BP changes focus in Africa for $3bn boost

BP in Africa

UK-based oil giant BP have told governments and employees in the African nations of Namibia, Malawi, Tanzania, Zambia and Botswana that it is to sell its marketing businesses there in an effort to focus on improving the profitability of its refining operations over the next two to three years to boost the company's annual underlying pretax profit by more than USD$3 billion.

The decisions comes in the wake of a 'strategic review' by BP into its refining and marketing operations in southern Africa, showing that the company should focus on those countries which offered the greatest synergies with its supply portfolio - Mozambique and South Africa.

BP are keen to maintain the momentum triggered by a successful restructuring programme that cut cash costs more than $2.4 billion in 2009 and made it the best performing major oil company last quarter, as reported by the WSJ.

Financial performance

"While our portfolio ranks amongst the best in the industry, our financial performance has yet to reflect this," said BP CEO Tony Hayward. "Our direction is clear: the unrelenting pursuit of competitive leadership in respect of capital costs, capital efficiency and margin quality."

BP Africa's Chief Executive, Sipho Maseko, has told governments and employees in South Africa and Mozambique that the company is staying in these two countries and will be investing to grow the market share and strengthen BP's value chain position.

He said: "I would like to stress that BP is and will stay committed to Africa."

"We have significant operations in Angola, Mozambique and South Africa and in Algeria, Egypt and Libya. We will continue to grow and invest in those markets, especially in the value chain infrastructure.

New owners can build on assests

"We have discussed with the South African and Mozambique governments our desire to remain, and invest in, these two countries where we prefer to see our operations grow significantly," he added.

Maseko was eager to stress that these countries need not panic over BP's strategic decision, and that the company is optimistic about swiftly finding a purchaser taking into account the "strong economic outlook of the region as a whole".

"A new owner can build on our good assets and grow the business further. All of our operations are leading marketing businesses, with strong market shares, well run operations, experienced and capable employees and strong health and safety performance," Maseko said.

Relatedm Articles:

What next for Shell? | Total invest in Nigeria | Petrobras strike oil off Angola

Daniel Jones

Daniel is a Politics and Philosophy graduate from Cardiff University where he also worked as a section editor on the award winning student newspaper. After university he joined an IT support company where he was a B2B online writer. He loves anything to do with sport and joined GDS in July 2009.

Like this article? Get the RSS feed: