for more than 35 years. again flow west from the Iranian oil fields, “Shipping is steeped in tradition, whether it is part of the language or the the lessons were quickly learnt. culture. We have a fantastic reputation for safety and professionalism that has The newly-renamed British Petroleum been built up over many decades. BP Shipping has had a clear purpose for almost Company duly recognised the need to 100 years, to safely transport the oil and gas of the BP Group to its customers widen its network of suppliers and worldwide. We all need to play a part in continuing the traditions and continually refineries, in particular forging alliances improving what we do, as others have done for the past 95 years.” with Kuwait and Bahrain. In the early Chief marine incident investigator Bob Fleming arrived at the same time as 1950s, it also increased the size of deep-sea Ridgway, and served alongside seamen who experienced the war. “There is a sense ships, building 13 so-called supertankers at of history within BP Shipping,” he says. “Yet, being a seafarer transcends more than 30,000 dwt. These bigger ships nationalities and politics. You are a seaman first and foremost, governed by the were particularly useful in 1956, when the laws of the oceans. But we must not forget the past, otherwise we cannot first Suez Crisis closed the Suez Canal, understand the journey of how we arrived at the company we are today.” forcing ships to travel around the South Indeed, BP Shipping seems to have as many ‘lifers’ in its ranks as other parts of African Cape, adding more than 9,000 the company. There are officers who have been serving more than 40 years. nautical miles to the journey. The crisis Ridgway adds: “We also have a vibrant pensioners club who keep in touch with lasted a year, but again alerted the company colleagues long after they have left. At sea, you live, eat, work and play together. to the changing nature of world politics and You learn each other’s strengths and weaknesses, and you learn tolerance. the need to build ever-larger ships. By the Colleagues become lifelong friends. At sea, it is very simple: you need to rely on end of the decade, the BP Tanker Company every member of the team to succeed.” numbered 146 vessels, including mammoth The 95-year history of BP Shipping is part of the cultural history to which tankers of 42-, 50- and 60,000 dwt, with every employee can relate. “We are very proud of our unrivalled ethos of plans already being drawn up for 100,000 professionalism,” says Ridgway. It was instilled by those who worked for BP dwt tankers, which could hold more than Shipping before us, and it is continued by those who work for her now as we 25 million gallons of crude oil. continue to perform for the company.” In 1967, when the canal was again blocked, this time by the wreckage of sunken warships during the Six-Day War, “Shipping is steeped in tradition, whether BP’s tankers were once more routed around it is part of the language or the culture. the Cape. This challenge demanded bigger tankers, including the first of the very large We have a fantastic reputation for safety crude carriers (VLCC), one of which was and professionalism that has been built the British Explorer, which was launched in up over many decades.” Japan, with a capacity of 215,000 dwt of cargo. By now, BP had struck oil in the » John Ridgway

BP MAGAZINE Issue 2 2009 27 BP Shipping> A century at sea

Did you know? ■ The Anglo-Persian Oil Company’s first tanker was the British Emperor, which launched in 1916 ■ In 1983, BP Shipping transported just 500,000 tonnes of oil from the Middle East, compared with 140 million tonnes less than a decade earlier ■ BP’s Trader-class liquified gas carriers were the first to be ordered for general trading purposes rather than on a contract basis ■ BP’s first very large crude carrier was the 215,000 tonne British Explorer, built in 1969.

28 Issue 2 2009 BP MAGAZINE Vast vessel: the inside of the gas storage unit on the British Merchant, one third of BP’s Trader-class fleet. It is a double hulled LNG tanker.

BP MAGAZINE Issue 2 2009 29 BP Shipping> A century at sea

North Sea and was also exporting oil from In 1982, BP Shipping, as it was now strategy of expansion that has resulted in Nigeria. It was soon to find oil in Alaska, known, was again drawn into the British the growth of its operated fleet to its further lessening its dependence on the military effort, this time the Falklands War current size of 54 ships, out of a total of Middle East. in the South Atlantic. Eleven tankers were more than 300 required daily for BP The 1960s were a time of prosperity and requisitioned from trade to provide fuel for business. BP Shipping can boast one of the expansion, but the economic bubble burst warships to support the government effort. most modern and sophisticated fleets in in 1973 when the Organisation of the Throughout the 1980s and the first half the world. Even Sir Charles Greenway Petroleum Exporting Countries (OPEC) of the 1990s, BP Shipping underwent a would might have been impressed. ■ caused the price of crude oil to increase period of consolidation. At one stage, the from $3 to $12 overnight. The high prices at company had just 22 BP ships. Yet, the Exxon the pumps led to a drop in consumer Valdez incident of 1989, which heralded the demand. BP’s maritime arm stopped building of ships with double hulls, had Historic fleet: built in 1922, the British building and began to shrink. A further oil forced the company to grow more capability Workman (top) was one of the first 60 crisis in 1979 pushed the price of crude to actively manage marine risk. ships to be constructed for the British from $13 to a high of $35 a barrel, which In 1999, following merger with Amoco Tanker Company. Middle, the British Courage launched in 1928. Bottom, the again caused new orders to be cancelled and and the subsequent acquisition of ARCO, British Ruby is one quarter of the new condemned old ships to the breaker’s yard. BP decided to embark on an ambitious Gem-class LNG fleet.

30 Issue 2 2009 BP MAGAZINE BP Faces Highlights from history

SIR ROBERT HORTON Chairman & chief executive 1990-1992 “I had been working on a major cultural change programme at BP for a couple of years before I became chairman, so I was able to announce it as ‘Project 1990’ immediately after I took office. The programme was all about reducing the complexity and extraordinary bureaucracy that had built up within the company, and it called for greater openness, accountability and responsibility, in much the same way as Tony Hayward’s current ‘forward agenda’ does today. It hinged on the assumption that information confers responsibility, not power. I knew at its launch that Project 1990 would be important, one way or another. Looking back, I think it is now generally acknowledged that it transformed BP quite a lot, and the company wouldn’t have been the same without it. All the other major oil companies went through the same process, but later than BP. But trying to convince the media that it wasn’t some cynical exercise to reduce staff numbers during a time of deep recession meant it took a lot longer to implement. It also left me tagged as ‘Horton the Hatchet’, which was something I would rather not have following me around. But there were so many happier things to compensate and the media do like their tags.” ■

Interview: Nick Reed

Illustration> James Carey BP MAGAZINE Issue 2 2009 31 ➔ brand Advertising> Distinctive campaigns Report> Tim Wickham Photography> BP Archive THE ART OF ADVERTISING Since the 1920s, BP has been creating iconic and memorable advertising. From posters to television campaigns, it is famous for its distinctive approach. As a result, BP adverts are instantly recognisable. “With most print advertising, for example, only around 15% of people can correctly identify the company if you remove its brand and logo. With BP, the recall rate is nearer 60%,” says director of brand Duncan Blake. “The public recognises the look and feel of our advertising.” Such influential advertising has always given BP a strong competitive advantage. The challenge is to stay ahead. Today, the message is that BP leads the way in securing dependable energy by investing in both conventional and alternative sources. Advertising today is a more complicated and competitive business than ever. “You have to be far more sophisticated and respond quickly to changing conditions, which makes it a real challenge,” says Blake. “BP’s brand communication is particularly effective and often cited as a good case study. It’s a tradition we intend to uphold.” Iconic imagery: adverts such as this one (bottom), designed by Clement Cowles in 1933, were used on lorries, Over the next few pages, BP Magazine often regarded as travelling art galleries. Wit and humour were used, as well as visual impact, to entertain the highlights three great eras of BP customer. Above, a poster promoting BP Super was advertising. produced by distinguished French poster artist Savignac. BP Super was to become the first product to be featured in simultaneous print and television campaigns.

32 Issue 2 2009 BP MAGAZINE Proud sponsor: BP sponsored many speed record and flight attempts, including those 1930s/1940s/1950s > made by Captain George Eyston (above). Like Art of advertising other sponsors, BP took any opportunity to advertise the fact that drivers and pilots had This classic period of brand promotion saw used its products in their pursuit of glory. BP inspire in the art of advertising. It was Below, Edward McKnight Kauffer created one of the first artistic adverts, using the recently spearheaded from the 1930s by the newly opened Whipsnade Zoo as a theme. formed Shell-Mex and BP (SMBP) – a joint marketing venture. Only wealthier people could afford cars, so advertising appeared mainly in the quality press. SMBP publicity manager Jack Beddington was a patron of the arts who encouraged young unknown artists, as well as famous names, to design adverts. The Whipsnade Zoo advert by commercial artist Edward McKnight Kauffer was one of the first to be commissioned. Adverts were humorous and witty, with strong visual impact. Links to racing wins and speed records achieved with BP products were promoted, including Malcolm Campbell, holder of many land and water world speed records, and racing legend Stirling Moss, who was the first BP ‘Superman’. The reintroduction of branded petrol in the 1950s triggered new advertising opportunities as garages began to sell single brands. Garages became brighter and more modern, with consistent advertising to strengthen the brand image. BP burst on to TV screens in 1957 with BP Super.

BP MAGAZINE Issue 2 2009 33 Advertising> Distinctive campaigns

1980s/90s > On the move Hollywood glamour: by the 1990s, BP was using television During the 1980s, the focus shifted from advertising – and sometimes print to television. The 1980s began with Hollywood directors – to promote its messages. Above, BP at its best. One of the most memorable, in the BP on the move campaign 1984, showed BP as a successful British showed the range of company with diverse activities. By the end transportation using BP products. Left, Elevator was of the decade, BP launched the For all our directed by Steven Spielberg tomorrows campaign, highlighting how it and was designed to showcase was working to solve tomorrow’s problems the different types of business through technical expertise, social BP was in. Below, the For all our tomorrows campaign responsibility and environmental care. highlighted the company’s By 1992, it developed BP on the Move, early efforts to diversify its with planes, trains and trucks bearing energy mix. down on a service station. This period marked a renewed emphasis on marketing activities. Centralised global brand development ensured greater consistency and higher quality in its advertising. Just as earlier advertising called on the skills of great artists, this period saw BP enlist Hollywood’s creative geniuses. Ridley Scott (Alien, Blade Runner) directed For all our tomorrows and Industrial Light and Magic – George Lucas’s (Star Wars) company – created an advert showing oil pouring over Rodin’s sculpture, The Thinker. Meanwhile Elevator – in which a pizza delivery boy visits the different BP departments – was directed by Steven Spielberg, with music by John Williams.

34 Issue 2 2009 BP MAGAZINE 2000- > The new BP The new century began with a new brand and ‘beyond petroleum’. It signalled BP’s arrival as a global energy company. The new brand was quickly established and it provided BP with a positive image that helped the company stand out from the competition Last year, it was once again time to refresh the advertising message. “Generally speaking, every four or five years we need to think about where to go next,” says Blake. “Like many things in business, you can’t stand still for too long; you have to move on, or your competitors will catch up. Having said that, the best brands evolve slowly over time.” The icons used in the current advertising represent oil, gas, wind, solar and biofuels. “They are proving very effective at getting across how we invest in a combination of hydrocarbons and low carbons to provide for a dependable energy future. They are all important,” says Blake. New media and changes to traditional media have transformed the way companies advertise. Online activity can account for nearly half BP’s advertising budget in some campaigns. “Online advertising enables us to be more targeted, to focus on niche websites and develop deeper relationships with consumers. You can link them to our website and measure how many people interact and click through.” ■

New look: a new brand required new advertising (above) to promote BP’s global scope and scale. Since then, its campaigns have increasingly focused on its ability to provide energy diversity to benefit the environment and provide security of supply (below). Specific product advertising is still used, such as the recent BP Ultimate campaign promoting ‘more performance, less pollution’.

BP MAGAZINE Issue 2 2009 35 Viewpoint> Mutual advantage

United Kingdom Persia Indonesia Azerbaijan

Responsible operations

BP’s license to operate is founded on the principle of mutual advantage – seeking to act in a manner that benefits both company and community. Over time, this concept has meant many things. In the early 20th century, it meant constructing houses, schools and clinics to ensure its refinery staff in both Persia and Wales had access to living quarters, education, social activities and healthcare – in Persia, Dr Morris Young developed a fully-fledged hospital to help improve the health of local communities. In 1968, it meant the creation of the UK Schools Link programme – still going strong today – and more recently the creation of the A+ for Energy programme in the US, both designed to encourage schoolchildren to study science. More recently, BP has sought to build local content and participation in its operations, by developing skills and businesses relevant to the energy industry, through initiatives such as the Azerbaijan Enterprise Centre. In countries such as Angola and Trinidad & Tobago, it means providing local technical training, to develop national skills. Responsibility also means working harmoniously and positively with communities nearest to its operations. In Indonesia that meant the successful relocation of a village – complete with housing and healthcare programmes – in order to develop the country’s gas reserves, while in Alaska, it means working with indigenous communities and supporting efforts such as the Alaska Native Heritage Center. In wider development-related issues, BP supports several initiatives designed to promote the effectiveness of economic development in countries rich in natural resources. It has also embedded its commitment to respect human rights through various policies and practices, as well as in several significant investment agreements.

REPORT: LISA DAVISON / PHOTOGRAPHY: BP ARCHIVE / BP IMAGESHOP

36 Issue 2 2009 BP MAGAZINE US Trinidad & Tobago United Kingdom Alaska

Angola

Fully prepared: safety training at the ESSA facility in Angola is compulsory for all BP staff. Part of that training includes advanced fire-fighting techniques.

BP MAGAZINE Issue 2 2009 37 ➔ ex ploration + production Extreme frontiers> Alaska NORTHERN EXPOSURE

38 Issue 2 2009 BP MAGAZINE Report> Frank Baker Photography> Marc Morrison / BP Archive

BP’s relationship with Alaska stretches back 50 years to a time when the company had lost its dominance in the Middle East and was desperate to find the next big thing. The searing heat of Persia was swapped for the arctic wilds of Alaska’s North Slope and the discovery of North America’s largest oil field.

Barren landscape: geologists probe the foothills of Alaska’s Brooks Mountain Range (above). Middle, the Trans-Alaska Pipeline snakes south from the North Slope. Below, the BP-operated Northstar field in the Beaufort Sea.

