The real villain of BP

26 June 2010

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John Browne transformed BP into the second biggest oil company in the world, says Tom Bower. But his obsession with cutting costs came at a terrible price

At Tony Hayward’s inquisition in Washington last week, the hapless BP chief executive resisted the temptation to condemn his predecessor, Lord Browne of Madingley, by name. Instead, pressed repeatedly to explain why BP had breached safety regulations on over 700 occasions, Hayward described 2006 as the corporation’s worst year. That was John Browne’s last full year as chief executive. He left the job humiliated, having been exposed for signing an untruthful court statement. Ever since, Browne has defended that dishonesty as a unique aberration. But as the American investigation of the Gulf catastrophe develops, the blame for the poisonous legacy inherited by Hayward will increasingly be heaped on Browne. The credibility of the British government’s proposed ‘cuts czar’ will be shredded.

To his credit, Browne transformed BP from a dying corporation in the early 1990s into the world’s second largest oil behemoth. He refocused BP on ‘elephants’ — the big oil reservoirs — and ruthlessly cut costs. He used BP’s rising share price to stage audacious takeovers of failing oil companies, especially in America. His success earned worldwide plaudits. The man who re-branded BP as ‘Beyond Petroleum’ — the world’s most environmentally friendly oil company — boasted during his visits to Washington’s power brokers that BP was not only the largest producer of oil in America but the most successful explorer in the Gulf of Mexico, one of the most challenging areas in which to discover oil. By then, BP, with its expanding operations in Russia, Asia and South America, was the trailblazer for the oil industry. The company flourished by consistently discovering new reserves to replenish the oil it had extracted.

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Al

June 27th, 2010 6:27pm Report this comment

There are so many mistakes in this article it's hard to know where to begin. Five minutes googling reveals:
John Manzoni trained as a petroleum engineer and is not an accountant.
Thunder Horse tilting had absolutely nothing to do with any equipment on the seabed - it's a floating platform.
Cost-cutting orders of Browne's turtles?? They are "Executive Assistants" and cetainly don't issue orders.
Please let's have some genuine, well-researched journalism.

JohnAnt

June 30th, 2010 9:04pm Report this comment

Excellent article.
Interesting to read about BP's loss of engineering memory through sacking in-house experts and farming out projects and insufficiently supervising them.
So many organizations have gone this route...Suddenly people wake up when it's too late: the process is irreversible.
There's an important bit of the H&S regs that most people who do the courses conveniently forget - about ultimate supervisory responsibility.

Ashton Emery

July 27th, 2010 10:28pm Report this comment

Have only just read Tom Bower's article. (We're a bit behind in South Africa.) I'm afraid that Tom isn't quite the investigative journalist that he pretends to be. BP pioneered deep sea drilling and mistakes were bound to happen and can't be blamed on previous mangement or Hayward.

Tom once wrote a biography of Al Fayed that was absurdly biased. He was supposed to investigate the truth but his description of Henri Paul as a drunk was totally out of line, although in line with all official views. The Ritz hotel video recordings don't lie. I can't balance, when sober, to tie my shoelaces as perfectly as Henri Paul did before he drove the car in which Dodi Fayed and Princess Diana died. Paul was not umpteen times over the drink limit as was repeatedly 'found'.

BP, Browne and Hayward are victims of a president and Congressmen who are seeking votes. Tom could do better as my school reports used to say. He plays to the gallery rather than doing the proper research.

Yours,

Ashton Emery (Dr)

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