BP Amoco British Petrochemical Corporation registered on April 14, 1909, as the Anglo-Persian Oil Company, Ltd. It was named the Anglo-Iranian Oil Company, Ltd., in 1935 and changed its name to the British Petroleum Company Limited in 1954. The current name was adopted in 1982. The companys headquarters are in London. The Anglo-Persian Oil Company was formed in 1909 to take over and finance an oil-field concession granted in 1901 by the Iranian government to an English investor, William Knox DArcy. (Britannica) In 1914 the British government became the companys principal stockholder and over the years was usually the largest single stockholder. Effective January 1, 1955, British Petroleum became a holding company. In the beginning of the 1977 the British government reduced its ownership of BP by selling shares to the public, and in the late 1980s the government turned over BP entirely to private ownership by selling its remaining shares of the company. In 1987 BP acquired the remainder of the Standard Oil Company for almost $8 billion reinforcing its position as one of the largest oil companies in the world. Amoco Corporation formerly Standard Oil Company, American petroleum corporation, was founded in 1889 by the Standard Oil trust to direct the refining and marketing of oil in the Midwestern states. The companys first refinery, outside Whiting, Ind., produced fuel oil, kerosene, and other petroleum products. Around 1910 Standard Oil developed the cracking process, which became the most important method fro producing gasoline from petroleum. In 1911 the U.S. Supreme Court dissolved the nationwide Standard Oil trust, and Standard Oil (Indiana) became independent. Its headquarters are in Chicago. (Britannica) In the 1920 Standard Oil acquired partial interest in companies that owned Midwestern oil fields and pipeline networks in order to add production to its refining and marketing operations. In the 1950s Standard Oil became active in oil exploration and production ventures in South America and the Middle East. In 1961 most of the companys U.S. operating activities were unified in the American oil company, for which Standard Oil (Indiana) served as a holding company. The byname Amoco was increasingly used as a brand and corporate name. In 1985 the Standard Oil Company (Indiana) became officially the Amoco Corporation. On December 30,1998, BP and Amoco confirmed that the US Federal Trade Commission (FTC) has granted regulatory approval for the merger of the two companies and that completion of the deal will take place at year-end. Both companies agreed to intend to close the transaction shortly after 2100 hours London time on December 31, 1998, when Amocos stock will leave the Standard & Poor 500 and the shares of the merged group, BP Amoco p.l.c., will be listed on the London Stock Exchange. With a market capitalization of more than $140 billion, BP Amoco p.l.c. is the Britains biggest company and one of the worlds top three oil majors. We aim to play a leading role in meeting the worlds needs for oil, gas, solar power and petrochemicals without damaging the environment. BP AMOCOS WORLD The BP Amoco group stands out as a complete provider of energy and petrochemicals. Every day they serve millions of customers with products to the quality of their lives fuel for transport, energy for heat and light, solar power, and petrochemicals for plastics, fibres and fabrics. Explorers from Amoco and BP have led the way in finding the worlds giant oil and gas fields and getting energy to the worlds marketplace. According to Larry Fuller and Peter Sutherland, co-chairmen, the meeting the demand of energy calls for a blend of outstanding human and technical skills, sophisticated global organization and two-way relationships with local communities, customers, contractors, partners, government and employees. BP Amocos aim is to be successful in everything they do by delivering outstanding performance. Their business is about discovery about finding, producing and marketing the natural energy resources on which the modern world depends. Their sales revenues, market value, and oil and gas reserves make BP Amoco one of the three largest integrated energy companies in the world. They operate in one hundred countries on six continents. Each day they generate almost three million barrels of oil equivalent production, of which sixty-five percent is oil and thirty-five percent natural gas. They have well-established operations in Europe, North and South America, Australia and much of Africa. BP Amoco is distinguished by the financial resources to operate on a global scale, the technical capacity to seize opportunities, and a flexible management structure. The core of their business is a world-class set of assets. In Britain they are the largest producer of oil and gas from the North Sea and West of Shetland. In the United States they are one of the largest producers of oil and gas, based on major assets in the Gulf of Mexico, Texas and Alaska. In South America they are the largest international oil and gas investors in Argentina, Colombia, Trinidad and Tobago, and Venezuela. BP Amocos transport network criss-crosses the globe. They operate 23,000 miles of pipeline, most of it in the United States. They also control an international tanker fleet of more than thirty-five vessels, either fully owned or on long-term charter. Natural gas can be used as a fuel with minimal processing, but crude oil needs to be refined before it becomes a fuel that can power vehicles, ships and places or be turned into heating oil for industry and