HI5015 Legal Aspects of International Business and Enterprise Report

This report provides a comprehensive analysis of the legal aspects of BP PLC's international business operations in Australia. It begins with an overview of BP PLC, a multinational corporation involved in the extraction and supply of oil, natural gas, and petroleum, and then delves into the regulatory policies impacting its operations in Australia. The report examines the influence of government decisions, particularly those related to renewable energy targets and the fluctuating oil and gas prices, and their effects on BP PLC's business. Furthermore, it explores the trade agreements between BP PLC and local authorities in Australia, including the company's investments in renewable energy projects and its strategies for reducing carbon emissions. The report highlights the legal consequences of operating in the Australian oil and gas industry, including environmental regulations and the need for water monitoring strategies. Overall, the report offers insights into the challenges and opportunities faced by BP PLC in navigating the legal and regulatory environment in Australia.

Running Head: LEGAL ASPECTS OF INTERNATIONAL BUSINESS AND ENTERPRISE
Legal aspects of international business and enterprise
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Table of Contents
1. Identification of the company...................................................................................................3
1.1 Background description of the company..........................................................................3
2. Regulatory policies affecting the operations of BP PLC in Australia......................................3
3. Trade agreements of BP PLC with local authorities in Australia............................................6

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1. Identification of the company
1.1 Background description of the company
BP PLC is a multinational organisation that is registered in UK as well as USA. the company
follows a vertically integrated model of supplies in for extraction as well as supply of oil, natural
gas as well as Petroleum. BP PLC is a part of sixth largest non state owned energy based
companies. The organisation also has the ownership of a convenience store chain which is
associated with the gas stations of BP PLC. The organisation also invests in production of low
carbon output energy sources as well as supplies energy from such sources as well as Renewable
Sources also. In addition to that, BP PLC is one of the Global leaders in terms of photovoltaic
cells production. The company underwent privatization when the Holdings of British
government was sold in the year 1980 and merging with Amoco in the year 1998 (Bp.com 2019).
The average revenue generation for BP Plc. is $310,138 million (2014). The number of current
employees in the organisation is 94000. Operating across six continents, BP Plc delivers
products as well as services in more than 100 countries (Bp.com 2019).
2. Regulatory policies affecting the operations of BP PLC in Australia
Majority of the government policy decisions affecting the business of BP PLC in Australia are
aligned with the economic factors driving the economy of the country. The first policy decision
that demands discussion in this context is regarding the renewable energy outlook of the country
as per the new energy outlook of Australian government released in 2018, the government
demands that around 59% of power production in Australia will be supplemented by Renewable
Sources within 2035 (Begg, van der Woerd and Levy 2018). This is going to have a significant
negative effect upon the oil and gas production of BP PLC in Australia. This is because majority

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of the oil yielding facilities of BP PLC in Australia associated with production of non renewable
energy. However Scardamaglia and Adams (2016), analyses that the substance of the negative
impact for a longer time period will actually impact the revenue generation of BP PLC from
Australia. In addition to this, according the latest provision of the energy policy of the country
the government has realise the renewable energy output target of the country for the year 2020
by 20% (Moore et al. 2017). Although, the government has declared that they are emphasising
upon the nationalized oil and gas producing companies of Australia like Arrow energy, Bass oil,
Carnarvon petroleum and so on. In spite of that, because of sustained business tenure BP PLC in
Australia, responsibility of the company towards making contribution in order to meet the target
of renewable energy production in the country is also no less significant than the nationalized oil
and gas producers. The sudden oil price slump in Australia because of the decision of
government subsidization is going to impact the multinational oil and gas companies conducting
business in Australia like BP PLC. Nevertheless, the production of LNG by BP PLC is much
higher in Australia compared to the traditional oil and gas production. In this context Dudley
(2018), states that the prices of LNG are generally indexed with the oil prices and hence along
with the slump of prices of oil and gas in Australia, cascading effect will be witnessed on the
extensive LNG market of BP PLC in Australia.
The slower development outlook of the latest Australian government is another major factor that
future development of PLC in Australia and throw higher and more CBSE challenges regarding
the fulfilment of the renewable energy target of the government within the year 2035 (Zhang et
al. 2018). The government has taken the decision of driving down the provision of long term
contract sales for LNG to the multinational organisations. This will have a big bang on the sales
of BP PLC in Australia. So far and so long, this is the company which used to accept all the

