Investing in our Future, Rob Day
“We’ve come a long way this year,” said Rob Day, President of East/Gulf US Fuels Marketing with BP, as he briefed participants on BP’s plans for investing in fuel development, customers and brand in 2008.
But before he began, Day was adamant about setting the record straight on two issues: “First,” said Day, “the branded jobber channel is our growth channel east of the Rockies. We intend to grow and nurture this channel.” Second, he assured participants that BP US Fuels is staying in Chicago. “Contrary to what you may have read,
we are not going anywhere.”
Day went on to share BP’s plans for investing in fuel development in the US, including developing oil and gas reserves, extending energy supplies, and developing low carbon technologies.
“During the next five years,” he noted, “we will invest in new energy development in the US totaling about $30 billion.” These investment plans include the following:
- More than $3 billion expansion of BP’s Whiting refinery
- $700 million to upgrade refineries in California, Indiana, Ohio and Washington
- $1 billion to build four new crude oil supertankers
- $600 million in North Slope, Alaska
- $15 billion in the Gulf of Mexico
- More than $1 billion in Texas City
- $500 million in distribution infrastructure
“I came on as a new jobber in August. This BPAMA event is a great program. The other brands I’ve worked with do not have anything near the organization of this. The access and interaction with BP execs is very helpful. Great program.”
Quality State Oil , Sheboygan, WI
Investing in customers
Day continued on to share BP’s commitment to customer focus. “BP is a customer-facing organization.” As such, he noted, “Competitive pricing and reliable supply are critical aspects of our value proposition.”
In particular, Day acknowledged that supply reliability is BP’s top priority. “We are looking at every element in the supply chain for improvement opportunities. We have made some good steps. We are getting a much better handle on demand through demand forecasting,” he explained.
According to Day, in its commitment to improving supply reliability, BP not only is improving demand forecasting, but also is:
- Investing in terminal and pipeline assets ($150 million projected in 2008)
- Expanding ethanol supply to the Eastern Gulf customers
- Optimizing tanks/pipelines for improved reliability
Investing in operational excellence
Beyond improving supply reliability, 2008 will also be focused on operational excellence and continuous improvement across the value chain, said Day. “Safety and reliability will be first and foremost in everything we do going forward.”
Reducing organizational complexity is one avenue BP is pursuing to improve operations, explained Day. This includes empowering the front line, BP’s jobber sales managers (JSMs), he noted. With higher levels of authority and accountability, JSMs can be more effective in working with jobbers.
Focusing on the future
“Our mission is to deliver value today, while we focus on the future,” Day remarked. “We are putting ourselves on the forefront to create the next generation of fuel and energy.” As such, the company is actively engaged in the research and development of environmentally responsible, renewable fuels.
In the US, this means expanding ethanol distribution, while focusing on what’s next. “Ethanol will be around for the next 10 to 20 years, but it is not where we will end up. We are also working on biobutanol, but that is not where we will end up. Where will we be? That has not yet been determined, but we are working on many interesting technologies in the US and around the globe to secure our place in the transportation energy space.”
Some of the forward-looking activities BP is pursuing in the US include:
- Blending 14 percent of the ethanol used in the US today
- Expanding the number of terminals offering ethanol
- Collaborating extensively with DuPont
- Investing more than $500 million over 10 years with University of California, Berkley and University of Illinois for Energy Biosciences Institute
Some of the forward-looking activities BP is pursuing globally include:
- Building a 100 million gallon ethanol plant in the U.K. with a biobutanol pilot plant
- Conducting first biobutanol road testing in the coming months
- Partnering with D1 Fuels to produce Jatropha, a non-food crop for biodiesel production that can be
grown on land unsuitable for conventional crops
Earning the business with clarity and consistency
In conclusion, Day thanked participants for their business, and noted how highly they are valued.
“At the end of the day, we know it’s your money,” he said. “It’s the money you make; the money you will retire on; the legacy you will leave your children. We plan to earn your business each and every day with clarity and consistency.”