Falling oil prices have hit energy companies hard, and none more than BP. The oil and gas giant had a difficult year in 2015 with its upstream business in particular bearing the brunt of this, reporting a pre-tax loss of $700m (£530m). Added to these woes are the continuing liabilities from the Deepwater Horizon oil spill in the Gulf of Mexico in 2010, which has so far cost BP £61.6bn.
But the FTSE 100 member remains optimistic and has shown a will to invest. As such, BP has had a busy H1 2016, undertaking transactions in its upstream and downstream portfolios as it looks to expand its operations globally while minimising costs.
Leadership team
In February BP restructured its executive management team and Lamar McKay, previously chief executive of the upstream business, took up a new position as deputy group chief executive. McKay reports to group CEO Bob Dudley, who was appointed to the role in 2010. BP’s board is chaired by Carl-Henric Svanberg, who is also chairman of vehicle manufacturer AB Volvo. There are 10 non-executive directors including Rolls-Royce chairman Ian Davis.
In-house team
Rupert Bondy became group general counsel in 2008 after joining from GlaxoSmithKline (GSK), where he was made senior vice-president and general counsel in 2001. Bondy, who initially spent time in private practice at Morrison & Foerster and Lovells (now Hogan Lovells), oversees the legal and compliance functions.
Associate general counsel Eva Bishop has responsibility for the legal aspects of BP’s downstream business and leads a global team of 130. Prior to this Bishop was assistant general counsel for BP’s global lubricants business. Meanwhile, fellow associate general counsel Michael Drew leads a team of 40 lawyers and has responsibility for the development and exploration divisions of BP’s upstream segment after serving as the company’s chief lawyer in Russia and Canada.
Jim Neath, also an associate general counsel, manages business and environmental litigation in the US and internationally. Neath, who led BP’s litigation response to the Deepwater Horizon spill, has held a number of senior in-house roles at BP since joining the company in 1991.
Group general counsel Rupert Bondy joined BP in 2008, from GSK”
Chief intellectual property counsel and associate general counsel James Trussell has been at BP since 2007 after serving as assistant chief intellectual property counsel at manufacturing company 3M. Meanwhile, Abu Dhabi-based assistant general counsel Akmal Abbas is responsible for BP’s exploration and production activities in the Middle East and North Africa.
Sarah Randall, a former associate at Allen & Overy (A&O), is managing counsel for competition law, while Lynn Shaw, also a former A&O associate, is managing counsel for gas, power and emissions trading. Freshfields Bruckhaus Deringer alumna Michelle MacPhee, meanwhile, heads BP’s London-based dispute resolution team. Alasdair Murray is managing counsel for M&A.
Deal activity
In troubled times BP has set its sights on achieving long-term growth through disciplined investments and divestitures. According to Lawyer Market Intelligence (LMI) data BP’s deal activity in the first half of 2016 has centred on Egypt, Norway and Russia. In June 2016 BP entered into a joint venture with Russian state oil company Rosneft to conduct exploration in the West Siberia and Yenisey-Khatanga basins. In the same month BP merged its Norwegian business with oil exploration company Det Norske Oljeselskap, creating Norway’s largest oil and gas producer.
However, it is BP’s growing presence in Egypt after gas discoveries in the region that have come to dominate the company’s 2016 activity. Egypt has become an attractive market for BP as it looks to exploit the country’s energy deficiencies in the face of an ever-increasing population. BP has a number of major projects underway in the region, including the West Nile Delta project which is expected to generate 1.2 billion cubic feet of gas a day when production starts in 2017. BP has also accelerated its development of the Atoll gas field in the East Nile Delta.
The company has undertaken selective divestments in a bid to balance the books. LMI data shows activity has increased year-on-year since 2012, peaking between 2014 and 2015 with a $10bn divestment programme. This strategy has continued into 2016, albeit at a slower rate. One recent deal saw the company sell its Alabama petrochemical complex to Indorama Ventures.
External advisers
In 2014 BP expanded its UK general panel from eight to 10, with Addleshaw Goddard, Ashurst, CMS Cameron McKenna, Freshfields and Herbert Smith Freehills making the cut together with Linklaters, Norton Rose Fulbright, Olswang, Pinsent Masons and Simmons & Simmons.
At the same time the company appointed nine firms to its UK specialist panel, with Sullivan & Cromwell the sole US-based firm to secure a place. Both panels are due for review in 2017. As part of the 2014 selection process BP added a reverse auction element and placed an emphasis on cost-efficiency.
Outside these panels LMI data shows that BP has instructed Arnold & Porter, Covington & Burling, Gibson Dunn & Crutcher and Kirkland & Ellis, while Clyde & Co and DLA Piper have also been used.