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major Logistics civil supply decisions from the Tasmanian, Victorian as well as New South
Wales state governments, which their major competitor being Shell Australia in this context.
Now since shell Australia has a domestic business undertaking under the name of Shell Australia
Limited in Australia comma the corporate benefits that they will enjoy from the Australian
government will be higher compared to that which is to be received by BP PLC in Australia (de
Wit and Quinto 2018). The major reason that forced the Government of Australia to undertake
such a change in their business policy regarding oil and gas industry is that the oil and gas
Ministry of the country has predicted and oil oversupply from the localised as well as
nationalized oil producers after the decision of subsidizing supply of Oil and Gas to the
customers, who are subscribed which the Nationalised Agencies for purchasing oil and gas.
Again, there are some profitable government regulations comma introduced recently, which will
help the production of oil and gas buy BP PLC in Australia compared to any other Asian
markets. The first government policy in this regard is sanctioning of the licence to deploy the
floating production systems over the Indian Ocean and Pacific Ocean. The Trade Commission
report of Australia shows that Australia is going to be one of the first countries who will be
permitting the local as well as International oil and gas companies operating locally, to deploy
floating production system. This will allow the company to explore the untapped oil and gas
reserves in the ocean and that also in a profitable way. Which technology military cutting cost of
oil transport easily. This is because, BP PLC will be able to transport oil tankers rather than
using the local pipelines.since the installation of the floating production system, BP PLC will not
have to pay the charges for using the local pipeline framework. Rather, we can transfer their oil
to the desired locations using their own tankers which will incur 22 to 30% less cost (Wang et al.
2016).

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There are some direct legal consequences of operating in the oil and gas industry of Australia
also. Most of the reserves of non renewable oil and gas are concentrated in Western Australia.
The department of mines and petroleum of the Government of Western Australia has public
released their draft for Petroleum and geothermal energy resources regulations 2014 (Seddon
2015). The regulation provides that the oil and gas companies, specifically multinational
organisations in this context should have proper regulatory policies for protection of the local
communities as well as environment from the impact of Oil and Gas activities. There is one
specific clause of this regulation that needs BP PLC to establish a baseline for their water
monitoring Strategies required for groundwater management. Firstly, when the company is
trying to expand their market in West and South Australia, they will initially require developing
one concrete policy for groundwater assessment. This also keeps them straight under threat of oil
Spillages.
3. Trade agreements of BP PLC with local authorities in Australia
Multinational oil and gas company BP PLC has announced its agreements with the Queensland
government to partially move into the PV power sector. BP PLC has accepted 40% funding from
the local authorities of Queensland. The trade agreement has been formed which terms of of
developing a a 120 megawatts solar farm which is to be developed on the land that forms sum of
its QGC fracking operations in Queensland. This is liquefied gas which is to be developed
through a energy intensive process at export facility of 8.5 million tonne in Curtis Island which is
the biggest LNG production facility of BP PLC in Australia (Clark, Sommerville and Heron
2017).
The New York Queens Land along with the CSO of the solar project of BP PLC jointly
announced that the setting up of this facility at Queensland will help in reducing the carbon

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emission rate of the gas extraction activities of the company in the coastline of Queensland.
According to the chairperson of Australian operations of BP PLC this solar project concept will
support the Global initiative of British petroleum for reducing Greenhouse gas emissions from
95% of their operations within the year 2040 (Begg, van der Woerd and Levy 2018). However,
during announcement of the inauguration of the project, the strategy officer for this project
declared that wider implications from the end of the government towards the energy industry of
Australia are highly required. Nevertheless she forcefully argued that gas exports have to be
facilitated from the facilities of LNG of BP PLC in Australia. The frequent policy backflips as
well as turmoil has also been criticized (Begg, van der Woerd and Levy 2018).
British petroleum has also announced their agreement Australian government to invest in the
natural ecosystems as part of their strategy for acting on the climatic changes in Australia
Mumbai addressing the need for reduction in the carbon dioxide output. As analysed by Seddon
(2015), the major proportion of carbon output is produced by the customers of the oil and gas
companies when the use the products in their own facilities. The company is going to invest
AUD $300 million over this project in the upcoming 5 years. The major initiatives under this
project includes three year target by BPSC starting from 2019 to reduce their own carbon
footprint by at least two to three percent. So far as overall carbon generation through
manufacturer and usage of Oil and Gas products is concerned, BP PLC has contracted with the
Australian government convert 40 to 45% of their energy output into renewable energy (Wang et
al. 2016). However, as per the agreement there is no unique solution for tackling climate change.
The government officials as well as research and development officials of the organisation will
be into a joint initiative for researching various ways in order to reduce carbon output in the
country. One major project target is the shifting of electricity generation from non renewable to

