PESTEL Analysis of British Petroleum

PESTEL Analysis of British Petroleum

Through the PESTEL analysis of British Petroleum, the company is able to know the situation of the market in order to properly shape itself for sustainable operations. British Petroleum is London based multinational company, mainly dealing in oil and gas. Its core businesses are focused on exploration, production, refinery, marketing and distribution. BP provides fuel for transport, energy for heat and light, lubricants for engines and petrochemicals used in the manufacture of daily utilities.

In terms of market capitalization, BP is the sixth largest energy company globally. Besides, it owns four other brands; Aral, Castrol, Wild Bean Café and ampm.

Evaluation of PESTEL Analysis of British Petroleum

The following PESTEL analysis of British Petroleum will discuss the political, economic, social, technological, environmental and legal issues that the company should consider it the markets where it operates.


BP is a multinational energy company that targets the global market. This implies the success of its operations heavily relies on the political temperatures across the world. Currently, many countries are experiencing political stability with exception of some Arab countries and other parts of Africa. However, there are concerns over the reducing oil prices and changing oil requirements, considering many countries are now pushing for alternative energy sources.


In developed nations like the UK, America and Australia, the economy is not likely to have an impact on the sustainability of BP. In such countries, there are expectations of growth in income levels, driving demand for the company’s products. However, developing nations are still facing economic challenges, which are likely to reflect on the company’s profitability. However, there are certain key economic factors that the company has to keenly look at including; interest rates, the exchange rates of different currencies and inflation.


The social standards are rapidly changing, and these may have an impact on the demand for petroleum products and availability of labor. For instance, the majority of the United Kingdom’s population is ageing, and as a result of this, there is an increase in companies that are committed to offering pensions to their employees. Besides, the rate of population growth is also another social factor that may influence BP’s operations in the global market.


In all the areas that British Petroleum deals, there is need for technological developments. Many customers today are interested in online shopping for almost everything and this implies the company has to develop proper infrastructure to ensure that it meets this growing demand. Besides, the use of technology in exploration, production and marketing of its products is also another key element to be considered.


With regards to the environment, there is growing concern over the use of fossil fuels, which produce harmful emissions like carbon. Although oil still remains one of the main sources of energy, the trends are slowly shifting towards alternative energy sources that are considered eco-friendly. In fact, many countries today are developing laws to help in curbing the environmental risks posed by petroleum companies.


The laws keep changing based on the governments of the day and the need for legislations. There are various legal issues that may affect the operations of BP including; employments laws, health and safety policies and taxation policies. Since BP is involved in exploration and production of oil, it must comply with the existing laws regulating those activities in the respective areas where they conduct those operations. Many governments are concerned with the safety and health of workers in the industry as well as the populations living in areas where oil exploration is done. Besides, the company should also look at the level of taxes levied on its products across the various markets.


The above PESTEL analysis of British Petroleum has outlined a few of the key considerations that the company should make in order to ensure the sustainability of its operations in the market. Although it is not very easy to manipulate economic factors, the company has the power to develop and implement strategies for sustainable operations in the changing social and technological climate. Besides, it must also enhance its commitment to environmental conservation and comply with the existing laws in various markets across the world.

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