BP 2007 Annual Report Download - page 33

BP ANNUAL REPORT AND ACCOUNTS 2007 31
Marketing
Marketing comprises three business areas: Fuels marketing (including
ground, aviation and marine fuels, bitumen and LPG), Lubricants
(including automotive, marine and industrial lubricants) and Aromatics &
Acetyls. We market a comprehensive range of refined products, including
gasoline, gasoil, marine and aviation fuels, heating fuels, LPG, lubricants
and bitumen. We also manufacture and market PTA, paraxylene (PX) and
acetic acid through our Aromatics & Acetyls business.
thousand barrels per day
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Sales of refined productsa2007 2006 2005
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Marketing sales
UKb339 356 355
Rest of Europe 1,294 1,340 1,354
US 1,533 1,595 1,634
Rest of World 640 581 599
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Total marketing salesc3,806 3,872 3,942
Trading/supply salesd1,818 1,929 1,946
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Total refined products 5,624 5,801 5,888
$million
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Proceeds from sale of refined
products 194,979 177,995 155,098
aExcludes sales to other BP businesses and sales of Aromatics & Acetyls products.
bUK area includes the UK-based international activities of Refining and Marketing.
cMarketing sales are sales to service stations, end-consumers, bulk buyers and
jobbers (i.e. third parties who own networks of a number of service stations and
small resellers).
dTrading/supply sales are sales to large unbranded resellers and other oil companies.
The following table sets out marketing sales by major product group.
thousand barrels per day
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Marketing sales by refined product 2007 2006 2005
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Aviation fuel 490 488 499
Gasolines 1,572 1,603 1,603
Middle distillates 1,119 1,170 1,185
Fuel oil 429 388 379
Other products 196 223 276
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Total marketing sales 3,806 3,872 3,942
Marketing volumes were 3,806mb/d, slightly lower than last year,
reflecting reduced industry demand in Europe and supply disruptions
caused by the outage at Whiting refinery.
BP enjoys a strong market share and leading technologies in the
Aromatics & Acetyls business. In Asia, we continue to develop a strong
position in PTA and acetic acid. Our investment is biased towards this
high-growth region, especially China.
BP supports its businesses through a dedicated Strategic Accounts
organization. Strategic Accounts develops strategic relationships with
carefully selected large multinational customers in targeted markets,
where mutual strategic and financial value can be created. Its operating
model manages each relationship in a disciplined manner to achieve
growth and efficiency for BP and its partners through focused offer
development and capability building.
Fuels marketing
Our Fuels marketing strategy focuses on optimising the fuels value chain
and delivering refined products to the market. We do this by
co-ordinating our marketing, refining and trading activities to maximize
synergies across the whole value chain. Our priorities are to operate an
advantaged infrastructure and logistics network, drive excellence in
operating and transactional processes and deliver compelling customer
offers in the various markets where we operate. The fuels business
markets a comprehensive range of refined oil products focused on
ground fuels, aviation, marine and bitumen sectors.
Ground fuels
The ground fuels business supplies fuel to retail consumers through
company-owned and franchised retail sites as well as other channels
including wholesalers and jobbers. It also supplies commercial customers
within the road and rail transport sectors.
BP’s value creation in ground fuels is obtained through the integration
of the value chain from the refinery gates or import hubs across retail and
commercial channels to market. Convenience retail offers are managed
as an autonomous business model focused on delivering appealing
convenience offers across the various markets in which we operate,
through the BP Connect, am/pm and Aral brands.
Our retail network is largely concentrated in Europe and the US, with
established operations in Australasia and southern and eastern Africa.
We are also developing networks in China with joint venture partners.
$ million
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Store salesa2007 2006 2005
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UK 713 647 628
Rest of Europe 2,974 2,821 3,069
US 1,712 1,755 1,776
Rest of World 670 591 610
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Total 6,069 5,814 6,083
Direct-managed 2,609 2,528 2,489
Franchise 3,460 3,286 3,533
Store alliances ––
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Total 6,069 5,814 6,083
aStore sales reported are sales through direct-managed stations, franchisees and the
BP share of store alliances and joint ventures. Sales figures exclude sales taxes and
lottery sales but include quick-service restaurant sales. Fuel sales are not included
in these figures. Not all retail sites include a BP convenience store.
Number of retail sites
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Retail sitesa2007 2006 2005
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UK 1,200 1,300 1,300
Rest of Europe 7,400 7,700 7,900
US (excluding jobbers) 2,500 2,700 3,100
US jobbers 9,700 9,600 9,700
Rest of World 3,300 3,300 3,200
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Total 24,100 24,600 25,200
aRetail sites includes all sites operated under a BP brand. Changes in the number of
retail sites over time are affected by, among other things, dealer/jobber-owned
sites that move to or from the BP brand as their fuel supply agreements expire and
are renegotiated in the normal course of business.
At 31 December 2007, BP’s worldwide network consisted of some
24,000 locations branded BP, Amoco, ARCO and Aral, around the same
as in the previous year.
At 31 December 2007, BP’s retail network in the US comprised
approximately 12,200 sites, of which approximately 9,700 were owned
by jobbers and 500 by franchisees. Our European network amounted to
approximately 8,600 sites with a further approximately 3,300 sites in
Rest of World. The joint venture between BP and PetroChina (BP-
PetroChina Petroleum Company Ltd) started its operation in 2004. The
joint venture plans to operate and manage a total network of 500
locations in the Guangdong province and 400 sites were operational as at
31 December 2007. The joint venture with Sinopec commenced
operations in 2005. The joint venture plans to build, operate and manage
a network of 500 sites in Hangzhou, Ningbo and Shaoxing within
Zhejiang province. As at 31 December 2007, 220 of these sites were
operational.
We continue to improve the efficiency of our retail asset network and
increase the consistency of our site offer through a process of regular
review. In 2007, we sold 462 company-owned sites to dealers, jobbers
and franchisees who continue to operate these sites under the BP brand.
We also divested an additional 204 company-owned sites to third parties.
Each of our fuels brands, BP, Amoco, ARCO and Aral, carries a very
strong offer and we also aim to share best practices between them.
Since 2003, we have been upgrading our fuel offer with the introduction
of Ultimate gasoline and diesel products. In 2007, we launched Ultimate
in Switzerland and Luxembourg and now market Ultimate in 17
countries. In 2007, we launched our Helios Power campaign in the US
aimed at reinforcing the BP brand’s positioning in key markets.
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