The United Kingdom

British Petroleum (BP) was founded as the Anglo-Persian Oil Company in 1909. In its early years, BP's primary producing properties were located in Iraq, Abu Dhabi, Kuwait and Qatar. Between 1914 and 1995, the British government maintained an interest in British Petroleum, and at times the government's holdings exceeded fifty percent. The privatization of BP began about 10 years ago when the British government sold about 32 percent of the company to the public. In 1995, the final 1.8 percent government share in BP was sold to the public, making BP a fully-privatized company. British Petroleum is the twelfth largest producer of crude oil in the world. BP is also Britain's largest industrial company. BP's downstream operations are also sizable. BP is the world's fifth largest refiner, with BP's downstream operations largely based in Europe and the United States.

Recent energy privatizations in several global regions has resulted in a substantial number of new investment opportunities for BP. In recent years, BP has continued to expand its retail networks in Eastern Europe and it has added nearly 100 service stations in eastern Germany, the Czech Republic, and Hungary. In recent years, BP has targeted new frontier petroleum areas for investment. The company has reached a $3.5-billion agreement with Sonatrach to develop gas fields in Algeria {see Endnote 14} . BP is also a major player in Colombia and Vietnam, and is pursuing exploration opportunities in Venezuela and Azerbaijan {see Endnote 15}. Since 1990, BP and Statoil, the Norwegian state oil company, have been working in close commercial cooperation in a number of areas. A program of joint research is underway, and the two companies are also undertaking joint exploration and development work in Azerbaijan, Kazakhstan, Vietnam, Angola, and Nigeria {see Endnote 16}.

In contrast to its decided move into several frontier areas, and as a result of having undergone a substantial restructuring of operations in recent years, BP has generally reduced its level of investment in the company's historic markets. This restructuring has been most evident in downstream petroleum. Since 1991, BP has reduced its employment level in refining and marketing operations by 32 percent versus a 23-percent reduction in upstream employment {see Endnote 17} . BP has sold three of its U.S. refineries in recent years and has sold marketing operations in California and Florida. In 1995, BP announced plans to shut down or sell three refineries in the U.S. and Europe, cutting capacity by nearly a third {see Endnote 18}. In 1994, BP sold its Spanish retail network (excluding motorway sites) to Repsol and, in 1996, announced that it would close 250, or 17 percent of its retail gasoline outlets in Germany {see Endnote 19}.

One result of privatization has been the company's increased attraction to foreign investors, particularly those based in the United States--the largest capital market in the world. British Petroleum is currently 17 percent held by U.S. investors, up from 6 percent ownership as recently as 1991{see Endnote 20}. U.S.-based investors are now the largest owners of BP's shares, after investors from the United Kingdom, who have a 70-percent share.