British Petroleum (BP) is one of the true giants of industry, a century-old multinational leader in the energy industry. BP has long been a favorite of investors, and in the years following 2000, it has been unusually profitable thanks to rising oil prices. BP has an added attraction for the small investor because it offers a direct stock purchase plan as well as being a publicly traded company in the United States and Great Britain.
Identification
British Petroleum is a publicly traded international corporation headquartered in London, England. The stock trades on the London Stock Exchange using the stock symbol BP. BP stock in the form of American Depository Receipts (ADR) is also traded on the New York Stock Exchange with the same symbol. Americans may also buy ADRs through the company's direct stock purchase plan. Complete investment information is available on BP's Investor Relations website.
History
BP was founded in 1908 after seven years of frustrating exploration in Persia (now Iran) finally paid off when British entrepreneurs William D'Arcy and George Reynolds struck oil. Lack of success at penetrating the monopoly of the American market by Standard Oil nearly sank the company until it won a British Navy fuel contract on the eve of World War I. BP grew enormously between the World Wars as automobiles took hold of the popular imagination. World War II was not a good time for BP, as the wartime demands necessitated rationing and pooling arrangements that did not work in the company's favor. In 1951, BP's Iranian holdings were nearly lost when the newly independent country tried but failed to nationalize their oilfields. BP began to expand its holdings, meeting with successes such as the development of offshore oilfields in Scotland. With continuing instability in the Middle East, BP has steadily deemphasized the region and by the end of the century only 10 percent of its oil supply came from the area.
Products
BP's primary business is the extraction and refining of oil and natural gas. In addition, they have a strong retailing operation under subsidiaries Arco and BP filling stations. They also own Castrol motor oil products and Air BP (aviation fuel). Since 2000, BP has again began to shift the focus of its efforts by taking the lead among major oil companies in devoting research and development funding to alternative energy sources like biofuels.
Size
As of 2007, British Petroleum had $238 billion in assets with equity of $93 billion. They employed approximately 96,000 people in a globe-spanning corporate empire. Buoyed by rising oil prices, their profits rose to nearly $21 billion on revenues of $291 billion.
Investment
Investors can find the company's Annual Report, updates, and related information on their website. Of particular interest to many investors is the BP Direct Access Plan, a direct stock purchase plan designed with the small investor in mind. The plan is administered by BP's transfer agent, JP Morgan Chase. You can begin investing with a commitment of as little as $250, which is payable in $50 a month increments if you set up automatic debits from a bank account. There are no up-front fees or transaction fees for purchases of stock. The plan prospectus is available online and features free dividend reinvestment and the option of setting the account up as an IRA.