commerce. The cost of running refineries means that each of the eighteen facilities they wholly or partly own must be highly competitive and efficient. Once refining is completed, the different products are moved to storage terminals by ship, barge, pipeline or rail. From there they are usually delivered to customers by road tankers. Every day they sell or trade 4.4 million barrels of refined products. On land, on the sea and in the air, BP Amoco products help to keep the world moving. Each day they serve tem million customers worldwide. Products are marketed under the red, white and blue Amoco Brand in the United States and under the green and yellow BP brand in the rest of the world. In the United States, BP Amoco has about fifteen thousand service stations. They are a leading supplier of premium gasoline in America. Outside North America they have a worldwide network of 11,500 service stations. They operate in about one hundred countries. BP Amoco is also one of the worlds largest marketers of aviation fuel and a major supplier of fuels and lubricants to the global shipping industry. Customers can call for their fueling services at more than eight hundred ports and six hundred airports. BP Amoco is the worlds third largest petrochemicals company, based on a diverse, highly integrated product portfolio and strong marketing positions in North America, Europe and the Far East. BP Amoco operates large-scale chemicals manufacturing plants in the United States, Britain, Belgium, France, Germany and Brazil. Thirteen joint-venture projects in seven countries give BP Amoco a powerful platform for expansion in Asia, including China, Singapore, South Korea, and Malaysia. BP Amoco holds leading position is seven core products acetic acid, acrylonitrile, aromatics, purified terephthalic acid (PTA), alpha-olefins, purified isophthalic acid (PIA) and polypropylene. BP Amoco is the worlds largest producer of PTA, which is used to manufacture polyester, and polybutene from which engine oil and lubricants are made. They also produce raw materials for plastics such as polystyrene and polyethylene the versatile polymer use in products from food packing to gas pipes. Another of their products, polypropylene, is the source of a variety of everyday products. Other BP Amoco chemical products are used for applications as diverse as pharmaceuticals, cosmetics, detergents, packaging, coatings, adhesives, fuel additives, cable insulation, microfilm, cassette tapes, and synthetic rubber. WHAT THEY STAND FOR The merger of BP and Amoco combines the resources, skills and experience of two great companies, companies that already share similar values and policies. According to Sir John Browne, the chief executive officer, the formation of BP Amoco will provide an opportunity to improve our performance by building on the track record and the highest achievements of each company. BP Amoco will aspire to deliver excellent performance in every part of our business and to be in touch with the reality of the world in which they are operating. They want to build relationships on the basis of mutual advantage the needs of those who do business with them, and the needs of each community in which they operate. They aim to conduct their operations without accidents, no harm to people and no damage to the environment. They apply their skills, technology, and know-how to the search for creative and constructive solutions. Their business policies are universal. Their commitment is to use these policies to raise their own standards. BP Amocos goal is to play a leading role in meeting these needs from oil, gas, solar power and petrochemicals without damaging the environment. Innovation will be the hallmark of the way they work with people, technology, assets, and relationships. BP Amoco believe that their activities should generate economic benefits and opportunities and their conduct should be a source of positive influence. Their business policies focus on five areas ethical conduct; employees; relationships; health, safety and environment; control and finance. They are committed to respect the rule of law, develop employment practices, create mutual advantage in all relationships, demonstrate respect for the natural environment, and manage their financial performance. They expect that everybody who works for BP Amoco to take responsibility for living up to these commitments. Their measures of success are the extend to which they meet those commitments, the long-term value they create for their shareholders, the pride of their employees in their accomplishments, the satisfaction of their customers and all those with whom BP Amoco do business, and the way communities judge their activities. BP AMOCO CHEMICALS BP Amocos main activities are exploration and production of crude oil and natural gas; refining, marketing, supply and transportation; solar power and manufacturing and marketing of petrochemicals. BP Amoco Chemicals manufactures and markets wide ranges of petrochemicals, intermediates, plastics, and specialities. Each year they sell more than 25 million of petrochemicals, specialities and fabricated products worldwide, creating an annual turnover of $9,691 million in 1998. They operate large-scale manufacturing plants in the United States, the United Kingdom, Belgium, France, Germany, Malaysia, and Brazil. Thirteen joint-venture businesses in seven countries give a powerful platform for growth in Asia, including China, Singapore, South Korea and Malaysia. BP Amoco Chemicals holds leading positions in seven core products acetic acid, acrylonitrile, aromatics, purified