British PetroleumWhat we know today as British Petroleum is the result of the buying and selling of several companies over many years. One of the companies, the Standard Oil Company, was created in 1870 by John D. Rockefeller in Cleveland, Ohio. By 1892, while not yet selling gas-based products, Standard Oil companies provided lubricating products to keep horse-drawn wagon parts moving without friction. One of the other companies, the Angelo-Persian Oil Company, was founded in 1905. By 1908 they were producing gas-based products and in 1912 they discovered a way to double the production of gasoline produced from one barrel of oil. At the same time they managed to find a way to increase the octane level of the gasoline produced. Industry Analysis Today, British Petroleum is one of the largest energy companies in the world. They provide their customers with transport fuel, energy for heating and electricity, retail services and petrochemical products for daily household use. British Petroleum is involved in the exploration of oil and other natural resources that can be converted into energy. British Petroleum is committed to finding fuel sources that reduce greenhouse gases and carbon footprints. They hope to do this by researching and perfecting alternative fuel sources such as fossil fuels, solar energy, wind energy, hydrogen and natural gas. Competition in the oil and energy sector is fierce. British Petroleum competes with companies such as Exxon-Mobil and Chevron in three main industries; Energy and utilities, chemicals and retail. These major players have been able to keep competition high by finding economies of scale in production and finding more and more ways to automate processes. Industry output is expected to grow at a compound annual rate of 5-7% between 2007 and 2012. Domestic output was slow in 2007 compared to 2006, increasing by 0.5%. This is the slowest rate of output since the last U.S. recession. Profitability measures Return on equity: 22.2%----2007 26.4%----2006 27.4%----2005 Return on equity has declined over the last three years and as much as the 5%. Despite the decrease, BP is right in line with the industry average of 22%. lower than the industry average of 13.8. Book value per share: $29.71 --- 2007 $26.02 ---- 2006 $23.14 ---- 2005 The industry average is $36.26 per share, indicating that BP has fewer assets that can be converted into cash.