BP MAGAZINE Issue 2 2009 39 Extreme frontiers> Alaska

Alaskan explorer: geologist Roger Herrera (above left), on a BP field survey in 1960 and in 2009 (opposite).

samples,” he recalls. Sometimes, food itself Silence. That was the first thing Roger Herrera noticed became a problem if the airplane couldn’t after a small helicopter had set down himself and four other get to their camp for resupply. “Fog and other bad weather sometimes kept the BP geologists in the foothills of Alaska’s Brooks Mountain supply plane away for a week or longer,” Range, hundreds of kilometres north of the Arctic Circle, and says Herrera. “When we ran out of food, far removed from civilization. we’d eat fish caught in the streams and lakes. On reflection, it seems like we spent quite a bit of time looking at the sky, It was the summer of 1960, and Herrera Captain James Cook and Ernest Shackleton listening for airplanes or helicopters.” was a member of BP’s first geological field – who had journeyed to the far ends of the survey team in Alaska, which only a year earth. Yet, aged 24, Herrera had only First maps earlier had become America’s 49th state. travelled to tropical climes. Herrera says that by using aerial The company’s exploration manager, Peter The silence didn’t last. It was soon photographs and information gathered from Cox, had flown over the northern reaches interrupted by the high-pitched drone of the ground, the team began drafting the in 1959 and recognised large surface mosquitoes. Clouds of them. Through the area’s first maps. But geological evidence formations, such as anticlines, similar to rest of the summer, only a gust of wind or a soon prompted BP’s explorers to look farther those of Iran’s Zagros Mountains. At Cox’s persistent breeze kept the insects at bay as north, towards the Arctic’s coastal plain. recommendation, BP sent geologists to the team set out each morning to gather After drilling a series of unsuccessful wells explore this remote region. In 1959, BP rock samples and collect other geological in the foothills region and the Colville River opened its first office in downtown data. “We were as prepared as anyone can Delta, to the west of Prudhoe Bay, BP shifted Anchorage to support this ambitious effort. be, with head nets, repellent and netting in its attention to the east and began seismic “My geology professor at Oxford our tents,” says Herrera. “But it definitely reflection surveying around the present-day University was good friends with BP’s chief took some getting used to.” Prudhoe Bay. Through these surveys, BP geologist, Norman Falcon,” recalls Herrera. Bears were also a concern, but Herrera gained sufficient confidence to bid in three “Falcon asked my professor if he would says they had very few problems, as long as state lease sales in the 1960s – and gained a recommend a student to go on the survey, they were careful about food storage and strong acreage position in the area now and I was the lucky one.” disposal. They never carried high-powered known as Prudhoe Bay. Born and raised in the UK, Herrera had rifles for protection. “By the end of the day, Atlantic Richfield (ARCO), one of BP’s been fully steeped in the epic lore of the they were too heavy, bearing in mind we heritage companies, was also actively country’s renowned explorers, including always had a rucksack full of rock exploring the area. In March 1968, ARCO

40 Issue 2 2009 BP MAGAZINE Barrow ARCTIC OCEAN RUSSIA Umiat R i ve r Colville Prudhoe Bay oilfield LE Pipeline CIRC ARCTIC BERING Fairbanks SEA kon CANADA Yu er iv ALASKA R Anchorage AREA ENLARGED Valdez JUNEAU

kmkm250250 500500 PACIFIC OCEAN

“Fog and other bad weather sometimes kept the supply plane away for a week or longer. When we ran out of food, we’d eat fish caught in the streams and lakes.” Roger Herrera announced a major strike at Prudhoe Bay. first oil. “We had 24 oil wells. Some of these several others on the team, had a strong BP continued drilling, and on 13th March, were Saudi-sized monsters capable of background in process engineering. 1969 made announcements that it too had producing more than 25,000 barrels per day, “Collectively, we had the right mix of discovered oil – confirming ARCO’s with enormous pressures. We had to be people to troubleshoot and get the bugs out discovery. careful how we opened the chokes, or valves, of the new equipment and systems,” says While ARCO captured newspaper on those big producers. All the controls, Brott, now an operations support manager headlines, and reaped the glory of feeder pipelines and related equipment had at the BP-operated Northstar field. Prudhoe’s discovery, BP would later prove to be tested and retested. There was that its acreage held more than half the definitely a learning curve as those first Plateau rate field’s recoverable oil – then estimated at barrels of oil flowed into the pipeline.” Within months, oil production ramped up around 9.6 billion barrels, along with Before joining BP in 1977, Brott worked to 250,000 barrels per day, and by the around 26 trillion cubic feet of natural gas. at Texas National Chemical Co and, like following year, with the second gathering The three-year construction of the centre operational, oil production reached $8 billion, 1,300km (800-mile) Trans- 1 million barrels per day. The 1.5 million Alaska Pipeline (TAPS) from Prudhoe Bay barrel plateau rate was achieved in 1981 to Valdez, on Alaska’s southern coast, is still and sustained until 1989, when the field considered one of the greatest engineering began its gradual, but predicted, decline. and construction feats. Requiring around Jim Barrett, currently North Slope safety 30,000 workers from 1974-77, the 120cm team leader, arrived on the Slope in 1974 to (48-inch) diameter pipeline crosses three help get a critical facility – the central mountain ranges, 600 streams and rivers power station (CPS) – up and running. In a and the Denali fault – an area known to be few years, it would become one of the seismically active. Designed and built to largest power stations in Alaska, capable of transport up to 2 million barrels of oil per providing power for a city of around day to tanker ships at the Valdez terminal, 80,000. To this day, it is the sole source of the pipeline received its first oil on the electric power for Prudhoe Bay production morning of 20th June 1977. operations, and plans call for its expansion. BP’s Lowry Brott, then a member of the “When we flew into Prudhoe Bay for the commissioning team at the first facility to very first time in 74, there were very few Historic moment: journalists, dignitaries send Prudhoe Bay oil to the pipeline, says he and others huddle around the Alaska lights,” he recalls. “Our camp was a small remembers intense months leading up to pipeline during the 1977 startup. trailer unit, and electrical power came from »

BP MAGAZINE Issue 2 2009 41 Extreme frontiers> Alaska a small diesel generator. It was a bootstrap recovery of the oil in place – which experts of Barrow to other population centres operation to get the CPS operational to say is unheard of for super-giant oil fields across the state. provide that first power to the field.” throughout the world. “It is clear to me now that Alaska may TAPS – designed and built by Alyeska The success of BP and its partners in well not have survived as a state had not oil Pipeline Service Co, a consortium of oil optimising North Slope oil production over been found and produced,” notes Willie industry majors, including BP – grabbed the past three decades spurred an economic Hensley, a native Alaska leader, former most of the headlines in the 1970s and bonanza in Alaska that has also benefited member of the Alaska Legislature and 1980s. But development of Prudhoe Bay oil the nation, providing a significant portion recently published author. “Oil revenues field facilities and continued expansion of of the country’s domestic oil production have enabled Alaskans to have a lifestyle the field’s infrastructure, such as the power for more than 25 years. comparable to many states in the lower 48 station, gathering centres and flow states, if not better.” stations, and drilling of hundreds of oil Royalties and taxes Former Alaska governor Bill Sheffield wells, was a significant undertaking, University of Alaska, Anchorage economist adds: “From healthcare to education to requiring an investment of more than Scott Goldsmith calculates that since North social issues, oil benefits every resident of $30 billion by BP and its partners. Slope oil production began in 1977, around this state. Oil provides around 85% of the Development of other oil fields over $77 billion has been paid by petroleum state operating budget, and this money succeeding years – some 24 in all – producers to the state treasury in oil affects the entire state and its people.” required billions more in investment. royalties and taxes. Around $64 billion has Today, BP operates 13 of those fields. been paid by the industry over the same Through the advancement of drilling period into the private economy through technology, enhanced recovery techniques payrolls and purchase of goods and services. and improved reservoir management, Oil revenues also help build Alaska’s Prudhoe and some of the other larger North savings account – its Permanent Fund – Slope oil fields have yielded many more which until the recent US economic barrels than experts predicted. Prudhoe downturn, had peaked at more than alone, in which BP has a 26% interest, has $40 billion. Once a year, all Alaska produced more than 11 billion barrels, and residents take a share of the fund in the it is widely believed 2 billion more barrels form of a substantial dividend cheque. are recoverable. This is roughly 60% Over the past half century, Alaska has grown as a state and the lives of its citizens have improved dramatically, from the most northern community

Did you know? ■ It took 38 days for the first supply of oil from Prudhoe Bay to travel through the 1,300km (800-mile) Trans-Alaska Pipeline to the terminal at Valdez. The first oil left Prudhoe Bay on 20th June 1977 ■ At the time of its construction in the 1970s, the Trans-Alaska Pipeline was the most expensive private construction project in American history.

42 Issue 2 2009 BP MAGAZINE Project engineer Anna Horstkoetter is championing drilling in the Arctic part of a team that is embarking on a National Wildlife Refuge (ANWR) in multi-billion dollar project to renew and northeastern Alaska, which geologists update Prudhoe Bay infrastructure. Like believe contains billions of barrels of oil. many BP newcomers, she is optimistic “There were more than 20 votes taken in about the company’s future in Alaska. US Congress over 25 years, and only two of “People talk a lot about the past, but with those votes failed,” he says. “But, inevitably, the company’s plans moving forward to legislation got blocked at the President’s develop light and heavy oil, and desk or in the Senate,” he says. commercialise the Slope’s natural gas, I Herrera says that after the Prince can see a promising 50-year future.” William Sound oil spill in 1989, industry Logistics support: when it is not cold enough BP Alaska’s new president, John Mingé, is for ice roads, hovercraft are used to transport never gained enough momentum to also bullish about the company’s long-term workers and material at Northstar Island. convince Congress that ANWR could be position in the state, and its plans for the developed in an environmentally future. “We have built a strong and diverse responsible manner, as was clearly workforce and are making the large feet of natural gas waiting to be developed, demonstrated over the years at Prudhoe investments necessary to create a the next 50 years could be as rewarding as Bay and other North Slope oil fields. sustainable, long-term future,” he says. the previous 50. “However daunting the task, you never Mingé adds that BP Alaska’s Liberty give up,” Herrera says with a sage smile. Workforce growth project, currently underway, will push the “That was part of my training as a young Over the past two years, the company’s limits of extended reach drilling technology geology student back at Oxford.” workforce has grown by more than 40%, to to tap an offshore field that contains an On a popular hiking trail near Alaska’s almost 2,000 employees, and its contractor estimated 100 million barrels of recoverable largest city, Anchorage, Herrera, now 73, workforce has risen to more than 6,000 jobs. oil. Production is expected to begin in 2011. looks up at the wind-scoured mountain The last time the Slope’s workforce reached Liberty will require a special drilling rig peaks, studying their relatively young this level was in the 1970s and early 1980s that is currently being constructed in the geologic features. There’s a distant look in when the Prudhoe Bay field was in lower 48. It will be the largest land rig ever his eyes reminiscent of his early days as a development. “BP Alaska has invested used on the North Slope. field geologist for BP, half a century ago, around $30 billion over the past decade to Roger Herrera retired from the company when he spent a lot of time peering at the manage the light oil decline,” says Mingé. in 1993. For the better part of his career horizon, listening to the silence, or Most agree that with 20 billion barrels with BP and afterwards, he has worked perhaps, the sound of an airplane or a of heavy oil in place and trillions of cubic relentlessly as an industry lobbyist, helicopter. ■

“All the controls, feeder pipelines and related equipment had to be tested and retested. There was definitely a learning curve as those first barrels of oil flowed into the pipeline.” Lowry Brott

BP veteran: Lowry Brott was on the North Slope when first oil production began in 1977. He is currently Northstar operations support manager.

BP MAGAZINE Issue 2 2009 43 ➔ evolving technology Report> Nina Morgan Illustration> Matt Herring

FROM SCIENCE FICTION TO SCIENCE FACT From satellites to seismic, many of the familiar technologies used in the energy industry today were once just a gleam in a science fiction writer’s eye. Nina Morgan talks to BP’s science and technology gurus to explore the company’s technology past and to peer into the future.

44 Issue 2 2009 BP MAGAZINE BP MAGAZINE Issue 2 2009 45 Spotlight> Technology evolution

group of from the Geological Society of London. “BP has a track record of geologists gather in one of BP’s interactive Harrison, who joined the APOC – the environments to explore for hydrocarbons. forerunner of BP – as a geologist in 1918, applying technology in ByA moving a computer mouse, they are carried out exploration work for the developments on a able to manipulate three-dimensional company in Honduras, Mexico, British significant scale in very seismic data to allow them to take a North Borneo, Peru, Jamaica, Venezuela, detailed look inside a potentially Trinidad and Colombia, as well as in Persia difficult places.” interesting structure located many (now Iran), before resigning in 1938 to kilometres below the surface in a become a lecturer in geology at Oxford David Eyton previously unexplored area. After University, UK. examining the structure closely from all Harrison’s description of his exploration angles and considering all the evidence, days as ‘exciting’ was something of an they recommend drilling. Some months understatement. In his day, exploration later, their predictions are verified when fieldwork was carried out on foot and the well encounters oil. Then, a long and horseback, and geologists camped out detailed process of appraisal and under the stars while mapping vast development of the find begins. swathes of unexplored territory in their But it wasn’t always like this. In the early search for promising oil seeps, anticlines 20th century, a career in oil exploration (dome-shaped structures) and other was a very tough option. “I was lucky that promising leads. In the same speech, my colleagues in the Anglo-Persian Oil Harrison recalls ‘strolling’ about the Zagros Company [APOC] found exploration as Mountains in Iran with a colleague for exciting as I did,” recalled Dr John Vernon almost eight years while “we mapped upon Harrison in 1961, in his acceptance speech the clean paper on our plane-tables the on receipt of the prestigious Lyell Medal topography and geology of some 155,000

46 Issue 2 2009 BP MAGAZINE square kilometres technologies that the hydrocarbons, such as heavy, viscous oils, (60,000 square early explorers would or very tight gas, which is contained in miles) of southwest have found difficult to reservoirs where the permeability is Iran as we saw it on the imagine. “By and large, the extremely low. ground.” He and his development of new exploration, drilling “BP has a track record of applying colleagues regarded office and laboratory and production technologies over the past technology in developments on a significant work as soft options; and the number of century and a half have enabled people to scale in very difficult places,” says Eyton. “It mules who died in Harrison’s service understand the provenance of oil and gas doesn’t matter whether it’s Azerbaijan or became a byword among the APOC staff. in the world – how it’s made and how it’s Alaska, the deepwater Gulf of Mexico or the trapped – and to begin to push into new middle of the rainforest in Colombia, we Yesterday, today and tomorrow frontiers in a number of ways,” explains consistently undertake developments at the In Harrison’s day, onshore surface David Eyton, BP’s head of research and frontier.” And, he adds, “I would not geological mapping was still the only way technology. underestimate the extent to which to extrapolate – or ‘see’ – the geology and The big breakthroughs, Eyton notes, technology is going to march forward and identify potential hydrocarbon-bearing range from the development of seismic continue to change our industry.” structures below the ground. Before the technology, which makes it possible for Predicting what these future widespread adoption of rotary drilling geologists to ‘see’ underground more developments will be is far from simple. “If techniques, it was only possible to drill accurately than ever before; to rotary you think of the accelerating pace of wells to test prospects located at relatively drilling, that allows faster and more technology today, I think it now makes it shallow depths. targeted drilling to greater and greater even more difficult to project 100 years These days, offshore exploration is depths. These developments, in turn, have into the future than it would have been common. The oil industry routinely drills made it possible for the industry to move when APOC was founded in 1909,” says to great depths – wells that penetrate over into new and challenging frontiers, both Steve Koonin, BP’s chief scientist. But, 9,100 metres (30,000 feet) are not unusual – offshore and in harsh terrains, and to nevertheless both Eyton and Koonin are and takes advantage of sophisticated exploit the more difficult-to-produce able to spot a few trends. »

BP MAGAZINE Issue 2 2009 47 Spotlight> Technology evolution

“We are starting to understand the elements that make up life, how those elements fit together into Evolutionary functioning systems and how they change.” developments Steve Koonin that could change the world

