Page 15 Advertisements Column 1

Press, Volume CI, Issue 29872, 12 July 1962, Page 15

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THE BRITISH PETROLEUM COMPANY LIMITED Bp REPORTS AND ACCOUNTS FOR 1961 CHAIRMAN'S STATEMENT the same as in the previous year. As. however, there is little sign of any genera) improvement in , „ . , , _ prices it is to lower operating expenses we must , The following are extracts from the Statement chiefly look if our present profit margins are to be t. Chairman. The Hon. M. R. Bridgeman, improved. We arc therefore constantly examining C.8.E.. and the survey of operations which has cach haBC o) our opcrations to ensure t hat. by the been circulated to Stockholders wtth the Report adoptjon of nfwcr techniques, the cost of our and Accounts for the year ended December 31, operations is reduced to a minimum. ' , Our group profit over the last three years has Energy consumption in 1961 outside the am o un t e d to £lB5 million and our sales to 214 Communist zone rose by some 3%. • little more mi|lion tons . So for these three years our margin than half the increase in 1960, and oil consumption was | rss than £1 prr ton or less than Id per by 5%. Middle East production rose by just over gallon j n , %1 j( was 15s ton or rath „ more 7%, and there was a further rapid expansion in than a halfpenny a gallon Africa where exports of crude oil from Periods of surplus, like the present, may proLibya began in the autumn. £| UCf a situation in which the newcomer with Competitive conditions persisted throughout negligible overheads may seem to have the edge the year, particularly in the European markets over the integrated company, because he is operatwhere about 4Q% of our sales are made, and ing in a small way in a resticted area. But such there is no Immediate sign of their easing. The situations do not last for ever and Ido not think cause of this state of affairs is to be found in the that, if the bulk of the world s oil trade had been smaller increase of world demand, although it is handled during the last 15 years by a large still substantial, in the surplus capacity in all the number of smaller concerns, each dealing with main exporting countries, in the development of one only of the many functions involved, the exports from new producing areas and especially interests of the consumer would have been satisfied in the continued expansion of supplies from the so well or at such small expense. Communist area. If prolonged, the present low Moreover, the integrated companies have been selling prices, in which Russian oil plays a major able to ensure to the producing countries prices part, could at some future date endanger the which have enjoyed a greater stability than those energy supplies of Europe by making it difficult of most other raw materials. Ido not think this to finance ■ the development of facilities for would have been possible if the producing Industry bringing oil to the consumer in the growing had been divorced from refining and marketing, quantities necessary. Companies such as ours have a double function In spite of these unfavourable conditions BP to perform in that it is their business to ensure group sales of crude oil and refined products in at ’he same time a market for the producer and 1961 again increased and totalled over 78 million a dependable source of supply for the consumer, tons, a rise of some 7|% compared with 1960. If one market becomes blocked for fiscal or There is every prospect that the world demand poliitical reasons it is our business to develop for petroleum products will continue to expand another and to ensure no producing country is and lam confident that BP will continue to obtain deprived of an outlet for its exports, and that no its share of this expanding market. consuming country is in danger of being left within some quarters the view has been expressed out several alternative smirces of supply at that the profits of the integrated oil companies economic prices. are excessive. Our own results for the year 1961 In Papua, where we retain a small interest, show. I think, that this is not the case. An our Australian partner who is responsible for integrated company like our own Is of course a financing and managing the next stage of exconcern which produces and trades in oil ’ ploration is planning further work. throughout all the stages involved We believe In Australia. Frome-Broken Hill, ig which we it is impossible to assess in isolation the true hold a one-third interest, carried out further profitability of any one of the several functions geophysical surveys and drilled two more wells such as the actual production or transport or in Victoria. Although these yielded some shows of refining or marketing of the oil. without making gas. no commercial discovery was made, assumptions which are largely arbitrary as to the In New Zealand, wet gas at great depth was part which each plays in determining the price met in one well. Appraisal of this discovery conat which the product is sold. tinues. The other well which was begun in 1960 The only figure that really matters in the case in the Gisborne area was abandoned owing to of an integrated oil company is the net income difficult drilling conditions Further drilling is in after tax remaining with the group when the re- progress in this area. suits of all its constituent elements have been set The BP Touring Service, providing help and one against the other. advice to those touring aboard with their cars. It will be noted that for the first time our has been improved, and we are now catering for gross income has exceeded the £l.OOO million the special needs of the growing number of motor mark but in spite of this our net income after boat users. tax at £6O million was slightly lower; This is In Australia we continue to increase our due almost entirely to narrower profit margins marketing network to meet the growing demand since, by comparison, operating expenses are much for our products. REPORT OF DIRECTORS to fl«nrral reserve. The preference dividends (net) ncvni vr vinuviwnu jntfr|m ordinary d , vjdend pa ld amount to Tk. lM .,„s Vsft: Income of the group before taxation at of sto S k ; ° f inc °™ »«• •» 176 £142.1 million compares with £144.9 million in carr, « l forward 1960 Capital expenditure incurred by subsidiary Sales of crude oil and products, which exclude companies in 1961 amounted to £B4 7 million and transactions of a reciprocal nature, were 78.3 the groups proportion of capital expenditure by million tons, a 7j% increase over the previous associated companies was £39.2 million, making year. Sales income is still adversely affected by a total of £123.9 million (£109.1 million in I 960), the continuing intensive competition in the in- Of the £BB.B million overseas taxation for the dustrv. year. £836 million arises in Iran. Iraq. Kuwait The taxation charge is £81.5 million (£82.5 and Qatar, in which territories payments in the • million in 1960). made up of overseas taxation nature of royalties of £43 million have also been £BB.B million (£92 million) and a United Kingdom made and are taken into account prior to arriving tax credit of £7.3 million (£9.5 million). The net at the group income before taxation. The total income of the group is £60.1 million (£62.2 for the Middle East countries from the group in million). 1961 is therefore £126.6 million which compares Your Directors have appropriated £3O million with £l2B million in 1960.