Sample Essay on PESTEL Analysis of British Petroleum

PESTEL Analysis of British Petroleum

British Petroleum [BP] is a British multinational oil and gas company situated in London. It is the sixth-largest energy company in the world by market capitalization.  It is a widely reputed company that operates in areas of oil and gas industry and it focuses on exploration, production, refining, distribution and marketing. BP has also been successful in petro-chemicals, power generation and trading among many other activities.  The BP working environment is quite competitive and conducting its PESTEL analysis is one of the great ways of understanding how the company of operates in the modest environment.

It is a brilliant idea to understand market growth or decline or any directions for operation. For any company to line up positively and develop with the changing business operation it has to adhere to the powerful forces of change that impact the business environment. British petroleum has been active in the energy industry and it has operations in over 80 countries and produce amazingly around 3.8 billion barrels of oil.

During its widespread and complex history in the energy market, BP has been involved in a number of environmental, safety and political controversies. There are key macro environmental factors to keep in mind while conducting a PESTLE analysis for BP and they include;

  • Political factors- This refers to government policy such as inter-countries relations, trading policies and lobbying among others. World energy markets are becoming more volatile because of geopolitical instability and changing oil requirements of a buoyant Chinese economy that has been creating instability among many nations. Climate de-stabilization from carbon dioxide emissions spurs governments to go for more maintainable forms of energy.


  • Economic factors- Economy of many nations that rely on BP is underpinned by its energy supply. Alternative energy sources are increasing and expected to rise with time posing a lot of threats on BP.
  • Social factors- People’s worldview is changing and increasing concerns over the sustainability of the future. The Kyoto agreement of 1992 has led to carbon funds and emission trading to become a legal requirement.  These factors may also include cultural issues, average society age, population growth rate and social attitude among other factors impacting BP socially.
  • Technological analysis- Technology is another environmental and external factor that impacts British Petroleum operations. BP has been open to any technological related issues or developments that have made it easy to explore, refine, distribute and market oil and gas.
  • Environmental factors- Environment is quite substantial when it comes to businesses. Extraction, refining and production of petroleum lead to emission of harmful gases that impact the environment. The UK Environment Management System has come up with different law that aid control oil and gas operations and take care of any risk posed by these operations.
  • Legal factors- Health and safety policies are usually regulated by the government. The UK government is concerned with the health of the people linked with the oil industry. This helps to protect the personal health of workers in oil exploration, drilling, distribution and consumer disposal. The oil legislation is also concerned with raw material obtained during these processes.

British Petroleum has developed with great advancements in the world. In fact, it has developed many oil fields and constructed refineries in different nations. BP and its subsidiaries work together to engage in the investigation, manufacture, refinement, shipping and delivery of oil and natural gas. From the above PESTLE analysis, investors easily learn how BP has been able to overcome problems that come with oil and gas extraction and other processes.

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