The most predictable developments, developments in environmental Finding more energy and protecting notes Koonin, are evolutionary ones – technologies, such as carbon capture and the environment will be the key advances that build on existing storage, are already taking place. drivers for technology developments technologies (see right: evolutionary But, Koonin and Eyton argue, the real in the next 100 years, predicts Steve developments that could change the revolutionary developments – the sorts of Koonin. The game-changing energy world). These include improvements in things that now excite the imaginations of technologies we can look forward seismic, electro-magnetic and gravity science fiction writers – are more likely to to include: measurements, and satellite imaging emerge from unexpected areas. Some of the techniques to enhance exploration and most important, says Eyton, may well ■ Battery-powered electric vehicles. development; as well as the development spring from nanotechnology, or molecular- These are already under of smaller and more sensitive sensing scale engineering. “You can imagine that development by some companies devices to see inside wells, and improved nanotechnology could enable you to create ■ Low-cost and efficient photovoltaics. chemical and physical technologies to nano-bots – tiny devices that can go off and BP and other manufacturers are now assist in development and to improve oil do whatever you want them to do in working together to bring down recovery. New technologies to make it environments that humans cannot reach,” costs and improve efficiency to make possible to exploit unconventional he muses. “The ability to design structures solar cells available for more resources such as tar sands and heavy oil and materials that function at the nano- widespread use more efficiently and in an environmentally scale could have a vast range of ■ friendly way, along with methods to applications in the energy industry (see Small nuclear fission reactors that economically make use of extensive left: thinking small). There are areas of operate on scales of a 10th of a reserves of methane hydrate, or methane nanotechnology that could literally change gigawatt. BP is not involved in ice – a solid form of water that contains a the energy landscape.” this area large amount of methane within its crystal ■ Carbon capture and storage. This is – also look to be on the cards. Further Life changing an area where BP is heavily involved. Even more speculative and exciting, say “You could argue whether this is Eyton and Koonin, will be the application evolutionary or revolutionary,” says Thinking small of biosciences – biology and the life Koonin. “But the ability to really sciences – to the energy industry. “We are practise carbon capture and storage Just imagine this, says David Eyton. starting to understand the elements that on a large scale would really change Thanks to developments in make up life, how those elements fit the game.” nanotechnology, in a 100 years we together into functioning systems and how ■ Finding biological or chemical could look forward to: they change,” says Koonin. A key link means to suck CO2 out of the ■ Nano-sensors, to obtain information between biology and the energy industry, atmosphere. “A wild idea,” admits where current technology cannot he points out, is carbon. “Living things are Koonin, and not one that BP is penetrate, such as deep in oil and mostly composed of carbon,” he explains, working on. But, he adds, “you never gas reservoirs. “so you might expect that there will be know!” ■ Nano-sorting machines, which powerful synergies between our ability to ■ Nuclear fusion. “If we could develop could make it possible to feed in a understand and manipulate life, and our working fusion reactors a 10th of the mixture of gases and separate out ability to manage carbon, either by scale of reactors such as the the CO for subsequent producing it in the form of hydrocarbons, 2 International Thermonuclear sequestration and long-term storage. or controlling its release, in the form of Experimental Reactor, this,” says ■ Nano-structures, for converting carbon dioxide (CO ), into the 2 Koonin, “would change the game.” energy from one form to another, environment.” for example to turn sunlight into Eyton agrees. “The sophistication of ■ Superconducting electricity electricity more cost-effectively biological processes, such as transmission lines. An area where than today’s silicon-wafer-based photosynthesis, which have evolved BP is not involved, but one, notes photovoltaic cells. naturally, is way in advance of the physical Koonin, that could really change the ■ Nano-materials, capable of storing and chemical processes we currently use in energy scene by making it possible and releasing energy more our industry.” For a start, he points out, no to move huge amounts of electricity efficiently than existing batteries. one has yet managed to create a method for around over vast areas. converting sunlight into hydrocarbons as »

48 Issue 2 2009 BP MAGAZINE BP MAGAZINE Issue 2 2009 49 Spotlight> Technology evolution

“One hundred years from now, I would imagine that we will have a remarkably sophisticated Energy Biosciences Institute understanding of the application of biological, The Energy Biosciences Institute, a chemical and physical processes.” partnership between BP, the University of California, Berkeley, the Lawrence David Eyton Berkeley National Laboratory, and the University of Illinois, was established in November 2007. The Institute, which is efficiently as plants have. Thanks to and microbes are both capable of taking solely funded by BP, carries out research advances in biology, it’s now possible to CO2 out of the atmosphere, they could, in in all areas of biology related to energy. map the genome of a living form to gain a theory, prove to be powerful This ranges from genetics, to the better understanding of how it works environmental allies when it comes to agronomy of feedstocks, the conversion naturally. This knowledge, could, he tackling the CO2 problem. These of ligno-cellulose material into sugars, predicts be adapted for different purposes. possibilities, and more, are currently being and the conversion of sugars into fuel For the energy industry, the possibilities explored by scientists working in the BP- molecules. “Our mission,” says Institute are many and exciting. Today’s biofuels – funded Energy Biosciences Institute (see director Dr Chris Somerville, “is to liquid hydrocarbon fuels that contain right: Energy Biosciences Institute). harness the potential of bioenergy, to energy captured recently from the sun by “One hundred years from now, I would make discoveries and commercialise plants – are just the start. “But imagine a imagine that we will have a remarkably realities out of these, which could plant designed to capture sunlight and sophisticated understanding of the benefit the world.” For more engineered to make whatever you want – application of biological, chemical and information, visit: be it plastics or fuels,” says Eyton. Microbes, physical processes,” says Eyton. “And by www.energybiosciencesinstitute.org too, he predicts, have capabilities that may then, I hope we will be able to use this prove very useful. Microbes that move understanding to supply effective, reliable, around in the subsurface could, perhaps, be secure energy and energy products that are induced to create chemicals or changes in non-damaging to the environment.” the environment to make oil flow more Koonin agrees. “Whatever the future holds, easily, and thus enhance oil recovery. Or it thanks to our growing understanding of may prove possible to draw on the skills of biological and physical processes, we can bacteria that are capable of converting coal certainly look forward to great or heavy oil underground into opportunities for optimism and hydrocarbons that can flow. Since plants improvement.” ■

50 Issue 2 2009 BP MAGAZINE BP Faces Photography> Marc Morrison

“We knew that polyester was a key synthetic fibre but we didn’t have a clue that demand for it would grow at the rate it did.”

LIFE CHANGING Del Meyer / PTA chemist

Many would agree that the 1960s were incredible: man landing on the moon, the hippie movement and the discovery that made polyester an enduring part of our lives. You can thank Delbert Meyer, retired Amoco chemist, for the bottle of water at your side. It’s made from a raw material derived from crude oil processing: purified terephthalic acid (PTA). So is most, if not all products, using any form of polyester. In 1963, Meyer discovered the process that changed our lives. “We knew that polyester was a key synthetic fibre, but we didn’t have a clue that demand for it would grow at the rate it did,” he says. “Our customers were anxious to move into this fast-growing market and really put the heat on Amoco to produce a lot of PTA.” They did, and today BP is a leader in PTA production, with a global market share of 21% on an equity basis. So look for the PET mark (PTA is in most PET) on your bottle of water and give a nod to this innovative scientist. ■

BP MAGAZINE Issue 2 2009 51 Special feature> 100-year timeline

1909 A century of adventure 52 Issue 2 2009 BP MAGAZINE 1866 1870 1874 1898 1899 1901 The Atlantic Atlantic begins Atlantic joins Thirteen German Charles ‘Cheers’ English businessman Petroleum Company, refining oil. Rockefeller’s mining companies Wakefield founds William Knox D’Arcy the ‘A’ in ARCO, is Standard Oil Trust. form an association CC Wakefield and gets exclusive rights formed in to find uses for Company, supplying to search for oil in Philadelphia to store Standard Oil of Ohio benzene – a waste lubricating oils to the southwest Persia. His and ship oil products. – later Sohio – is product from the railways in Britain. entire fortune will go incorporated, kick- 1889 coal coking process. into the hunt. starting John D Rockefeller forms Most people called Rockefeller’s oil Standard Oil of the association BV – empire. Indiana, which will short for Benzol- later become Amoco. Verband.

1907 A medical doctor, Morris Young, joins Reynold’s exploration team in Persia. He will go on to develop a network of clinics and become a legend in the region.

1970 To almost everyone’s surprise, BP discovers oil under the North Sea. “There won’t be oil there,” Sir Eric Drake, BP’s chairman, tells Reuters in April. Six months later, crews find the Forties field, which will eventually 1965 produce 400,000 barrels of BP discovers the West Sole field. It crude oil a day. Five years is the UK’s first gas discovery, and later, Queen Elizabeth II will is the beginning of the North Sea symbolically start the flow as a hydrocarbons province. of oil from Forties.

1965 1966 1967 1968 1969 1970 BP opens the UK’s Atlantic Refining BP unveils the ARCO and its partner BP discovers oil Like most oil first self-service merges with world’s first all- Exxon, discover the under Alaska’s North companies, BP station. Richfield Oil to form plastic service largest oilfield ever Slope. The company responds to industry Atlantic Richfield. station in England. found on US soil, in has no infrastructure uncertainty during The company adopts northern Alaska, in the US, so one the 1970s by a bold new symbol, prompting rival BP year later, takes a diversifying its the ARCO spark. to get back to its 25% stake in Sohio in business and BP own search nearby. order to refine and Proteins is launched. market its Alaskan Over the next decade, Castrol Ltd is crude. In 1971, BP BP develops interests acquired by the Castrol GTX is becomes the in coal, gold, Burmah Oil launched. It will majority Sohio telecommunications Company. become the most shareholder. and computing. Many famous motor oil will be sold off by the ever made. early 1990s.

53 Issue 2 2009 BP MAGAZINE 1903 1908 1911 1914 Sohio oil lubricates the Knox D’Arcy’s explorer, The US Supreme The British four-cylinder engine George Reynolds, and Court dismantles the government becomes that keeps the Wright his team strike oil. Standard Oil Trust. a major shareholder Brothers’ plane aloft “If this is true, all our 1909 The flow of oil into in Anglo-Persian, during their first flight. troubles are over,” THE ANGLO-PERSIAN OIL Atlantic’s refineries following a speech Knox D’Arcy beams COMPANY – LATER BP – abruptly stops. In near by First Lord of the when he hears desperation, Atlantic’s Admiralty Winston the news. IS FORMED. president is said Churchill urging 1905 to have urged his Britain to secure a Richfield Oil, the ‘R’ CC Wakefield develops lubricants employees to ‘go dedicated oil supply in ARCO, is founded for cars and airplanes. Wakefield find the company to protect its global on the US west coast. researchers make a signature discovery. some crude.’ interests. It quickly grows to be A measure of castor oil – a vegetable one of the region’s oil made from castor beans – makes leading gasoline a motor oil of superior consistency. marketers. They call it Castrol. 1914 Castrol begins its sponsorship of the world land speed record, sponsoring big name drivers, such as Major Henry Seagrave, Captain George Eyston and Sir Malcolm Campbell. Between 1922 and 1939, the world land speed record is broken 23 times, 18 of them with Castrol in the engine. BP sponsors similar record attempts.

1978 Smurf mania hits Britain. BP has been giving away Smurf figurines in its European stations since the 1960s, and their arrival in Britain has families queuing at the pumps.

1970 1971 1974 1979 1981 1983 Amoco launches the Colonel Ghaddafi Stimulated by oil Iran’s oil industry is BP Photovoltaics is South Atlantic battle first unleaded regular nationalises BP’s supply vulnerability, fully nationalised, incorporated as a honours are awarded gasoline to be interests in Libya. By an active programme effectively ending BP’s wholly owned to some of the BP marketed across the end of the decade, of research is association with subsidiary of BP ships chartered by the the whole of the US, almost all Middle underway at several the country. International Ltd. By Ministry of Defence four years before a new Eastern oil will be BP research sites to 1997, BP Solar will be during the Falklands federal law requires it. nationalised. investigate single-cell one of the top five War. Amoco spends more photosynthetic plant solar manufacturers. than $100 million cultures as biomass modifying its refineries sources for protein and service station and fuel. The same equipment to process year, BP Coal is the fuel. formed. 1917 1924 1925 1926 1930 1935 Anglo-Persian buys Gasoline was in short Standard Oil of Indiana Anglo-Persian Standard Oil finds a Persia changes its British Petroleum – supply in Germany purchases an interest launches the BP large discovery in east name to Iran and the subsidiary of a during the First World in the American Oil Aviation Service, Texas. Four years later, Anglo-Persian does German company War, so BV chemist Company, which supplying fuel to a second field near the same. confiscated early in Walter Oswald spends markets under the the fledgling airline Houston is found. the First World War. the next decade Amoco trademark business. combining benzene in the eastern US. and gasoline to create a new fuel. He names it Aral, taking the ‘Ar’ from aromatic (benzene’s chemical grouping) and the ‘al’ from aliphatic (gasoline’s group).

1915 The British Tanker Company Limited is formed to carry products for Anglo-Persian. A year later, it takes delivery of the British Emperor, the first oil tanker built to the company’s specifications.

1987 1998 The British government BP and Amoco sells its shares in BP. merge. At the Despite the fanfare, it is time, it is the terrible timing as stock largest-ever markets crash on Black industrial Monday. BP acquires merger. full ownership of Sohio.

1985 1988 1991 1994 1997 2000 Standard Oil of ARCO introduces BP Nutrition is one of The ‘contract of During a speech at ARCO and Burmah- Indiana is renamed America’s first the company’s four the century’ is Stanford University, BP Castrol become part of Amoco, after its environmentally- main businesses, and signed between group chief executive the BP group. BP major brand. engineered gasoline, is the largest supplier the Azerbaijani Lord Browne accepts decides it is time for a EC-1 Regular. Within of animal feed in the government and the link between new look. After 70 three years, ARCO’s world, leading animal an oil consortium, human activity and years, the BP shield is cleaner fuels are breeder and major headed by BP, to climate change. It is retired and in its place credited with feed supplier for the develop Azerbaijan’s considered by many to a sunburst of green, removing 100 million fish farming industry. offshore hydrocarbon be the first public yellow and white pounds of pollutants Three years later, the resources. acknowledgment of is born. from the southern whole division will this connection. California air. have been sold off. Veba Oel acquires Aral. Two years later, BP will buy Veba Oel. 1951 1954 1955 1960 1962 1963 Iran nationalises its Production resumes Operations begin at The Castrol brand BV renames itself Amoco scientist oil. Anglo-Iranian at Abadan but on Kwinana refinery in is so well known Aral AG. Del Meyer invents workers evacuate different terms. Now, Australia. It will that CC Wakefield purified terephthalic and Abadan refinery just one of several become the country’s & Co changes its acid – the base closes. companies in Iran, largest refinery with name to Castrol Ltd. chemical for Anglo-Iranian a capacity of 137,000 polyester. becomes British barrels of crude oil Petroleum. per day and supply most of western Australia’s fuel needs.

1939 Second World War. Gasoline is a rationed commodity, all brands are suspended and oil is ‘pooled’. Anglo-Persian boosts oil production at an onshore field in Nottingham, England, which is eventually described as one of the war’s best-kept secrets. Some 44 company tankers are sunk during the war.

2008 BP announces it will be the oil and gas partner at the London 2012 Olympic Games.

2001 2003 2005 2006 2007 2008 BP becomes a BP becomes a major Alternative Energy is The Baku-Tbilisi- BP signs two Oil and gas sponsor and player in the Russian launched, bringing Ceyhan pipeline exploration and production begins at technical partner oil industry through BP’s renewable begins transporting production-sharing Thunder Horse, in of the Ford World the joint venture, energy businesses Caspian oil to world agreements: one the deepwater Gulf Rally Championship TNK-BP. together. markets. It is one of with the Libyan of Mexico. With a team. Using BP the longest pipelines Investment topside area fuel and Castrol in the world. Authority and Libya’s equivalent to three lubricants, the Kwinana refinery, National Oil football fields, it is team will win 27 Australia, launches Company; and a the world’s largest races, rack up 1,024 Opal, a low aromatic second with the floating platform. Its points and clinch fuel designed to help Government of reservoir lies five two constructors’ reduce petrol sniffing Oman. The kilometres (three titles over the next – a serious issue for agreements mark miles) beneath mud, eight years. many remote a resurgence in BP’s rock and salt, topped indigenous connections with the by 1.6km (one mile) communities. Middle East. of ocean.

