BP Corporation’s Sources of Finance: A Critical Analysis

International Financial
Management

Contents
Critically analyses and evaluates BP Corporation’s sources of finance....................................................3
REFERENCES................................................................................................................................................6

Critically analyses and evaluates BP Corporation’s sources of finance
BP is a well-known corporation in the combined petroleum industry, providing products
such as fuel, lubrication, electricity, and chemical products. The corporation engages with all
associated fields to retain its renowned reputation, covering oil and gas drilling, manufacturing,
processing, advertising, and transportation, as well as power and petroleum products
development and marketing. Offshore, middle, and upstream are the 3 primary sectors in which
the company works. BP is engaged in the extraction, site preparation, and research of oil and
natural gas in the upstream operations (Eichengreen and Shah, 2020).
As it faces a catastrophic oil disaster, BP Plc is considering a variety of debt funding
options, including credit facilities and a bond fund issue of up to $10 billion. Normal & Poor's
officially downgraded BP BP.LBP.N, making any attempts to increase finance more difficult. BP
is evaluating all possibilities, including a bank credit facility, as per a participant. A bond sale
might change as soon as next week, as per the individual. As per experts, Blackstone Group,
Goldman Sachs, Morgan Stanley, Credit Suisse, and UBS are some of the businesses helping the
company. Each organization has declined to make a statement about the problem.
Bigger companies can obtain payments by utilizing a variety of sources of funding, which
are separated into two groups: domestically funded and internationally funded. Cash reserves,
disposals, and lesser inventories, longer repayment arrangements for providers and rapid debt
collection for debtors are all domestic sources of financing. External funding choices, on either
hand, are separated into three types: long-term, moderate-term and quick funding. Long-term
financing options comprise shares, marketable securities, lines of credit and scholarships, while
current and long financing options include leasing, leasing and bank loans, these included bank
loans, borrowers, and financial loans/overdrafts.
This indicates that the market provides a number of financing options via which enterprises
may swiftly get money, but banking firms must consider particular financial aspects while
granting a loan application. Several of the aspects that should be considered are as follows:
Debt situation: The mortgage lender should examine the company's debt problem to see if
current debt exceeds the stipulated amount. This financial component assists lending institutions