terephthalic acid (PTA), alpha-olefins, purified isophthalic acid (PIA) and polypropylene. Some of their products are used internally as the raw materials for other downstream chemicals, others are sold to customers for use in application as diverse as pharmaceuticals, cosmetics, detergents, packaging, wire and cable insulation, lubricants, textiles, agriculture and agrochemicals, electrical and electronic components, automotive parts, aerospace and aviation and in the building and construction industry. One of the main factors in their success has been in developing and applying advanced technology to their manufacturing processes and BP Amoco Chemicals owns a number of proprietary technologies. Among these is Innovene, a gas phase manufacturing process for polyethylene. They also have leading-edge technology for the manufacture of polypropylene. Other includes Cativa, an iridium-based catalyst for acetic acid, naphthalene dicarboxylate (NDC), a chemical that makes polyesters stronger and more heat-resistant, and their acrylonitrile process, which is used in 95 percent of the worlds acrylonitrile manufacturing capacity. On February 17, 2000, BP Amoco Chemicals announced that they are studying options to debottleneck production at their purified terephthalic acid (PTA) plant at Cooper River, South Carolina. BP Amoco is studying options for a new world-scale, 700,000 metric tonne PTA unit that could be brought on-stream by the end of 2003. (Northern Light, 2000) Everybody who works for BP Amoco Chemicals is responsible for getting health, safety, and the environment right. Good health, safety, and the environment performance and the health, safety and security of everyone who works for BP Amoco are critical to the success of their business. They are committed to respecting the rule of law, conducting their business with integrity, and showing respect for human dignity and the rights of the individual wherever they do business. They are also committed to respect the natural environment and work towards their goals without no accidents, no harm to people and no damage to the environment. FINANCIAL HIGHLIGHTS January – June 1999 1998 Replacement cost profit before exceptional items ($m) 1,903 2,358 Replacement cost profit after exceptional items ($m) 880 2,420 Historical cost profit after exceptional items ($m) 1,459 1,632 Earnings per ordinary share on replacement cost profit before exceptional items (cents) 20 25 Dividends per ordinary share (cents) first quarter second quarter 10.010.0 9.510.0 Dividends per ordinary share (pence) first quarter second quarter 6.16.2 5.86.0 Dividends per ADS (cents) first quarter second quarter 60.060.0 57.060.0 Capital expenditure ($m) 3,263 5,065 In the 1998 Annual Report co-chairmen of BP Amoco described the merger of BP and Amoco as a groundbreaking deal for the oil industry. A strong second-quarter of 1999 result as merger cost savings began to come through produced replacement cost profits for the half of $2,128 million, before exceptional items and after adjusting for special charges of $225 million. These profits were about 12 percent down on a year ago. Net debt increased to $15,1 billion. The ratio of net debt to net debit plus equity was 26%. The exploration and production business generated $2,435 million of replacement cost operating profit for the half year after adjusting for special charges. This represented an improvement of 10% on the first half of 1998, despite lower oil prices, and reflected several factors higher oil and gas production, lower costs stemming from savings and the benefits resulting from post-merger rationalization. Replacement cost operating profit for the half year was $956 after adjusting for special charges down 31% on the same period in 1998. At $474 million, replacement cost operating profit after adjusting for special charges was 29% lower than same period in 1998. Chemicals production was 8% up on the first half of 1998 as sales improved. LOOKING TO THE FUTURE On July 15, 1999, BP Amoco announced new targets. They will lop $4 billion of its annual costs, sell assets of $10 billion and boost capital spending to a total of $26 billion over the three years to the end of 2001. According to Sir John, BP Amoco will continue to improve efficiency and intend to high-grade the portfolio with $10 billion of disposals. They plan to invest for growth and to maintain their gearing within a band of around 25% to 30% and to maintain our dividend policy of paying out 50% of underlying mid-cycle earnings. BP Amoco will continue to plan on the basis of a low oil price, driving down supply cost to ensure the groups robustness at $11 a barrel. Capital spending this year should be around $7 billion and disposals $2 billion. Some $2.2 billion of the cost-reduction targets is expected to come from the upstream business, $1.4 billion from refining and marketing and $400 million from petrochemicals. After the $10 billion of divestments, the group expects to see gas production growing by 5% a year, and oil production by 8% a year. CONCLUSION BP Amoco is proud to be part of an organization that does much to improve the quality of life of people everywhere. They believe that their business should be both competitively successful and a force for good. They seek to conduct their business in a manner that is distinctive, responsible and forward-looking. BP Amoco strives to be a good citizen. This is reflected in their active support for the people and communities where they operate. A good business should be both successful and a force for good.