BP MAGAZINE Issue 2 2009 54 2009 The founders of the Anglo-Persian Oil Company – the forerunner to BP – lived in a world without plastics, central heating and mass transportation. A century later, they’d be hard pressed to recognise the world around them, including the company they created. One thing that wouldn’t surprise them, though, is the impact oil has had. And while BP may have changed beyond recognition, its dedication to pushing the frontiers of discovery to bring energy to market has not.

BP MAGAZINE Issue 2 2009 55 ➔ ex ploration + production Significant discoveries> North Sea

Elder statesman: BP’s Magnus oil field celebrated its 25th anniversary in 2008. Thanks to enhanced oil recovery techniques, its life has been extended by 15 years.

56 Issue 2 2009 BP MAGAZINE Report> Helen Campbell Photography> BP Archive

BACKYARD DISCOVERIES Viewed through a sparkling new window across a car park, BP’s former Aberdeen office is soon to be demolished, just like the belief of some commentators in the 1990s that the North Sea was finished. Reflected in its new building is BP’s new North Sea vision and plan for a solid future, one that sees oil and gas production sustained for the next decade and beyond.

BP MAGAZINE Issue 2 2009 57 Significant discoveries> North Sea

The North Sea story began in 1965 with BP’s West Sole gas find. Industry expectations for oil were low, until the 1969 Ekofisk discovery off Stavanger, Norway, saw a surge of interest in the UK, leading BP to discover the Forties field off Scotland’s east coast in 1970. Onstream five years later, to a national sigh of relief that the UK was not going to be reliant on Middle East oil, Forties at its peak met a fifth of UK oil demand, and was the backbone of North Sea production for many years.

But as it and other fields matured, and new North Sea today – to development and and exotic frontiers enticed operators, production, and decommissioning. including BP, industry doomsayers all but “Our vision is very simple. We are going signed the North Sea’s death warrant, to be the best oil and gas company in the Field profile: Norway repeatedly predicting the majors’ North Sea, and we have every intention of departure. But BP is in the North Sea to stay. being here for the long run. There is BP, through Amoco, has had a With a new confidence about how to commitment to the North Sea all the way presence in the Norwegian North Sea achieve it, BP has a clear vision to become up through BP Group leadership. We have since 1965 and currently operates four the best operator in the region. fantastic people here; people who remain fields – Valhall, Ula, Hod and Tambar. “We want people to know that we are as excited about what they’re doing today Discovered in 1969 and onstream in not leaving, and we intend to be here when as they did in the beginning.” 1982, Valhall (below) is the eldest of the last drop of oil is recovered from the North Sea,” says Bernard Looney, the new Sustainable output the four fields. It produces 50-60,000 head of BP’s North Sea business. “We are BP’s North Sea oil and gas production – UK barrels of oil per day and is likely to investing more today than we were five and Norway – is expected to be about continue producing until 2050. A years ago, and undertaking a broader range 320,000 barrels of oil equivalent per day helicopter trip to Valhall is longer of activities, everything from licence (boepd) in 2009, from 350,000 boepd in than to any other field in the acquisition and exploration – the latter not 2008 and 600,000 boepd five years ago. The Norwegian sector. something necessarily associated with the company is confident of sustaining output

58 Issue 2 2009 BP MAGAZINE THEN + NOW MORTY DENHOLM> Head of wells

“Joining the sector in 1977 aged 22, after a month in the nuclear industry, was a leap of faith. Advice back then was that oil and gas was risky, a flash in the pan. Obviously with hindsight, making the move was a good decision. In the early days, contact with the beach [onshore] was via ship-to-shore radio, there was no email. You booked a call at a certain time, went to the radio room and waited in a queue for all the different rigs calling in, and you heard everyone’s conversations. Now rigs have satellite and fibre optic links and people can use the phone and email freely. Accommodation was in six-man rooms, unless you were the boss, and we had communal showers. Now, it’s virtually all two-man rooms, and with day and night shifts, you almost have a room to yourself. Do the guys these days have it easy? Absolutely!” at around 300,000 boepd for the next “These things epitomise BP’s hub decade and well beyond, and is applying strategy,” says Looney. “It is a question not strategies to manage and optimise its just of looking down, but of looking out regional portfolio. These include a and making the most of the positions that complete study of North Sea potential we have. It has allowed us to see things that that will result in a new drilling we have not seen before, and we want to do programme in 2011. much more of this.” A main focus of the North Sea business is the ‘hub strategy’, which involves BP Technical breakthroughs consolidating its position around its key field Also crucial are technological groupings, or hubs, and maximising the developments. One such example is the value of its extensive infrastructure. This 5 billion barrel Clair field, discovered in largely involves ‘tiebacks’ or satellites – Modern means: like most other 1977 and yet undeveloped for 30 years aspects of life offshore, technology linking a new well or field to an existing has changed over the years (top). until technical breakthroughs enabled BP platform to handle production – or mutually Above, BP’s new office in Aberdeen. and its partners to develop it. beneficial arrangements with third parties. “Clair is a huge complex and highly The Ula platform offshore Norway, for fractured reservoir, so the difficulty with example, is now expected to be onstream the field has always been to understand, until 2028, with reserves recovery once you start drilling and producing, how augmented by the injection of gas procured much you are going to be able to recover,” from a nearby third-party operator. And the says Dave Wall, head of operations, Clair Andrew platform, a small field that began and Magnus. “Clair needed more analysis producing offshore UK in the mid-1990s, and risk assessment than most fields before will process oil from the 25 million barrel we could justify a case for development of Kinnoull discovery, made in 2008. the reserves.” Clair has been onstream for three “We have fantastic people here; people who years and just 1% of its 5 billion barrels of oil in place have been produced to date. A remain as excited about what they’re doing 1% change in the recovery rate means today as they did in the beginning.” 50 million barrels and, Looney adds, a 50 million-barrel discovery in the North Sea Bernard Looney today “would make all sorts of headlines.” »

BP MAGAZINE Issue 2 2009 59 Significant discoveries> North Sea

Over three decades, what’s changed? One of BP’s North Sea veterans is For new graduate engineers, working in Magnus, which celebrated its 25th the North Sea meant a steep learning anniversary in 2008. According to original curve. The vital support service estimates, that anniversary would have infrastructure that has sprung up in seen the end of its operational life, but Aberdeen and Stavanger over the past enhanced oil recovery – injecting gas into three decades was not there in the early the reservoir to push the deeper oil out – is days, meaning that BP and other giving Magnus at least a further 15 years of operators carried out almost everything, production. from drilling and inspection, to catering and helicopter provision, themselves. Greater clarity Hours and roles were less regulated in Additionally, advances in seismic the 1970s and 1980s, and everyone technology have allowed greater clarity in mucked in. People speak fondly of the reservoir mapping and, consequently, the strong camaraderie that characterised drilling of previously unknown parts of Flying high: the Bruce field lies the early days, with communal TV fields. BP also has an advanced technology 340km (210 miles) northeast of Aberdeen, in the northern North rooms, makeshift cinemas and limited programme analysing the opportunities for Sea. It came onstream in 1994. contact with the outside world. There further improvement. was even an industry-standard two-cans- “The Foinaven field initially had a 10- a-day beer allowance. Although life year life that should have ended in 2007,” offshore has changed dramatically, for says Dave Lynch, head of resources. “We many of the people who’ve been around have repeated seismic surveys every two since the beginning, the North Sea has years to build up a clearer picture of the never lost its appeal. A number of BP reservoir changing over time and, in doing “The sector will continue offshore personnel even have their so, have identified additional barrels that children working offshore, sometimes we couldn’t see before, doubling resources as long as there is oil in on the same platform. And the food since sanction to around 400 million the ground, providing a apparently remains as good as ever, barrels, and extending field life to 2021. with the steaks and traditional Boxing Seismic improvements have also allowed future for our children Day seafood buffets receiving us to identify new prospects on other fields and grandchildren.” particular accolades. such as Machar East, where we drilled a new well in the third quarter of 2008, the Elzbieta Kaliszuk

60 Issue 2 2009 BP MAGAZINE THEN + NOW ELZBIETA KALISZUK> Offshore installation manager, Valhall and Hod (Norway)

“When I first went offshore in the 1980s, I didn’t meet a single other female on the rigs in technical professions. Particularly over the past four or five years, things have changed and now there are a lot of women in these positions offshore Norway. Our safety culture has also changed a lot since the early 2000s, when the sector had a lot of high-potential incidents. We have clearer roles, responsibilities and rules about how long people can work out on the platform in noise-exposed areas, and so on. This is a great place to work. Valhall has the reserves to be producing until 2050 and, from the perspective of those offshore, the sector will continue as long as there is oil in the ground, providing a future for our children and grandchildren.”

JOHN CAMPBELL> Leading the way: the Andrew Offshore installation manager, jacket leaving Nigg Bay, Magnus Scotland in April 1996. “There were around 1,500 people on results of which have opened up even more teams. And to complement the wealth of Magnus for the offshore hook-up, and it opportunities for us to pursue.” experience gained by the people who have was pretty congested. For several years BP is also seeking to drive down costs worked in the North Sea for three decades, after, we were finding old mattresses and through supply chain efficiencies and the business offers great opportunities for sleeping bags in strange areas, because working at scale where possible. Different new entrants to the sector. there were so many people and less parts of the business can learn a lot from “We are going to be here for decades yet control than we have now. We had four- each other and a new functional and we have to renew the organisation,” man cabins, and people on night shift organisation has been designed to reshape says Looney. “People ask if there are were always finding someone new in the way the business works, allow more exciting opportunities for young people their room when they woke up. I’ve communication and exchange of ideas and here, and we have lots. Here, you get to worked in maintenance, as an operations optimise staff allocation. experience a whole swathe of activities engineer, and now as offshore installation from the very beginning, right through to manager, and my son has worked on Aligning people the very end. It’s the perfect place for a Magnus recently. I’ve always stayed on “This is all about having one North Sea young person to come and learn.” Magnus, and never got bored because of organisation,” says Looney. “We have The majority of BP’s projects today were the sheer size of it, and because there’s restructured into a functional organisation not in the plan 10 years ago, but access to always been something happening.” so, instead of having different teams new technology can transform everything. working on their own areas, we are aligning Since its first horizontal well 15 years ago, people up on a discipline basis. We want to BP has developed Andrew, Harding, Clair, make sure that we don’t compete against Foinaven, Schiehallion and others, all with each other, do things with a common lens horizontal wells. Oil prices go up and and maximise our human resources. down, major banks disappear and much of “And for the first time, we have one the world is in financial turmoil. But oil hopper of reserves opportunities instead of and gas reserves that have been in the the 13 we had before, making it easier to ground for millions of years are not going step back and look at the whole picture.” to disappear overnight. That ‘one hopper, one North Sea’ ethos is All it takes is for technology to catch up apparent in the new building the moment to reveal new opportunities; the people walk in. The 1,200- strong ‘human ‘impossible’ becomes possible and the resource’ now arrives through one door entire picture changes. Who knows what only, fostering contact and information the future of the North Sea will look like exchange between individuals on different 20 years from now? ■

BP MAGAZINE Issue 2 2009 61 ➔ profile

The Forties field Report> Professor Alexander Kemp

any individual events can claim to be landmarks in the history of North Sea oil and gas, but perhaps THE ROARING the strongest is the Mdiscovery of the Forties field, which had far- reaching consequences for the development of the UK Continental Shelf (UKCS) and the wider national economy. When exploration of the UKCS began in 1964, industry interest was restricted to the southern North Sea, despite numerous FORTIESGIANT DISCOVERY THAT CHANGED A NATION blocks on offer in the central and northern regions. When the second licensing round was a risk regarding the stability of the rate was around 500,000 b/d. In the early took place in 1965, moderate interest was whole structure. In the event, all went well days, this was a mixed national blessing. shown in these blocks. Initially lukewarm, and valuable lessons were learned for the Detailed depletion policy arrangements BP decided to apply. Industry reluctance to installation of future jackets. were in place, which involved phased conduct exploration continued, but The cost of the development required the approvals of development and production. everything changed with the discovery of use of substantial external finance and The unexpectedly prolific behaviour of the giant Ekofisk field in the Norwegian resulted in the innovative Forties loan – Forties meant BP had to obtain permission sector, in 1969. In the summer of 1970, BP arranged in 1972 through a syndicate of 66 to exceed its approved production rate, commenced drilling in Block 21/10, and in banks. It was the first North Sea project- causing lively debate within government, October, the Forties field was discovered, based financing scheme. More accurately, it with some concern about the consequential ushering in a new era. was a production lending arrangement substantial oil exports. Forties lay below 120 metres (400 feet) of whereby the revenues from field production In the event, the so-called ‘upward water in an area subject to high winds and were used to service and repay the loan. At profile variation’ was approved, principally large waves. Field development in such an the time, the oil price was $2.50. because of the pressing need for further tax environment pushed the frontiers of revenues from the North Sea. By 1981, the existing knowledge. A much heavier ‘jacket’ Loan repayment top marginal rate of tax on Forties was required and innovative stress relief A further feature was the incorporation of a production exceeded 90%, with BP making equipment was developed to reduce the forward sale agreement involving a vehicle a tax payment of almost $860 million (in chance of brittle fractures, which could company, which used the loan to buy oil money-of-the-day terms), essentially based occur at low temperatures. forward from the operator who had a on the revenues from Forties that same year. The size of the field necessitated the corresponding obligation to produce The field also proved important to the deployment of four large platforms, and two enough oil to repay the loan. These features wider development of the UKCS. Facilities construction yards were identified, were subsequently repeated in several other and the associated pipeline became a magnet including Nigg in Easter Ross, which, at its North Sea deals. for new fields. Over the years, more were peak, generated direct employment for Production from Forties commenced in connected to the Forties Charlie platform or around 3,000 people. A major housing November 1975. Initial estimates put the Unity Riser platform and some 70 fields shortage necessitated the deployment of recoverable oil reserves at 240 million are currently tied in, with throughput at two ships in Nigg Bay as living quarters. tonnes, with plateau production of 400,000 around 45% of current oil production. The float-out and installation of the barrels per day (b/d). Both turned out to be Today, while no longer a part of the BP platforms were nerve-wracking, given the considerable underestimates. By 2000, initial portfolio, Forties remains a substantial size of the jackets and the vagaries of the recoverable oil reserves were estimated at producer and it is arguable that in its weather. A particularly critical episode was 347 million tonnes, making it the largest oil absence, further exploration of the region the so-called ‘crash dive’ period, when there field in the UKCS. The plateau production would have been considerably slower. ■

Forties statistic By 2000, initial recoverable oil reserves were estimated at 347 million tonnes, making it the largest oil field in the UKCS.

