News USA
BP to Form Separate Business to Manage US Oil & Gas Assets
BP has this month announced its intention to establish a separate business to manage its onshore oil and gas assets in the US Lower 48.
The US Lower 48 onshore oil and gas business environment has unique characteristics. Responding to these, the new business will operate separately from the rest of BP and will be designed to adapt to the rapidly changing and hyper-competitive
energy
landscape in the region. This move is expected to help unlock the significant value associated with BP’s extensive resource position in the US Lower 48 onshore, which BP currently oversees through its Houston-based North America Gas group.
“Over the last few years, we have fundamentally reshaped our North America Gas portfolio,” said BP Upstream Chief Executive Lamar McKay.
BP has done so by divesting non-core assets and focusing development in leading US unconventional plays like the Eagle Ford Shale in South Texas. “Now it’s time to reshape the way we run the business - and we are very excited about this bold step forward,” he said.
BP will own the new US Lower 48 onshore business, with safety remaining its top priority. But the business will be led by a separate management team and be housed at a new location in Houston, apart from BP’s Westlake campus. It will have separate governance, processes and systems designed to address the unique competitive and operating environment in the US Lower 48 onshore. And BP is expected to begin disclosing separate financials for the new business in 2015.
These changes are chiefly intended
to improve
competitiveness of the US Lower 48 onshore business through greater speed of innovation, faster decision- making and shorter cycle times from access through to production, together with more efficient cost management.
“Our overriding goal is to build a stronger, more competitive and sustainable business that we expect will be a key component of BP’s portfolio for years to come,” McKay said.
The changes to BP’s US Lower 48 onshore business are consistent with the group’s strategy of delivering value over volume. BP also believes these moves will enhance efforts to develop industry- leading technology that will be a critical part of BP’s global strategy in unconventional oil and gas resources going forward.
“Participating in the US Facebook Acquires WhatsApp
Facebook has announced that it has reached a definitive agreement to
acquire
WhatsApp, a rapidly growing cross-platform
mobile
messaging company, for a total of approximately $16 billion, including $4 billion in cash and approximately $12 billion worth of Facebook shares. The agreement also provides for an additional $3 billion in restricted stock units to be granted to WhatsApp’s founders and employees that will vest over four years subsequent to closing.
The acquisition supports
Facebook and WhatsApp’s shared mission to bring more connectivity and utility to the world by delivering core internet services efficiently and affordably. The combination will help accelerate growth and user engagement across both companies.
“WhatsApp is on a path to connect 1 billion people. The services that reach that milestone are all incredibly valuable,”
said Mark
Zuckerberg, Facebook founder and CEO. “I’ve known Jan for a long time and I’m excited to partner with him and his team
to make the world more open and connected.”
Jan Koum, WhatsApp co- founder and CEO, said, “WhatsApp’s
extremely
high user engagement and rapid growth are driven by the simple, powerful and instantaneous
messaging
capabilities we provide. We’re excited and honored to partner with Mark and Facebook as we continue to bring our product to more people around the world.”
Commenting on Facebook’s acquisition, Ajay Bhalla,
Professor of Global Innovation at Cass Business School, said:
“Facebook’s acquisition of Whatsapp for an eye-watering $19bn shows that price is clearly not an issue when it comes to judging the potential value of a platform in deal making. No doubt, Whatsapp is a huge success story. It was one of the first to bring a Blackberry BBM- type experience to iOS and then Android. It also successfully monetised its platform and did so even in emerging markets at the expense of BBM. Beyond improving
the usability
adding new features, it is hard to say what else Whatsapp can do. It has been a focused player and devoted attention towards growing its scale rather than developing new services such as voice and video calling.
and
“For Facebook this is clearly a coup. The company will use it to develop a new experience within its mobile platform. Not only will Facebook get access to Whatsapp’s impressive user base and intellectual assets, it will also get access to Whatsapp’s expertise in monetising services in emerging markets.”
15
Lower 48 onshore is key to our upstream strategy because we believe the region will remain at the forefront of innovation and drive global learning in unconventional McKay said.
resources,”
The approach BP intends to pursue for its US Lower 48 onshore business is specifically
designed in response to the unique business environment in the region. Much of what BP does in other onshore regions around the world will continue to rely on the scale, capital, technology and project management capabilities that only a major international oil company can provide.
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