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renewable resources. Other than that the organisation is also providing a big range of transport
solutions for the customers. So far as their agreement with the Government of Australia is
concerned, the company will be getting down to investing for lower carbon options, ranging
from battery electric vehicle charging to the liquefaction of natural gas as well as hydrogen. The
organisation has also work previously under agreement with various European countries to
develop electric charging points for 1 million electric vehicles. In the recent economic Summit,
the CEO of the operations of BP PLC in Australia announced that their agreement with the
Australian government has been revised and now they will be working for development of 500
new Rapid electric vehicle charging stations all over the country (Clark, Sommerville and Heron
2017). In this context, the CPU has also stated that under the agreement the company will be
jointly working with IONITY in Australia towards the realisation of this project. These
initiatives are generating business value for the organisation as a multinational oil and gas
producing company which is working thoroughly with the national government towards taking a
step for mitigation of the issue of excessively high carbon output in Australia. The agreement
with New South Wales government involves the deliverance of significant customer value for
those who drive the internal combustion engine vehicles. BP PLC will be designing simpler
version of the engine for them so that they can reduce their carbon footprint by means of using
low carbon biofuels as well as carbon neutral driving.
Lastly, the great mission of BPSC in agreement with the Federal Government of Australia should
be highlighted here. The organisation has been funded for investing at large scale in forest,
wetland as well as Natural ecosystem development around the country in order to reduce
emission as well as capture more carbon dioxide while benefit in the biodiversity and local
community development. The organisation has also signed a deal with a local NGO in Australia

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for creation of 500 hectares of deforestation project in Victoria and the Great Barrier Reef.
Plantation of simian crease will accompany the initiative for ensuring 100% biofuel driven cars
and motor vehicles in these two regions by the end of the year 2030. As highlighted by the Chief
strategy officer of the organisation, this will be nature based solutions for addressing the climatic
changes and rebuilding Critical ecosystems in Australia.

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Reference List
Begg, K., van der Woerd, F. and Levy, D., 2018. Down to business on climate change: an
overview of corporate strategies. In The Business of Climate Change (pp. 31-46). Routledge.
Bp.com, 2019. Fuel your career by playing a unique part in the future of energy. Available at:
https://www.bp.com/en/global/bp-careers/professionals/locations/australia.html [Accessed on 3rd
May 2019]
Clark, A., Sommerville, D. and Heron, R., 2017. 0346 Relationship between psychological
stress-job satisfaction and weight change in employees at a global oil and gas company.
Occupational and Environmental Medicine, 74, p.A107.
de Wit, E. and Quinto, A., 2018. Environmental law: Climate change litigation: Is your business
prepared?. Governance Directions, 70(8), p.577.
Dudley, B., 2018. BP Energy Outlook. Report–BP Energy Economics–London, UK, 9.
Janusz, P. and Kaliski, M., 2018. Prospects for the use of LNG terminals to meet the demand for
natural gas in the EU. Polityka Energetyczna, 21.
Moore, C., Cappo, M., Radford, B. and Heyward, A., 2017. Submerged oceanic shoals of north
Western Australia are a major reservoir of marine biodiversity. Coral Reefs, 36(3), pp.719-734.
Scardamaglia, A. and Adams, M., 2016. Registering non-traditional signs as trade marks in
Australia: A retrospective.
Seddon, D., 2015. Economics: Declining refineries. Chemistry in Australia, (Sep 2015), p.36.

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Wang, M., Chen, Z.H., Chen, C., Loh, F.C., Manning, T. and Wolfarth, S., 2016. Advanced
deblending scheme for independent simultaneous source data. ASEG Extended Abstracts,
2016(1), pp.1-5.
Zhang, L., Tao, Y., Jiang, Y. and Ma, J., 2018. Research on the Direction of China's Energy
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Web of Conferences (Vol. 38, p. 04018). EDP Sciences.