62 Issue 2 2009 BP MAGAZINE Libya> BusinessBP Faces profile Illustration> James Carey Highlights from history Interview: Nick Reed

LORD ASHBURTON Chairman 1992-1995 “My most important moment came while I was the senior non-executive director at BP, and was discussing the future executive leadership of the company with my non- executive colleagues. It was decided that the position of chairman and chief executive should be split – a completely new idea for BP, because the two roles had always been identical. I was in total agreement with the decision. But then, out of the blue, I was invited to become chairman! Never in my wildest dreams had I seen this coming, and my immediate reaction was to say ‘no’. On reflection, however, I concluded that my background and experience in the City made it a logical step. I also knew and liked David Simon, who was to become chief executive, and I was confident that we could make the new arrangement work. Having discussed the idea with my wife and family, who were as surprised as me, I agreed to become chairman for three years and moved my office into Finsbury Circus, on the same floor as David Simon. As to the effect it had on the company, I leave it to others to judge. I enjoyed my time as chairman immensely, and will always be grateful to David and his executive colleagues for accepting the change, and for the friendly and helpful way in which they treated me throughout my three years as chairman.” ■

BP MAGAZINE Issue 23 20092008 63 ➔ business partnership Strategic co-operation> Case studies

Shell-Mex and BP There aren’t many business partnerships that can say they endured for 44 years, UNITED especially ones between arch rivals. And yet, in 1932 – a time when availability of oil was high and the price was low – the Anglo-Persian Oil Company and Shell took the decision to join forces and create Shell-Mex and BP (SMBP), a joint UK- WITH based marketing business designed to create some order in the market, and protect the businesses from a tough economic climate. Shortly after its birth, the Second World War broke out, which THE led to the ‘pooling’ of all oil companies’ supplies and a ban on branded fuels. Its staff played a key role in the wartime Petroleum Board and the company emerged in the post-war period as a marketing tour de force. It grew to handle BEST a staggering 40 million tonnes of oil per year through the combined use of Throughout its history, BP has worked in partnership refineries, pipelines, transportation and service stations. “It had a market share at with a variety of different businesses, communities, one stage of about 50%,” remembers non-governmental organisations, government bodies, Mike McMonagle, former SMBP employee and editor of the 44 Club News. competitors and academic institutions, all with a Meanwhile, one of its most imaginative single aim – to deliver heat, light and mobility to achievements, says Charles Madge, secretary of the 44 Club, was the creation customers around the world. The key to a successful of the central heating market in the UK. partnership is one that delivers mutual advantage to “It was a brilliant marketing stroke. Because of the post-war increase in all parties, and in this BP believes it is distinctive. demand for petrol, there was a surplus of Whether it is pushing the boundaries of technology gasoil and kerosene. We created a desire in householders to install central heating with the very best scientists to develop cleaner energy, – of which most people knew nothing – working with local communities to create sustainable using these fuels. Initially, the futuristic Mrs 1970 advertising campaign business development opportunities, or testing the vigorously promoted this wonderful new product, supported by a network of fuel latest fuel or lubricant and engine advances with car distributors and installers.” Although manufacturers, BP uses its partnerships to look disbanded in 1976, SMBP’s legacy continues to this day with around 4,000 beyond traditional ways of doing business to create former employees belonging to the 44 new possibilities. Its 100-year history is dotted with Club more than 30 years after its break- up. “There was an atmosphere about the examples of this in action and over the next few pages, company,” says McMonagle. “It BP Magazine showcases just a few of them. encouraged a team spirit and people looked out for each other.”

Report> Lisa Davison Photography> BP Archive / Corbis / Rex / SPL

64 Issue 2 2009 BP MAGAZINE BP MAGAZINE Issue 2 2009 65 Distinctive partnerships> Case studies

Azerbaijan In 1994, Azerbaijan’s government signed a deal – known as the ‘contract of the century’ with a consortium of 11 companies, headed up by BP. Since then, $25 billion has been invested in the country, helping develop infrastructure to bring offshore oil and gas to international markets. This multi- national support was crucial, but local participation lay at the development’s heart, and so BP and its partners in the Azerbaijan International Operating Company, the Baku- Tbilisi-Ceyhan Pipeline Company (BTC) and Shah Deniz gas project have supported a range of initiatives – from developing Azerbaijani professionals; to the Azerbaijan Enterprise Centre, which helps local companies develop their businesses; to the Caspian Technical Training Centre to train Azerbaijani technicians; plus countless initiatives aimed at supporting sustainable community development, construction yards, pump stations and the Sangachal terminal. At the launch of the BTC pipeline in 2005, President Ilham Aliyev, spoke of the “effective teamwork and co-operation” and described BP as having become “an integral part of Azerbaijani society.”

Original equipment manufacturers Of all BP’s relationships, the one that has changed most dramatically is that with automotive original equipment manufacturers (OEMs). BP has moved from being simply a supplier of fuel and engine oil to a more integrated partner, delivering cleaner, more efficient, longer-lasting vehicles. Using its knowledge of fuels, lubricants, solar, wind and carbon management, BP also provides progressive, sustainable options to develop more efficient manufacturing processes. “By working in partnership, we are helping OEMs enhance and commercialise technology to meet our mutual consumers’ demands for more efficient and responsible personal transport,” says Bertrand Boulin, BP’s strategic account manager for Ford. Technical innovation is key and has led to the creation of performance fuels and lubricants specifically tested on the latest engines. “The difference today is we very often think and operate as integrated teams. That way, we can make a difference to an automaker’s performance and add long- lasting value to both parties. It’s a powerful combination that requires expertise, trust and commitment.”

66 Issue 2 2009 BP MAGAZINE FedEx “It demonstrates the strategic value of a ‘one’ BP,” says Richard Bartlett, accountable for leading BP’s strategic co-operation with FedEx. As one of the world’s largest delivery companies, FedEx is a major consumer of energy. In the past, it only bought some jet fuel and lubricants from Air BP. But thanks to strong executive-level relationships and differentiated offers, a partnership has developed in which BP and FedEx are working to implement wide-ranging supply, efficiency, alternative energy, marketing and logistics plans. As well as increases in the amount of fuels and lubricants BP supplies FedEx, BP is helping it reduce its carbon footprint through solar projects, fuel- efficient lubricants and bio-diesel. In return, FedEx is BP’s global courier and business reprographics provider. This integrated approach was rewarded in 2007 with the partnership award in BP’s internal recognition programme, as well as a 2008 ‘best supplier’ award in FedEx’s equivalent scheme. “We provide security of supply, total cost of ownership and differentiated, quality brands, products and services,” says Bartlett. “We customise solutions to help each other do business in a smarter, more efficient way.”

GE For the past four years, BP and GE have developed a strong relationship to help deliver commercial growth and operational efficiency, access and commercialise new technologies and advance environmentally-sensitive, commercially-robust products and services. “As well as us selling products to each other, we develop solutions that enhance the experience and cost efficiencies of our mutual customers,” says Marcell Ulrichs, BP strategic account manager, GE. The co-operation spans the breadth of BP’s businesses across a variety of industry sectors and includes preferential wind turbine procurement agreements and an upstream joint technology programme to identify mutually beneficial opportunities – for example, in electric subsea processing, water treatment or inspection technologies. “The BP/GE relationship has been transformed from non-strategic to very productive, delivering significant benefits to the two companies and our joint customers. This step change in quality and materiality is recognised at both corporations,” says Ulrichs.

BP MAGAZINE Issue 2 2009 67 Viewpoint> Azerbaijan then and now

The reawakening giant Azerbaijan’s oil connections are long and illustrious, with written references stretching back as far as the 9th century. Almost 11 centuries later, the Swedish Nobel brothers kick-started the commercialisation of Azerbaijan’s black gold, drilling their first well in Balakhani, an oil-rich suburb of the capital city of Baku (see below). By the beginning of the 20th century, Azerbaijan was producing more than half the world’s supply of oil. During the Soviet era, Baku became the centre of platform construction for Russia. But independence in the mid-1990s brought a new lease of life to the country’s oil and gas industry, as its government signed the ‘contract of the century’ with a consortium of international energy companies, headed up by BP. The contract called for the development of the offshore Azeri-Chirag-Gunashli oil and Shah Deniz gas (main image) fields, located in the Caspian Sea, along with the construction of two major pipelines – the Baku-Tbilisi-Ceyhan oil pipeline and South Caucasus gas pipeline – to transport its hydrocarbons to international markets. With all elements now up and running, Azerbaijan’s status as an energy giant has been truly reaffirmed. ■

REPORT: LISA DAVISON / PHOTOGRAPHY: BP AZERBAIJAN ARCHIVE / SHAHIN ABASALIYEV

68 Issue 2 2009 BP MAGAZINE BP MAGAZINE Issue 2 2009 69 ➔ environment Historic focus> Responsible operations Report> Lisa Davison Photography> BP Imageshop DEDICATION TO THE CAUSE In 1997, BP took a stand on climate change with huge impact. But as the people who have dedicated their BP careers to managing environmental impact explain, it was just the tip of a long-standing iceberg.

“If we are all to take actively joining an oil company decades techniques to manage effluent water earlier, with the belief that they could treatment. “In the mid-70s, teams didn’t responsibility for the future make a difference, and who chose BP have the word environment in them – that of the planet, then it falls on because it already had the reputation for crept in later – but it was environmental being the ‘greenest’ of the oil companies. management in its own way.” us to take precautionary People like Philip Chown, Refining & BP’s interest in environmental impact action now.” Marketing health, safety, security, can be traced back to the early 1960s, when environment compliance director. His it formed an anti-pollution advisory group, passion for environmental issues looking at the causes and effects of That was the message delivered by former developed after a holiday as a teenager in pollution in cities. In 1966, it began BP group chief executive Lord Browne in Germany’s Black Forest. A walk on a cloudy studying air pollution, which led to the 1997 during a speech at Stanford day left him with stinging eyes (caused by development of cleaner chimneys, University. It was a pinnacle moment acid rain) and a desire to do something including on large refineries. regarded by many as the first time an oil about it. A doctorate in chemistry was In 1970, it founded the Environmental company had accepted the link between swiftly followed by a job offer from BP to Control Centre to explore the policy and human activity and climate change and become part of a research team looking at science of environmental issues and made a pledge to play its part in dealing the impact of oil in water. “BP was one of commissioned The Shadow of Progress, a with the situation. Such was its the few with a reputation for trying to do documentary exploring the way in which, significance, it caused one industry veteran something about its impact on the in meeting the demands for a richer, fuller to declare that BP had ‘left the church’. “It environment while still being considered life, technology has polluted much of was a bold, significant move,” remembers ‘dirty’,” he remembers. “I saw it as an man’s environment, with a discussion of Mike McMahon senior advisor, climate opportunity to make a difference.” possible solutions. change, “people sat up and took notice.” He was not alone. Around the same It was also during the 1970s that it began But behind this is another quieter, but time, Graham Bunch advisor, water a process of environmental documentation equally important, story. A story of people management, joined BP working on better – the precursor to today’s formal environmental impact assessments – to

Pure shores: pollution better mitigate its ‘footprint’. “They were control exercise taking place pretty rigorous for their time,” says Chown. in Beaulieu River at Wytch During the 1970s and early 80s, much of Farm, UK, in June 1991. that focus was on water – either through spills or a plant’s waste water management. “BP was doing some cutting-edge work to protect the water resources around its facilities,” says Chown. “It was exciting to be part of that.” Part of that work found he and Bunch working on the development of waste water treatment at Grangemouth refinery in Scotland, a period of time that both men look back on with a sense of pride. “We built a state-of-the-art plant – one of the best in Europe – using pure oxygen and several new innovations,” says Chown. “Grangemouth used to have one of the highest refinery discharge levels in »

70 Issue 2 2009 BP MAGAZINE Aerial view: Furzey Island is part of BP’s Wytch Farm project and famous for its population of red squirrels that BP actively monitors.

“BP was one of the few with a reputation for trying to do something about its impact on the environment. I saw it as an opportunity to make a difference.” Philip Chown

BP MAGAZINE Issue 2 2009 71 Historic focus> Responsible operations

Europe,” adds Bunch. “The new plant Minimal impact: an operator removes helped us put that right.” floating sludge at Grangemouth’s effluent treatment plant (top left). Above, Wytch Thirty years later, BP handles more Farm pioneered certain technologies, such water than oil and its management as extended reach wells. remains a challenge. “Since the 1990s, there has been an additional emphasis on fresh oil terminal,” says Mike Mason advisor, debate began over whether that policy water use,” says Bunch. “If you think about environment. Having joined BP in 1985 as a should move to one of precautionary it, water and energy are inextricably linked. specialist in oil pollution response, Mason action. Two years later, the switch was You need water to produce energy and was posted to Wytch Farm, UK – an made and the Stanford speech was born. water companies need energy to treat and environmentally sensitive area and the During the speech, Browne made a move their product. Climate change is location of the largest onshore oilfield in series of pledges: to control BP’s own often about altering water patterns and western Europe – essentially to hide the emissions; to fund continuing scientific new businesses, such as biofuels and heavy operation of the oilfield from public view. research; to work with others to limit and oil rely on sustainable water supplies.” At Mason spent 17 years overseeing an reduce net emissions of greenhouse gases; Bulwer and Kwinana refineries in Australia, environmental and planning team to to develop alternative energies for the long teams have become more creative, using develop detailed design, gain planning term; and to contribute to the public policy recycled municipal waste water for permission, construct and operate the oil debate. Through its work with associations industrial processes. field, including a host of drilling and such as the Carbon Mitigation Initiative at Over on Alaska’s North Slope, the production techniques designed to Princeton University, US, and the Chinese upstream business has had to be conscious of minimise BP’s impact on the area. “Wytch Academy of Sciences, along with a its impact from day one and it is now one of Farm is a special place. It’s reputation grew reduction in its emissions and the creation the most intensely surveyed regions in North because it was designed to show BP could of Alternative Energy (AE) in 2005, all America. Onshore drilling sites and roads be a responsible operator. We used to host these pledges have been realised. were elevated above the tundra on thick around 10 visits a month to show what we BP continues to improve its gravel pads, while ice road technology has were doing and how.” environmental management practices reduced the number of gravel roads. Special In many ways, it was a model and and publishes information on its burial of the Northstar field’s pipeline deep test bed, developing principles of environmental performance externally. beneath the seafloor and a sophisticated leak environmental management now common Meanwhile, AE is developing key areas, detection system were both firsts in Arctic today, along with pioneering technologies such as wind in North America and a new oil field technology. Large sections of the such as extended reach drilling, which biofuels business in Brazil. Trans-Alaska Pipeline were raised from the avoided construction of an offshore island Since Stanford, media coverage on ground to prevent warm oil melting the and brought the field onstream a year ahead climate change has gone through the roof permafrost and elevated over caribou of schedule. That experience and approach and public knowledge is at an all-time crossings to avoid impact on migration. has held BP in good stead as it develops high. But while that speech may have Indeed, the number of Central Arctic caribou other projects in equally sensitive areas, caused a sea change in the industry, it’s fair moving through the Prudhoe Bay, Kuparuk such as the Tangguh gas field in Indonesia. to say that for the scores of BP people who and Alpine fields has increased from around While all of this was being developed by were environmentalists even before the 3,000 in 1972 to 32,000 today. people with a passion for their phrase was coined it was simply a matter of “We learnt a lot from the experiences on environment, officially it was still under doing the right thing all along. the North Slope and Shetland’s Sullom Voe BP’s policy of ‘no regrets’. In 1994, internal “Stanford was rightly a distinctive moment for BP,” says Bunch, “but in truth, “There are many people across the company who there are many people right across the company who have spent the past decades have dedicated their careers to ensuring BP delivers creating a bedrock of responsibility – on its environmental commitments.” people who have dedicated their careers to ensuring BP delivers on its environmental Graham Bunch commitments.” ■

72 Issue 2 2009 BP MAGAZINE BP Faces Illustration> James Carey Highlights from history Interview: Nick Reed

LORD SIMON OF HIGHBURY Chief executive 1992-1995 Chairman 1995-1997

“When I took over as chief executive at short notice in 1992, I found myself sitting down on a sunny Sunday morning at my Norfolk cottage, wondering what I would say to the company and the investment community in the coming days; how I would articulate my mission and my management approach. The shares were wobbling, and I had the likes of Lord Hanson [one of the most influential British businessmen of the 20th century] and Larry Fuller at Amoco, calling to discuss giving BP ‘a helping hand’! So I knew I needed something motivating and memorable that would give people confidence going forward. I quickly settled on three simple words ‘peformance, reputation, teamwork’. I knew the acronym PRT would resonate with people, because it is the same as petroleum revenue tax! The idea was that we would focus on the efficiency of the company, rebuild its reputation and make every individual feel responsible for our success. We lived by these principles for three years, first through organic rehabilitation, then on towards strategic growth. John Ashburton, the chairman during this crucial period, and the entire executive team gave full support to the approach. I am convinced that PRT turned BP around at an extremely sensitive time. Without it, I believe the company could have found itself on the wrong end of a merger. After the recovery of 1992 to 1997, John Browne took the company forward with a professional growth strategy that had a strong foundation.” ■

BP MAGAZINE Issue 2 2009 73 ➔ transportation Product delivery> Modes of distribution ON THE MOVE A CENTURY OF ENERGY TRANSPORTATION When it comes to moving oil and gas around the globe, modes of transport have changed immeasurably – mules are a pretty rare sight these days – but there’s no doubt that each form has done its bit to ensure BP delivers heat, light and mobility to its customers.

