Bhp Billiton and the Financial Crisis

In: Business and Management

Submitted By liam11
Words 2425
Pages 10
Petroleum Sector

BHP Billiton is one of Australia’s greatest corporate success stories; having grown from humble beginnings in Melbourne, BHP is now a multinational commodities powerhouse and claims to be the world’s largest national resources company. (Annual Report, 2009 pp. B)

The BHP Billiton Petroleum sector has been the focus of big BHP investment dollars of late as the company looks to expand their operations. BHP-B Petroleum produced over 376,000 barrels of oil per day in 2009 and has maintained an impressive 9% annual growth rate since 2007. (Petroleum Annual Review, 2009 pp 5)
BHP Petroleum operates in many countries across the world and is currently undertaking oil and gas projects in Australia, The Gulf of Mexico, Algeria, the UK, Pakistan and Trinidad and Tobago with the intention to expand into Malaysia, the Fawklands and Canada in the near future. (PAR, 2009 pp 5)

The market for petroleum and indeed the mining industry as a whole was unsure what effect the global financial crisis would have and what action affected parties would take during the period. Regardless of the changes, such a large and important company as BHP would have to study the potential changes and start, if necessary, reformatting their financial planning/strategies and other control processes. These would have to be looked at on a whole organisational level; ranging from the BHP hierarchy all the way down to the smaller subsidiaries in order to accurately gauge the potential effects of the changes in the market. BHP put itself in a really good position early in the piece with its sensible investment strategy. BHP management identify, as they did in previous year reports, the need for caution whilst guiding such a large company through the current global recession. This recession equated to a slowing of activity in the commodities market which would have been a…...

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