When you think of BP jobs, you probably don't think of commodities trading. The global petroleum company employs a massive 83,900 people, most of them in its core business of petroleum exploration, extraction and processing. However, BP also runs an 'integrated supply and trading' (IST) arm which trades oil, gas and related products.
As banks like JPMorgan, Morgan Stanley and Barclays pare or cut their physical commodity trading arms, BP's commodities trading jobs look increasingly appealing. The company also offers a graduate recruitment programme for commodities professionals - albeit one that's small and difficult to to convert into a job.
We spoke to Carol Howle, regional business leader for BP's oil and gas trading business in Europe. This is what Carol said about getting a job there.
So, what's the difference in working for the commodities trading arm of BP and working in the commodities business of an investment bank.
Well... the first thing to say is that BP's integrated supply and commodities trading group is there to provide a core service to the rest of the group. Whether we're trading oil and gas, power, emissions, or finance (for example foreign exchange) - it's all done in order to help the group as a whole to function.
Your finance trading function sounds interesting. Is that just about hedging, or are people there able to take some proprietary risk?
The treasury side of the business looks after our natural flows - for example, we have major payments coming and going in different currencies and we need to manage our exposure to currency changes. We do also take some discretionary risk around that, but most of our activity is in service of the group.
Outside of treasury, is most of your activity about trading physical commodities?
A lot of it is, yes. We are one of the largest physical traders in the world. We have a huge physical portfolio and access to ships, pipes, refineries and retail systems - our role is to optimize that flow. We do also have a global structured products group. That's all about offering innovative commodity hedging structures to consumers and producers.
Are there any special challenges to trading within a larger organisation?
Sometimes there can be, yes. We have the added complexity of reputational risk and client impact, which means we have to think about the fallout for our upstream and downstream relationships when we're placing trades. Trading can be a very short term business, but oil extraction is a far longer term affair. There's no point in us generating value over 24 months when that damages a relationship that's crucial to an investment for the next 10 or 20 years.
Is banks' pullback from commodities trades creating an opportunity for you?
Banks are mostly pulling back from the physical commodities side. Where we see a strategic fit from their disposals, we might step in and grow our portfolio, but it's a question of how they fit with the portfolio we already have.
Are you interested in hiring commodities traders who are let go by banks?
We're always looking for people with expertise that can complement our own - both in terms of trading, structuring and risk and infrastructure
Do you run a graduate recruitment programme?
Yes, we have five in total. There's a specific trading programme. We also have a more general commercial graduate programme and support programmes around analytics, technology and finance risk and compliance.
How many graduates do you hire?
Last year we hired 27 into IST. We usually hire around 8-10 into the trading programme, but it's more about quality than quantity - we'll change the numbers depending upon the calibre of applicants.
What kinds of graduates do you look for?
We want people who can demonstrate initiative, who have a hunger to succeed, who are interested in the business, who can perform under pressure and who really want to come and work for us. A lot have economics, finance, and engineering backgrounds, but we're also looking at hiring linguists, historians and even musicians (research shows that musicians are more likely to be mathematicians).
Does everyone who goes into your trading programme become a trader?
Not necessarily. The trading programme is a three year rotational programme with continuous mentoring appraisals and feedback. During that period, some people usually decide that they'd rather work in the analytics areas looking at macro and micro economics, or origination or structuring. For those who do want to be traders, we run a five day assessment programme which gradually builds in intensity and complexity. People who pass that assessment are able to become traders.
The trader assessment programme sounds interesting. Can you provide any more details of what it involves? How many people come through it?
It involves everything from trading games to strategy assessments. Anything from a handful of the class to 50% of the participants typically come through.
You came into BP without a degree. How easy is it for other people to do the same?
We do employ people straight after their A levels - it's very similar to the graduate scheme, but our school leaver programme takes four years instead of three. If school leavers are demonstrating the aptitude required to become a trader, they can apply for assessed trainer course too.
What's your favourite interview question? And how do you hope people will answer it?
I always ask, 'Why do you want to join our company and why do you think you can add value?' - Those are good questions for working out whether someone's really thought about their application and what it would mean to work for the corporation. If they can't answer the question properly, I question whether they've got the initiative that's required to work for us.
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