Top: branded horse-drawn tank wagons replaced barrel-laden carts in the 1880s. Above: motorised tankers became a much more common sight in the early 20th century, and came in all shapes and sizes. Right: BP had to construct a pipeline to transport oil from its first field – Masjid-i-Suleiman – to Abadan refinery on the coast of Iran. It was 220 kilometres (130 miles) long and required 1,000 people to construct it. By comparison, the Baku-Tbilisi-Ceyhan pipeline is 1,768 kilometres (1,098 miles) and, at its height, employed 21,000 people. Below: mule was the most common way to transport Anglo- Persian’s burning oil in Iran and Iraq. Left: rail transportation was common in Britain in the mid-20th century.

74 Issue 2 2009 BP MAGAZINE Report> Lisa Davison Photography> BP Archive

BP MAGAZINE Issue 2 2009 75 Product delivery> Modes of distribution

Above: gas has been transported as a liquid since the 1950s, with the Methane Pioneer carrying out the first transatlantic voyage in 1959. Right: the 1,300 kilometre (800 mile) Trans-Alaska Pipeline received its first oil in 1977. The pipeline zig-zags across Alaska’s North Slope so that movements caused by temperature changes and seismic activity can be absorbed. Below: road trains are a common sight in Australia, where long distances require large amounts of fuel to be transported at one time. The average length of a road train is around 54 metres (180 feet) and can transport up to 100,000 litres (22,000 gallons) in one go.

76 Issue 2 2009 BP MAGAZINE BP Faces Photography> David Gold

A LIFE OFFSHORE Jim Barr / Offshore installation manager When Jim Barr’s (left) school geography teacher told the class around 1966 that North Sea oil was going to transform the northeast of Scotland, they all thought she was dreaming. Jim joined BP 10 years later, and has since spent 32 years in the industry, primarily offshore. He recalls an early high level of responsibility in a fast-developing sector. “I was initially a trainee production engineer and worked on the Forties Pipeline System. For a pretty raw graduate, to be cutting into a major national asset like the Forties line was quite something.” Offshore, life was characterised by good food and good company, even if the entertainment options were limited. “Offshore is one of the worst places to be when you have nothing to do, but in operations that isn’t often the case. We had a ‘Super-8’ projector for watching films and got the reels sent out. Tired after our shifts, quite often we’d watch for half an hour and most of the room would be asleep. It wasn’t unusual to wake up and find the first reel flicking around and the screen empty, so the second reel was pretty much an optional extra!” ■

BP MAGAZINE Issue 2 2009 77 Proud history: during the late 1990s and early 21st century, BP’s mergers and acquisitions team was kept busy and distinguished brands, such as Amoco and ARCO in the US and Aral in Germany, joined BP, creating a super major with global scope and scale.

78 Issue 2 2009 BP MAGAZINE Company evolution> Heritage businesses ➔ mergers + acquisitions

Report> Lisa Davison Photography> BP Archive EXPANDING HORIZONS environment. But it is only an edge…[the] It took a mere 100 working days to complete and was competition is and will remain intensive.” kept a secret by conducting meetings in the British That difficult environment was largely a consequence of oil prices plummeting Airways Concorde lounge at John F Kennedy airport in below $10 a barrel. Suddenly, size mattered. New York. But the merger between BP and Amoco is just Speaking to the press at the time, Browne declared that “in such a climate, the best one chapter in a long story of acquisitions and mergers. investment opportunities will go increasingly to companies that have the t was, at the time, the largest-ever size and financial strength to take on those industrial merger, catapulting BP into large-scale projects that offer a truly the top three global oil and gas distinctive return.” players. “It was a tremendous surprise Speaking to BP’s in-house magazine, to everyone,” says Lord Browne, Horizon, former Amoco chief executive Iformer BP chief executive and architect of Larry Fuller added his thoughts: “[It] gives us the BP Amoco merger in 1998. The numbers the upper hand in withstanding the current tell the story – it added 63% to BP’s existing industry downturn and becoming one of oil and gas reserves, with another 63% on the leaders in the industry. BP Amoco is the production. It became the largest gas great competitor of the future.” producer in the US overnight and the top Inside BP, there is still something quite retail marketer east of the Rocky Mountains. special about the deal. “It changed the It also transformed the industry landscape for us and the industry,” says landscape. Within months, Exxon and Skinner. Despite the record-breaking Mobil had joined forces, Total took on Fina completion time, it was far from a whim. and Elf – although not before Elf BP was the first oil company to set up its attempted a reverse takeover of Total – own dedicated M&A team in 1986, with while Chevron and Texaco realised they the purpose of bringing more were a match made in heaven. professionalism into acquisitions and Consolidation was all the rage. divestments of non-core activities. In 1987, Global reach: Founded in 1899, For BP, Amoco was just the start. From BP bought out the minority shareholding Castrol, formerly CC Wakefield and 1999 to 2003, the company’s mergers and in Standard Oil of Ohio – Sohio – and in Co, was to become a global giant in acquisitions (M&A) team, headed up by 1988, acquired Britoil, reinforcing its the lubricants business. Its now retired Roger Skinner, oversaw a series presence in both the US and the North Sea. acquisition in 2000 gave BP a leading position in 50 countries. of acquisitions, including ARCO, Castrol, By 1990, the team was reviewing new Veba Oel, and the Russian joint venture – targets, and two names were in the frame – TNK-BP. In total, this activity added a Mobil and Amoco. “Both were a good fit staggering 157% to BP’s proven oil and gas and gave us the potential to create scale reserves, 193% to its production and 111% and reach,” says Skinner. to its refining capacity. Five years later, BP and Mobil agreed a The late 1990s was a tough period for joint venture. “We were pushing the the industry. Speaking at the time of the frontier,” says Skinner. “We had a meeting Amoco deal, Lord Browne said: “The and said ‘look, we fit, we’re both too small merger gives us an edge in the very difficult in the current climate, how about it?’” »

BP MAGAZINE Issue 2 2009 79 Company evolution> Heritage businesses

It marked the first time any major oil Diversification came in rather unusual company had publicly admitted it could forms and, as a consequence, BP became the not stand on its own. “It showed that two owner of forests in New Zealand, prawn major companies could swallow their pride farms in Thailand and the world’s leader in and share branded space,” says Skinner. It silk screen printing inks. It was not alone. also demonstrated the benefits of regional One oil company bought a department scale in the European downstream business. store chain, while another bid for a circus. But BP wanted global scale. And for that, By 1986, it was becoming clear that a lot it turned to Amoco. “I rang Larry Fuller one of these deals were not turning out quite as day and said, ‘I think I’d like to come and the company had envisaged. The new talk to you about the future,’” remembers M&A department was created and an Browne. “So, we agreed to meet in the intense phase of consolidation began, Concorde lounge in JFK and we had our first including, 12 months later, the decision to discussion. The rest, as they say, is history.” buy out the final 46% share in Sohio. It was a bold, opportunistic move, It was the start of something big. something Skinner believes is Between 1997 and the end of 2004, BP characteristic of BP as a company. “BP has engaged in M&A to the total value of been doing deals for a long time,” he says. $101 billion. Its merger with ARCO made it “In the 1920s and 30s, we had a lot of crude Following the discovery of the Prudhoe the leading US west coast retail marketer, oil in the Middle East, but no channels of Bay field in Alaska, BP realised it needed a gave the company coast-to-coast reach and our own through which to market that presence in the US. One company stood out a major gas position in Asia. Through the crude.” The quickest solution was to – Sohio, one of Rockefeller’s old guard. “It acquisition of Castrol in 2000, it inherited a acquire distribution businesses, mainly had very little debt and not much crude oil leading lubricants position in 50 countries, in Europe. in relation to its marketing power,” says while in 2002, Veba Oel made it the leading While not all deals lived up to their Skinner. “It was the ideal partner.” German oil marketer. And in 2003, the potential, some were transformational. The deal was done in 1969, allowing BP creation of TNK-BP turned BP into Russia’s Precisely 30 years before the Amoco deal, to take an initial 25% of the company. largest foreign investor. BP was busy creating another phoenix-like Once so reliant on Middle Eastern oil, BP BP as a company has transformed itself, moment. In the late 1960s, BP produced was now a big hitter in the US. “Developing and is not the same organisation that it was around 4 million barrels of oil per day and bringing Prudhoe Bay to market was a even 15 years ago. However, that and, yet, refined and marketed barely half large commercial undertaking and transformation has only been possible this amount. provided us a lifeline. In the history of the thanks to an unswerving desire to stay company, it stands alongside Amoco in ahead of the competition through what it did for our future,” says Skinner. innovation. “Through its mergers and “Through its mergers and While that US future looked strong, the acquisitions, BP has combined the mid-1970s proved tough, with many strengths of its heritage parts,” says acquisitions, BP has Middle East and African concessions Skinner. “BP became one global group combined the strengths nationalised. “In response, BP, like the rest of with the capabilities and resources to its peers, looked for renewal opportunities meet the challenges and opportunities of its heritage parts. BP through diversification,” says Skinner. of the future.” ■ became one global group Marketing giant: the with the capabilities to merger with ARCO turned BP into the meet the challenges and leading retail marketer opportunities of the on the US west coast. future.” Roger Skinner

80 Issue 2 2009 BP MAGAZINE BP Faces Illustration> James Carey Highlights from history Interview: Nick Reed

LORD BROWNE OF MADINGLEY Chief executive 1995-2007

“There are two highlights from my time leading BP – the merger with Amoco in 1998, and the Stanford speech on climate change in1997. The Amoco deal came about after attempts to merge with Mobil. I called Larry Fuller, the chief executive at Amoco. He said a merger wasn’t on his agenda, but could we get together the next day. I caught a Concorde flight to New York, and set in train the events that led to what was, at the time, the world’s largest industrial merger. It was a hot August day, when the whole of the BP executive team, and a host of other colleagues, were waiting in the study at my house in Belgravia, waiting for Amoco’s decision. At least 250 BP people knew about the discussions, but not a word leaked out. That’s a real demonstration of a great team. The merger made BP more competitive, and allowed us to do things we had always dreamed of. It improved our technological capability: today’s seismic innovations are founded on Amoco research, for example. The Stanford speech was another industry- changing moment. We knew it would have a major impact. Some in the industry thought we were ludicrous, and there were many within BP who were extremely vocal in their opposition. But we knew this was a growing issue. We wanted a seat at the table when people were discussing our future. It has changed the way the industry does things today. There is more responsibility now. It showed we are prepared to do something about a situation with which we are inextricably linked.” ■

BP MAGAZINE Issue 2 2009 81 ➔ history on film Documentary> Centenary: The BP Story

Report> Nev Pierce Photography> Steven Croston

ummer, 2006. Last orders have been and gone. Two men stumble from a bar, into the balmy west London night. Nigel Williams – writer,S director, novelist and documentarian – has had a couple of drinks. And he’s having a couple of second thoughts, too, about his decision to make SLICK BP’s centenary film. “I’ve never made a corporate film!” he says, turning to Steven Croston, commissioning editor of BP TV. “I don’t think I should do this.” He takes a few steps into the street. Stops, thinks, says to himself: “If you get to the point you think it’s not right, you can always walk away…” FLICKAdventure, daring and surprise… Centenary: The BP Three years later, Williams has finally reached the point of walking away, but only Story showcases a vivid, rich history that spans the because the film – Centenary: The BP Story – is finished. “I feel rather sad it’s all over,” he 20th century and beyond. Writer/director Nigel says. “Initially, I was worried I might be Williams talks censorship fears and recreating a censored in some way. That proved absolutely not the case. In fact, I got less world-changing discovery. interference than I did from a lot of people at the BBC, where I worked for 30 years!” Williams, who used to run the BBC’s acclaimed arts documentary series Omnibus, is an industry veteran, whose Veteran storyteller: writer/director Nigel Williams (below) on set of screenwriting work includes the BAFTA the reconstruction of first oil at and Golden Globe-winning Elizabeth I, Masjid-i-Suleiman. starring Helen Mirren. By his own admission, he knew little about the oil industry when he fell in with independent production company Lone Star and pitched to write and direct the corporation’s centenary film. “My take on it was we should talk to everybody in the company, not just the bosses,” he says. “We had to talk to drillers and chemists and just ordinary guys, in so far as you can fit them into the story. BP seemed to like that approach.” “To begin with, Nigel wasn’t sure about it at all,” laughs Croston, who took quite a career-swerve when he joined BP in 1992, given he used to be a professional percussionist. “But he very quickly consumed a three-volume history of BP and said, ‘This is fascinating. I want to make this film.’” Croston’s enthusiasm for the company’s heritage is infectious – particularly its filmmaking. Since the 1920s, the company has recorded footage of key events – and made documentaries to speak to its staff »

82 Issue 2 2009 BP MAGAZINE Historic reconstruction: the moment that George Reynolds struck first oil was created by Williams and his team, with the Californian desert standing in for 1908 Persia.

