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Profitable Empire. Nonetheless, the left-wing fury is understandable. The Labor government came to power pledged to extend nationalization of basic industries; now it will be surrendering a large chunk of perhaps the most profitable investment any British government has ever made. FORTUNE ranks BP fifth among the seven international oil companies?the so-called Seven Sisters ?with sales in 1975 of $17 billion. From London, Chairman David Steel, an affable Oxford-educated lawyer who is a tough negotiator, oversees a global empire. It embraces more than 650 production, refining and marketing subsidiaries in Europe, the Middle East...
More important, BP's profit prospects are bright. The company, hit hard by global recession, registered the lowest profits of any of the seven international oil giants in 1975?$336 million. In last year's first nine months, profit rose less than 6%. Estimates are that earnings will more than triple this year and will rise a further 60% or more in 1978.* Reflecting these great expectations, BP common has almost tripled since the start of 1975, to $13.44, making it Britain's hottest industrial stock...
...reason is that BP has huge interests in the world's two most exciting sources of new crude, Alaska and the North Sea. The BP-Sohio partnership has leased the largest chunk (its proven reserves: 5.1 billion bbl.) of Prudhoe Bay fields on Alaska's North Slope. According to an agreement between the two companies, as the flow of Alaskan oil increases so will BP's share in Sohio, rising from 26% now to 51%, probably some time next year. In the North Sea, BP's wells are expected to produce more than 650,000 bbl. a day by 1980?...
...BP's strength has always been its ability to find oil. The company was started in 1909 by William Knox D'Arcy, an adventurer who somehow had wangled a concession to explore in Iran. The British government bought a 51% stake in BP in 1914 because Winston Churchill, then First Lord of the Admiralty, wanted a secure source of oil for the navy. Known originally as Anglo-Persian, the company was renamed British Petroleum several years after the government of Mohammed Mossadegh nationalized its Iranian concessions...
Early Warning. By then, BP had bought up concessions all over the Middle East. But the Iranian nationalization served as an early warning that the region's political instability made dependence on Middle Eastern crude risky. Realizing that its other concessions in the Middle East and North Africa might be nationalized too?in fact several of them have been?BP's management foresightedly stepped up the search for oil in politically friendly (though environmentally frigid) climates, from the North Sea to the Labrador shores and Alaska's North Slope. The company began buying leases in Alaska as early...