David Prosser: BP's shareholders are entitled to be furious too
Thursday 14 April 2011
Outlook Bob Dudley and Carl-Henric Svanberg will no doubt cope with running the gauntlet of protesters at BP's annual general meeting today. Mr Dudley, a career oil man, knows this sort of ordeal comes with the territory, even if last year's Gulf of Mexico spill has ramped up the outrage factor, while Mr Svanberg got plenty of practice coping with demonstrations during the height of that scandal last year. Leaving aside the demonstrators' concerns, however, both men deserve a rough ride from their shareholders too.
Mr Svanberg, BP's chairman, ought to regard himself as fortunate still to be in a job. The Deepwater Horizon disaster cost Tony Hayward, the then-chief executive, his post, but could easily have done for Mr Svanberg too. Practically invisible during the early part of the crisis, BP's chairman got involved with the battle only to get the company back on an even keel once Mr Hayward's position had become untenable.
Mr Dudley, meanwhile, wastouted as a safe pair of hands when he succeeded Mr Hayward. It has not turned out that way: the deal with Rosneft, fêted as a breakthrough piece of strategic vision when Mr Dudley unveiled it three months ago, is now mired in a bitter international legal dispute that is set to prove expensive for BP.
Should Mr Dudley have anticipated the way things would turn sour? Well, there was certainly no one in a better position to do so. Having served as chief executive of TNK-BP, before falling out dramatically with the Russian partners in the venture and fleeing the country, Mr Dudley knows better than anyone how poisonous this relationship can turn. He must also have been privy to BP's agreement with TNK-BP that they would talk to each other first should either party want to do more in Russia. It did not require the sharpest legal mind to see that BP's deal with Rosneft might at least have the potential to breach that contract.
BP's senior executives, in other words, have not covered themselves in glory since the last time the company got together for its annual general meeting.
The figures speak for themselves. When shareholders gathered at the ExCeL Conference Centre this time last year, BP shares were trading at a smidgen under 650p. Today, the price is almost a third lower. And do not forget the crucial dividend income, worth several billion pounds, on which investors have missed out.
Environmental protesters are not the only people with cause to vent some spleen today.
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