BP MAGAZINE Issue 2 2009 83 Cinematic history> Centenary: The BP Story and the world at large. Croston has made it “We tried to find people whose memories went back as his mission to recapture what he considers the finest period of BP’s in-house screen early as possible. Their testimony is fantastic. The real work, ‘the halcyon days of the 60s and 70s’. tragedy is so much of it we haven’t been able to use, When considering how to mark the 100- year anniversary of BP’s inception, he went because we had hours and hours of material.” to the company’s board with a proposal. “I Nigel Williams said, ‘I’d like to make a film, not a video. And this is not going to be a corporate film: it’s going to be a film about a corporation.’” A proper film required a proper filmmaker, as possible. We interviewed one guy, Peter desert, funded by William Knox D’Arcy. so Williams was in. Armed with Croston’s Jones, who was a driller in Iran in the 30s – They had a notion there was a bit of oil out brief and the invaluable help of producer he’s died, sadly, since the interview. And in southwest Persia… But they were Elena Adams, who undertook extensive another man, a wonderful old boy called burning cash. Finally, Reynolds was told research, he viewed hours of BP’s own Monty Sawyer, who was a chemist at ‘this is the last bite of the cherry: if you’ve company films to discover its history. “It’s a Abadan refinery in the 40s and was there drilled to 1,100 feet and haven’t found oil, riveting story,” says Williams, who also when Iran nationalised its oil industry in abandon operations and come back!’ He read voraciously about the subject. the 50s. Their testimony is fantastic. The struck oil. That was the birth of oil in the But Williams didn’t find his facts solely real tragedy is so much of it we haven’t Middle East, and the spiritual birth of BP.” on paper. Instead, he sought out first-hand been able to use, because we had hours and “It’s a very exciting thing,” says accounts from company employees, hours of material!” Williams. “As one of the geologists told me stretching back as far as possible. “We The toughest challenge for Williams was, – this remark didn’t actually make it into spoke to at least 40 people,” he says. “One indeed, one of compression: taking 100 years the film – ‘outguessing the sub-surveys is a person led to another… We tried to find of history and putting it into a manageable fascinating detective story.’ Because it’s people whose memories went back as early format. “That was the real struggle. I had to very easy to miss even a big field. There are cut my way through the jungle, wade plenty of people in the business who never through the avalanche of facts.” found any oil.” The Masjid-i-Suleiman find was a ith the final film clocking in at sequence reconstructed for the film, with 83 minutes, Williams has Williams and co recreating the incident on Wsucceeded in making the story location, with the Californian desert digestible, and just hopes he’s done the standing in for what is now Iran. “The subject justice. “It is a film of record,” he principle was to use reconstruction only says. “One of the guys on the centenary for sequences where we couldn’t find committee said, ‘I expected something people to describe it in other terms,” says flashy, but it’s very erudite!’ I said, ‘you Williams. “It’s not dramatised in an ‘Oh, I mean it’s boring!’ He said, ‘No no, dear boy, I say!’ way. As I work in drama, I’m very just mean it’s erudite.’ But it’s a very aware of those wooden, pseudo-historical complicated subject. You can’t do it in a representations. The production team did a simplistic way or talk down to people.” wonderful job. The rest of the challenge It is an immense subject to tackle. Oil, was finding people and talking to them and like cinema, straddles the 20th century. In compression, compression was the issue.” Well, well, well… many ways, it is the story of the 20th Boiling it down meant leaving out Nigel Williams on his century. There isn’t an area it doesn’t touch certain fascinating incidents and favourite oil movie. – from central heating to journeying to the achievements. “The history created its own moon. “It’s a story of politics, a story of war, logic: it’s really about the things that made “I love There Will Be Blood. I thought it a story of peace,” says Williams. “The or broke the company in the time it’s been was brilliant. I worked with Daniel Day- reason the British government became a developing over the past 100 years. Lewis once – he was in a play of mine, majority shareholder in BP was because Centenary: The BP Story still includes years ago. He’s probably forgotten. He’s a Churchill wanted a secure supply of fuel more than its fair share of astonishing brilliant actor and I thought this was a for the navy. accomplishments, which will be superb picture of a complete lunatic, “I don’t know if another oil company appreciated by audiences at special despotic tyrant. Of the kind I did not find would be as interesting. BP had this screenings at The British Museum and the in BP! One of the geologists – the guy fantastic, amazing, romantic origin of this HQ of the British Academy of Film and who found the Forties field – said ‘it’s all massive find: billions and billions of barrels Television Arts (BAFTA), in London, before teamwork’, which is a very British thing of oil at Masjid-i-Suleiman. It was still being more widely screened elsewhere. For to say. But that kind of figure Day-Lewis going in 1951, from being found in 1908! Williams, it’s been an immensely satisfying was portraying was, I think, very true It’s unbelievable!” journey. “It’s fascinating: the whole of the about the early days of American oil The discovery of the field that made BP oil business is just completely fascinating,” exploration…I loved the movie.” very nearly didn’t happen. As Croston he says, and smiles. “Whether the film is, I explains, “George Reynolds was out in the don’t know, we’ll have to see!” ■

84 Issue 2 2009 BP MAGAZINE < Oscar glory BP has a long history of using film to document its work, stretching back more than 80 years. In that time, it has won numerous prizes for its filmmaking, but the pinnacle moment came in 1961 when Giuseppina (left) won the Oscar for best documentary, short subjects. The film, directed by James Hill, follows a young Italian girl who spends the day with her father meeting customers at his BP garage.

BP MAGAZINE Issue 2 2009 85 ➔ BP in the press Media coverage> Through the ages

spent on construction, the huge challenges of building in a remote and difficult terrain, as well as the need to maintain good relations with local tribal chiefs and national government. READ ALL Four years later, APOC had plenty of oil but was almost bankrupt. With the country on the brink of war, Winston Churchill, First Lord of the Admiralty, came to the rescue. He believed the Royal Navy should ABOUT IT switch from coal to oil-fuelled ships. The government injected £2 million of From the very beginning, hat was to become a new capital into APOC in return for a very public story, majority shareholding. In addition, a BP and its forerunners began in private. It contract was agreed for 40 million barrels have been in the public came in a coded of fuel oil to be delivered to the Admiralty eye. The early decades telegram, announcing over 20 years. It was a great coup for both Wan oil find in Persia (now Iran) and arrived government and company. provided scant, though after an eight-year search, funded largely by The First World War provided APOC the English businessman William Knox with an unexpected opportunity. It tantalising details while D’Arcy. Both money and hope were almost acquired the name that would, in due the past 50 years have fully spent. course, become one of the most famous in witnessed an exponential That discovery led to the establishment global corporate history. The antecedents in 1909 of the Anglo-Persian Oil Company of the British Petroleum Company, growth in media coverage. (APOC). By 26th July 1910, London’s The however, were not British at all. For this BP Magazine journeys Times newspaper, reported the company’s was the subsidiary of a German company, first ordinary general meeting. The which, at the onset of war, had been placed through the archives and chairman, Lord Strathcona, recorded the in the hands of the Public Trustee for talks to Roland Gribben, a sum of $325,500 – vast in those days – Enemy Property. Now owning a valuable distribution veteran writer on the organisation, APOC made BP its brand energy industry. name. While the brand grew more familiar as petrol pumps were built to fuel the

86 Issue 2 2009 BP MAGAZINE Report> Hester Thomas Illustration> Jason Ford

increasing number of cars, media coverage the company to give everything it could. oil assets. By 1954, Anglo-Iranian had of APOC focussed principally on company Indeed, the refinery at Abadan in Iran become British Petroleum. It was no longer meetings and share price reports. This was played a major role in supplying Allied air the owner and sole operator of the oil a different age, when newspapers were forces, while Anglo-Iranian’s tanker fleet industry it had built in Iran, but a 40% slim, business pages few and public suffered heavy casualties carrying share owner of the Iranian Oil Participants interest limited. essential supplies. consortium. Needing to find new The style of reporting was very different, The untold story included one of the opportunities, by the late 1950s, BP had too. On 28th June 1935, The Times covered war’s best-kept secrets. Having recently developed further interests in Nigeria, APOC’s 26th general meeting, not so much found oil on mainland England, Anglo- Kuwait, Iraq, Qatar and Libya. with a headline but with summary bullet Iranian increased its crude oil production “Among journalists, BP was regarded as a points. These included notice that the four-fold to 2,000 barrels a day, providing company that could find oil but not sell it,” company name was changing to Anglo- much-needed support to the home market. says Gribben, “while Shell couldn’t find oil Iranian Oil Company Limited, reflecting Post-war, the world changed rapidly as but could sell it. This was the result of one Persia’s change of country name. nations became increasingly dependent on company having good geologists and the Curiously, the report also includes oil to drive growth. Roland Gribben, former other good marketers.” details of chairman Sir John Cadman’s tour business editor at The Daily Telegraph and That situation changed for both of the company’s operations. This involved now semi-retired, covered the energy companies as each improved its skills base. him travelling 65,000 kilometres (40,000 industry from 1967. He recalls this era as, However, BP’s geologists proved their miles) and being away for four months – a “the glory days when oil was fuelling the worth yet again when, in 1969, the prospect that any company chairman world economy, oil companies were literally company struck oil in Alaska. Despite The would now regard as corporate suicide. breaking new frontiers in discoveries and Times’ cautious reporting, this was thought Come the Second World War, technology, the petrochemical industry was to be a field containing up to 10,000 newspapers had bigger stories to tell than taking off and new products were being million barrels of oil – one of the largest shifts in corporate fortunes. Yet, Anglo- brought to market.” found in North America at that point. Iranian was among those that played a Fresh oil fields were sought, not only to This news was dwarfed, in UK media significant part in the war effort. Winston meet greater demand but also because terms at least, by BP’s next major find – the Churchill, now prime minister, called on countries, such as Iran, were nationalising first substantial discovery of oil in the »

BP MAGAZINE Issue 2 2009 87 Media coverage> Through the ages

British sector of the North Sea. The Times non-OPEC oil fields, it also saw its major acquisitions. ARCO, Castrol and Veba Oil splashed the story on its front page, while shareholder – the government – begin to all came into the fold, but the most the nation celebrated at the prospect of withdraw. The final share sell-off came in spectacular acquisition was that of Amoco. owning liquid gold. “The Alaskan and 1987 and, as Gribben states tersely, “The This was the largest-ever industrial merger, North Sea finds propelled BP into the oil British government got the sale creating Britain’s leading company and the super-league,” notes Gribben. “They disastrously wrong.” world’s third largest oil company. transformed its fortunes and, importantly, It was hailed as the biggest private share “This major expansion in North reduced its reliance on the Middle East.” sale the Stock Exchange had ever seen, America was the greatest achievement By 1975, oil was flowing into the British with the government selling its remaining made by John Browne when he was chief economy at what The Times reported as a 32% stake in BP. The offer price of 330p a executive,” says Gribben. “It also “rate of £28 a second.” Whatever the share was set below the trading price to demonstrated the complete change in hyperbole, the news was undoubtedly tempt investors with an instant profit. As management culture and confidence. In good. “Almost at a stroke, tax from oil the issue had been underwritten by a my early days of covering BP, the revenues ended Britain’s balance of consortium of institutions, the government management behaved as it if was an payments deficit,” states Gribben. “This already had the £6 billion guaranteed extension of the civil service.” was the UK’s first new industry for many proceeds from the sale. The new millennium has seen BP years and, for a short time, the nation was Three days later, share prices – including launch a new global brand identity, become among the world’s top five oil producing BP’s – collapsed. The underwriters, several a major player in the Russian oil industry, countries.” fearing bankruptcy, pressed the through the joint venture TNK-BP, However, there was no room for government to shelve the issue. It declined. establish a renewable energy business, BP complacency. By the 1970s, the Spotting a bargain, the Kuwait Alternative Energy, and complete the Baku- Organisation of the Petroleum Exporting Investment Office, acting on behalf of the Tbilisi-Ceyhan pipeline carrying oil from Countries (OPEC) had stolen the lead from Kuwait government, purchased 22% of BP. the Caspian to the Mediterranean – of oil companies, by regulating both “Within days, BP found the Kuwait which the company is a major stakeholder. production and price. government rather than the British Oil price shocks have continued. The The first price shock came in 1973, government as its biggest shareholder,” last in 2008 – when oil hit $147 a barrel, when oil rose from $2.90 a barrel at mid- summarises Gribben. “It left the company before tumbling back to around $50 – year to $11.65 by year-end. As a result, oil in an extremely difficult political and made all previous ones look trivial in exporters saw their wealth increase rapidly commercial situation.” comparison. Gribben shakes his head with while the economies of oil-consuming A resolution was found 18 months later, a mixture of admiration and pity for oil nations were hit badly. when BP bought back half the Kuwaiti-held industry managers who must plan in the “I was in Kuwait at the time,” recalls shares and cancelled them, costing the face of such volatility. “To run an oil Gribben. “The Shah of Iran said, ‘the company a cool £2.4 billion. company today,” he notes, “senior honeymoon is over.’ The stable price of oil The late 1990s saw BP involved in a managers need to know how to drive – trading between $1 to $2 a barrel – had remarkable period of takeovers and performance and gain efficiencies, while suddenly evaporated.” also being skilled politically and The 1970s and 1980s were a period of diplomatically. It’s hard work.” great change for BP. As well as developing Lord Strathcona, were he to time-travel from 1909, might be inclined to agree. ■

88 Issue 2 2009 BP MAGAZINE BP Faces Photography> Shahin Abasaliyev

MAJOR SCOOP Tamam Bayatly / Communications manager “I have seen history in the making” says Tamam Bayatly of her 14 years as BP’s spokesperson in Azerbaijan. Sitting in on high-level negotiations for the huge Azeri-Chirag-Gunashli (ACG) offshore oil development, and subsequent Baku- Tbilisi-Ceyhan (BTC) pipeline, she has witnessed decisions that have shaped her country’s destiny. Back in September 1994, speeches in English at the signing ceremonies for the ‘contract of the century’ were the first indicator that change was afoot. But the Azerbaijani people were unsure what to expect of the country’s first deal with a foreign investor. “Only a few believed it would be a decisive step to turn us “ACG has given the Azerbaijani towards an independent future,” says Tamam, a former nation power and confidence, while television news anchor, who joined BP in early 1995. “Luckily, the contract put the past behind us forever. ACG BTC has allowed the country to has given the Azerbaijani nation power and confidence, step onto the international stage. while BTC has allowed the country to step onto the international stage. I’m really proud to be part of both I’m really proud to be part of both projects through BP.” ■ projects through BP.”

BP MAGAZINE Issue 2 2009 89 ➔ profile Interview> Martin Vander Weyer Photography> Graham Trott

AN INTERVIEW WITH BP’S CHAIRMAN PETER SUTHERLAND With the hunt under way for his successor as chairman of BP, Peter Sutherland talks about his extraordinary career in business and public service – and what he’d like to do next.

90 Issue 2 2009 BP MAGAZINE BP MAGAZINE Issue 2 2009 91 Profile> Peter Sutherland

or the record, Peter Sutherland is not only the longest-serving chairman in the history of BP, but has also chaired the Finvestment bank Goldman Sachs International in London since 1995. Yet perhaps the most remarkable thing about this formidable boardroom operator is that he never had any ambition to build a business career. He started out as a barrister in Dublin – when he wasn’t turning out as prop- forward for the Lansdowne club – and he might have stayed there, if other doors had not opened: “I would have been happy as a Rumpole figure. I loved impressing a jury. I often have to remind myself that had I come up through the corporate route, I would never have aspired to where I ended up. I was fortunate to be parachuted in. I could never have been a chief executive.” someone stupidly asked me to become for. But throughout our conversation, it is It certainly wasn’t business that drew chairman of Allied Irish [Banks]. I’d never also obvious that what matters most to him, Sutherland away from the bar: it was his even been to a board meeting.” He also both in his past and in future possibilities, is appointment in 1981, at 35, as Ireland’s became a director of GPA – the aviation public service. I ask him, for example, what attorney-general, a role in which he served business – and in 1990, he was invited to he’s most proud of in his working life so far. two short stints, before becoming a join the board of BP – where he had made a The answer is, first, the creation of the European Commissioner in 1985 and powerful impression a few years earlier, WTO, and second, being part of the first discovering what might have been his true when he slapped a fine on the company as Delors commission. Here, as commissioner mission. He has called the European Union EU competition commissioner. for education, he proposed the Erasmus (EU) “the most noble political ideal in programme – as a result of which, 2 million European history” and he almost became hus, Peter Sutherland the business students have to date, spent a year in a part of its destiny when he was lined up to titan we know today was launched. university outside their own home country. succeed Jacques Delors as president of the TBut there was still another direction Third, “I did my best when I was attorney- Commission, in 1995. to be followed: in 1993, he was asked to general of my own country.” This is the An untimely change of Irish take over as director-general of the General wider Sutherland landscape, in which he government put the mockers on that – but Agreement on Tariffs and Trade (GATT), a places his tenure at BP as one important by then, the Sutherland career path had seemingly interminable, Geneva-based peak among many. already found other directions. Back in global talking-shop, which everyone he “The company has been through a Dublin, at the end of his Commission term consulted told him he’d be mad to take on. period of enormous change,” he says. “But in 1989, he returned to the bar – but only By sheer force of personality, he turned the I’ve always had the view that the role of the for one case. “No sooner had I done it, than job into a personal triumph – with the chairman is to run the board, and not to creation on 1st January 1995 of the World manage the company, so although I “The company has been Trade Organisation (WTO) as GATT’s participated in these achievements, I don’t successor. claim credit for them. I’ve worked with two through a period of Five months later, he returned to the chief executives, John Browne and Tony enormous change. But I’ve business scene, rejoining BP as non- Hayward, who have been very effective in executive deputy chairman. Two years after their different ways in transforming the always had the view that that, when then chairman David Simon was company, and that transformation has been the role of the chairman is recruited into Tony Blair’s government, radical. It has been important not merely Sutherland took over the chair. for BP, but for UK and European industry.” to run the board and not to There’s no doubt he is immensely proud “When I came back in 1995, having manage the company.” of BP and everything the company stands participated in the GATT Uruguay round,

92 Issue 2 2009 BP MAGAZINE “We’ve also developed a robust committee structure for remuneration, audit, safety, ethics and the environment. I believe the whole area of corporate governance has been significantly advanced by BP.” which provided some of the building blocks executives and to structure the board with a become too high for the company’s good? of globalisation, it was particularly degree of knowledge and experience, which “For a very long period of time, John’s interesting to become involved in the can augment the capacities of the executive profile was extremely good. He was practical implementation of that process – in the analysis of difficult situations.” He consistently voted the best businessman in which required BP to develop a strategic thinks BP has created a good model – with a Britain. From BP’s point of view, that profile vision of its place in an interdependent group secretariat, separate from the brought many positive effects, and pride world. In response, we opened significant executive structure, which provides within the company itself. It personalised activities, both in China and Russia, the latter independent support to the chairman and leadership – and even if that gave through TNK-BP. We’ve created a portfolio of other board members. something less than a full presentation of exploration and production opportunities the way the company functioned, I’m not that spans the continents; and with the e’ve also developed a robust complaining about it. additions of ARCO and Amoco to our committee structure for “I had some differences of view on existing activities in Alaska and elsewhere, “Wremuneration, audit, safety, strategic issues (but only very occasionally) we have become the largest domestic US oil ethics and the environment. I believe the with John, just as I might have from time to company. We’ve transformed BP from a whole area of corporate governance has time with Tony,” Sutherland admits, “but medium-sized European company to a been significantly advanced by BP. But I that’s the way a balanced relationship global company of major proportions.” never saw the chairmanship as a very should work. If the chairman BP has also transformed internally and in public role. I can’t recall giving one automatically agrees with the chief that respect, much credit does go to interview in my first eight years as executive, it wouldn’t do much for the Sutherland. He is very clear about divisions chairman; I only became a public face checks and balances. There were moments of responsibility in a 21st-century public of BP when it became inevitable.” of disagreement with John that became company: “The role of the chairman and the The inevitable happened when internal public, but both of us were big enough to board is to develop the strategic issues, tensions over the end-date of Lord Browne’s continue working effectively together and including merger activity, and to act as a tenure as chief executive became very to remain socially compatible. It never check and balance to executive public indeed. With hindsight, does became a matter of such aggravation that performance; to hire and fire chief Sutherland think Browne’s profile had we couldn’t communicate. And it was very »

BP MAGAZINE Issue 2 2009 93 Profile> Peter Sutherland

“I plan to continue to be involved in international affairs: a great passion of my life is European integration, and I intend to pursue that vigorously.” temporary, given the long run of time that the like of which has not been seen in our development – I have a great interest in we worked together.” lifetime,” Sutherland says. “It would be that, too – and an honorary ambassador of The last year of Browne’s tenure was hazardous to speculate how deep or how the UN Industrial Development certainly Sutherland’s most public moment long it will be. I’m in the camp that sees Organisation, for which I’ve done very little at BP. Once that was over, and Hayward had this not as a short-term crisis, but one that over the past few years, but when I have settled in, another blew up with BP’s is going to take a significant time to more time, I’ll do more.” Russian partners in TNK-BP. Sutherland resolve, and that will bring serious At 63, he’ll clearly have plenty of again played a decisive role in resolving the economic damage. The implications for the choices. And some of his countrymen have situation, and Tony Hayward referred to oil industry are self-evident, because there wondered aloud whether he might not Sutherland as ‘the Irish tank at his back’. But is certain to be a period of weakness in oil choose to become a little less international it left open the big question of whether a prices – but I don’t believe that’s going to be – to return instead to national politics in combination of energy security issues and prolonged because even in a malign Dublin, where he remains an influential rising nationalism make it difficult to scenario, the demand for oil will remain at figure. Does he secretly aspire to be sustain the business model of an high levels relative to supply. In the Taoiseach or president, I wonder? Quite international oil company like BP. meantime, we’ll have to balance the supply firmly, he says not – but adds that, despite projects we go into – in BP’s plans, we living outside Ireland for the past 25 years utherland dismisses that suggestion maintain enough flexibility to allow us to or so, “most people still think I’m there,” with the cheerful – if slightly hold back when we need to.” and perhaps more significantly, “Ireland Sintimidating – brusqueness he What worries him about the current will always be big enough for me.” famously deploys from time to time. It is, crisis is a lack of access to capital for he says, “palpable nonsense… The reality is businesses in the wake of the credit crunch. nd whatever he does next, you can that we bring enormous benefits in terms At least the oil industry is relatively secure be sure it will be done with the of our flexibility and skill-set, which in this respect, he says: “You have assets in Amuscularity of grip and intolerance cannot be duplicated by national oil the ground that will be used in the future, of waffle that has carried him this far. Even companies. We bring global reach. I believe and which clearly have a significant value. so, it requires quite some technique to the model we have is extremely effective.” I can’t see that the raising of capital should manage such a diverse portfolio of As for specific tensions in Russia, he is in any way be impaired, even by the severe commitments: how does he actually do it? impeccably diplomatic: “We hope that’s lack of liquidity that prevails today.” “When it comes to technology, I’m now behind us. It was an unfortunate time, So what is Peter Sutherland going to do appalling. I don’t have a BlackBerry. I just but not unique in joint ventures of this after he steps down from the BP chair? “I carry an antique mobile. But one skill I kind. The interdependence of the market have a continuing connection with think I have is that I’m a good delegator. I economy means everybody has to play by a Goldman Sachs, which I enjoy, and other surround myself with good people, I’ve rule-based system, which provides avenues of activity that interest me: I’m done that all my life.” reasonable assurance with regard to chairman of the London School of It takes more than a good support investment. That rule-based system is in Economics, where there’s plenty to do. I system to be as effective as Peter everyone’s interest.” plan to continue to be involved in Sutherland, however. The real secret, he But if TNK-BP was the headline problem international affairs: a great passion of my finally reveals, lies in something his father for 2008, this year’s is something much life is European integration, and I intend to taught him: “If the ball is at your foot, he bigger and less susceptible to negotiation: pursue that vigorously. I’m the special told me, kick it. Most of my life has been an unprecedented global economic representative of the United Nations (UN) spent finding balls at my feet. And I’ve downturn. “We’re moving through a crisis secretary general on migration and never been reluctant to give them a kick.” ■

94 Issue 2 2009 BP MAGAZINE BP Faces Photography> Marc Morrison

ALL FIRED UP Greg Machado / Mechanical technician “I do feel responsible for the lives of my peers out in the deep waters of the Gulf of Mexico,” says Greg Machado, mechanical technician and member of the fire and rescue teams on BP’s Na Kika platform. At 97 kilometres (60 miles) offshore, in water depths of more than 1,770 metres (5,800 feet), the Na Kika platform is a floating town with a group of highly trained fire and rescue teams like any city. “Being part of the fire and rescue teams is voluntary, but I like the training and being prepared for anything out here.” Out at sea, with hydrocarbons all around, means that quick and effective action is needed should anything happen. “We train with different scenarios that simulate every possible event. This training is challenging and valuable, and it’s as useful at home as on the platform.” One never knows when Greg may come in handy. ■

BP MAGAZINE Issue 2 2009 95 Viewpoint> Evolution of a brand 1921-1922 BRAND 1922-1930 1930-47 AND DELIVER A company’s brand is its shop window and usually the thing people remember most about a business. Like other longstanding brands, BP has developed a distinctive look and feel over the past century. But a great brand evolves with time and in 2000, after 70 years, the famous shield was retired. In its place, a new ‘sunburst’ logo was launched to reflect all forms of energy. Its multiple petals showed that many companies had merged to work together as BP. BP Magazine 1921 1922 1930 US President Warren Harding reflects on the Mr AR Saunders from the The Mickey Mouse comic signs a joint Congressional seven eras of BP purchasing department strip makes its first resolution declaring an end to created the first BP mark, appearance; Clyde America’s state of war with branding, and after winning an employee Tombaugh discovers Germany, Austria and remembers some of competition in 1920; the Pluto; Elm Farm Ollie Hungary; Albert Einstein is the events taking British Broadcasting becomes the first cow to awarded the Nobel Prize in Corporation is launched; in fly in an airplane; the physics for his work with the place around the Egypt, British archaeologist Chittagong Rebellion photoelectric effect; the world as each Howard Carter finds the begins in India; Ellen Communist Party of China is change occurred. entrance to the pharaoh Church becomes the first officially founded; just 13 Tutankhamun’s tomb in the airline stewardess; spectators attend a football Valley of the Kings; the sponsored by Anglo- match between Leicester City Barbary lion, Amur tiger and Persian, Amy Johnson and Stockport County, the Californian grizzly bear all becomes the first woman lowest attendance in the become extinct. to fly solo from England Football League’s history. to Australia.

96 Issue 2 2009 BP MAGAZINE 1947-1958 1958-1989 1989-2000 2000-

1947 1958 1989 2000 Percival Prattis becomes Sputnik 1 falls to Earth from The Forties field enters the Y2K passes without serious the first African-American its orbit; the US Army inducts Guinness Book of World computer failures; the final news correspondent Elvis Presley, transforming the Records as the first oil field in original Peanuts comic strip is allowed in the US House ‘King’ into US private western Europe to produce published, following the of Representatives and #53310761; Nikita 2 billion barrels of oil; the death of its creator, Charles Senate press gallery; the Khrushchev becomes premier Berlin Wall comes down; the Schulz; Vladimir Putin is International Monetary of the Soviet Union; US first of 24 Global Positioning elected president of Russia; the Fund begins operating; Congress formally creates the System satellites is placed into billionth living person in Miracle on 34th Street is National Aeronautics and orbit; 12 European India is born; the first resident released in cinemas; Space Administration Community nations agree to crew enters the International Princess Elizabeth marries (NASA); for the first time, ban the production of all Space Station; Republican Philip Mountbatten, Duke total passengers carried by air chlorofluorocarbons (CFCs) by governor of Texas, George of Edinburgh; India gains exceeds total passengers the end of the century; the first Bush, defeats Democratic vice independence from the carried by sea in transatlantic full-length episode of The president Al Gore in the British Empire. service; instant noodles go Simpsons, premieres in the US. closest US election in history; on sale. BP launches a new brand.

BP MAGAZINE Issue 2 2009 97 Factfile Top 5producers The discovery of oil in Persia changed the Middle Eastern landscape, but in 1909 other – sometimes surprising – parts of the world were the key players in the industry.

Corbis 1 3 5 United States Imperial Dutch East Burma Romania Russia Indies

On 28th August 1859, At the beginning of the Aeilko Jans Zijklert, a The modern oil industry Like many parts of the George Bissell and Edwin 20th century, Baku – the tobacco planter, moved in Burma was largely oil-producing world, L Drake made the first capital of Azerbaijan – to Sumatra’s east coast in developed by the Romania’s connections successful use of a was producing more 1880. During his travels Burmah Oil Company, stretch back centuries. drilling rig in the US to than half the world’s oil around the island, he founded in 1886 by the However, the first well produce oil at a site on supply from onshore came across traces of oil, Scottish-born merchant, was drilled in 1861 to a Oil Creek in fields first developed by and by 1885, had drilled David Cargill. The depth of 150 metres Pennsylvania. In 1901, oil the Swedish Nobel his first successful well. company introduced (500 feet), using wooden was struck at Spindletop brothers. Meanwhile, in By the turn of the new technology to the rods and auger-type bits. (above), in south Galicia, Ignacy century, oil had been Burmese operations, Ploiesti, in south-central Beaumont, Texas, tripling Łukasiewicz founded the discovered in north and including mechanical Romania, is the chief US oil production first oil well in 1854 and, south Sumatra, central drilling. In 1909, its oil centre of the industry, overnight and kick- during the second half of and eastern Java and east fields and refinery were and in the 19th century, starting the modern the 19th and early 20th Kalimantan, much of connected by a 440 was the largest oil- Texan industry. By 1909, centuries, Galicia was which became a kilometre- (275 mile-) producing centre of the main producing consistently among the valuable resource for pipeline. southeast Europe. area was Oklahoma, world’s top 10 producers. industrialising Europe. followed by Texas.

98 Issue 2 2009 BP MAGAZINE BP Faces

THE NEXT GENERATION Anna Horstkoetter / project engineer

Project engineer Anna Horstkoetter, who joined BP two years ago, is among a new generation of professionals who are preparing the company for a long-term future in Alaska. Anna’s father, John Horstkoetter, joined BP in 1979, and was involved in the design and construction of the field facilities in North America’s largest oilfield – Prudhoe Bay. Today, decades later, Anna is part of the Alaska North Slope renewal programme team that will “With the company’s plans to upgrade and modernise that infrastructure. “With the company’s plans to develop light and heavy oil and commercialise the Slope’s natural gas, I develop light and heavy oil and can clearly see a promising 50-year future. These are very exciting times,” commercialise the Slope’s she says. A graduate of Stanford University, Anna holds a Master of Science degree in construction engineering and management. She is based at the natural gas, I can clearly see a company’s Anchorage headquarters. ■ promising 50-year future.”

Photography> Marc Morrison BP MAGAZINE Issue 2 2009 99 Parting shots

“People who work for BP care deeply about the company; they have green and yellow blood in their veins and I think that’s because this is a company that tries to do the right thing.” Tony Hayward

100 Issue 2 2009 BP MAGAZINE contributors>

NINA MORGAN FRANK BAKER NEV PIERCE worked as an is a lifetime Alaskan is editor-at-large for exploration geologist who retired from BP in Empire, the world’s for seven years before 2007 with 29 years of biggest movie turning to freelance service. He is currently magazine. He has science writing. She a contract writer for interviewed everyone now specialises in the company. from Christian Bale to writing about all Brad Pitt. His favourite branches of science film is Fight Club, and technology. when it’s not It’s A Wonderful Life.

HELEN CAMPBELL MARTIN IAN VALENTINE never gave the oil VANDER WEYER is a freelance industry a thought as is the business editor journalist, with a a ‘green-leaning’ and columnist of The background in country languages graduate, Spectator, as well as and environmental until a two-year stint editor of its monthly issues, who lives in the reporting on European sister magazine, Cotswolds. He has oil markets required Spectator Business. written for BP titles for her language skills. He is also a regular the past eight years. She’s been hooked contributor to the ever since. Daily Telegraph.

TIM WICKHAM ALEXANDER G. KEMP HESTER THOMAS is a business journalist is professor of writes for and about with more than 15 petroleum economics FTSE companies. She’s years’ experience at the University of particularly interested writing about the Aberdeen, and has in the energy industry, serious and humorous been appointed by the marketing, corporate sides of corporate life. British prime minister social responsibility to write the official and profiling people. history of North Sea oil and gas.

With special thanks to Bethan Thomas at the BP Archive and Vartan Amadouny of the BP History team.

The next edition of BP Magazine will be out in July 2009.

BP Magazine was printed using vegetable based printing inks and low alcohol damping on press. The paper was 50% manufactured using 50% de-inked post consumer waste fibre and 50% virgin fibre pulp sourced from well managed forests at a mill accredited for EMAS, ISO14001 and FSC.

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