Margareta Pagano: Terrorist outrage won't scare BP out of Algeria
Attacks like this are endemic and par for the course to the oil and gas industry, which operates in some of the most dangerous parts of the world
Margareta Pagano is a former business editor of the Independent on Sunday who now writes columns and business interviews for a range of publications, including the Independent, Independent on Sunday and London Evening Standard.
Sunday 20 January 2013
If Bob Dudley doesn't already have balls of steel after his Russian escapade and the Deepwater Horizon disaster, then the BP boss will have them after the terrible Algerian terrorist attack.
Mindful of past tragedies, Mr Dudley hasn't wasted a second in meeting the crisis head-on and is now flying home all non-essential staff back home as well as stepping up security at BP's second gas facility at In Salah. There are other BP workers at an exploration site close to the siege and at Hassi Massoud, some 450 km away, who might also be brought back.
For now, BP is making sure that the safety of staff – and fellow workers at the gas fields – is a priority. The details are still hazy but BP has already brought home about 11 of its 50 staff working in Algeria and more are due home this weekend.
Less than 20 were working at the In Amenas gas field and a similar number are at In Salah, which is also operated with Algeria's national oil company, Sonatrach, and Norway's Statoil.
However sad this tragedy is in terms of human loss, it's unlikely that the siege will change BP's operations in Algeria, or in any of the other dangerous parts of the world in which it operates. It may be brutal but these sorts of attacks or kidnapping are endemic to the oil and gas industry and par for the course. If BP were that worried by risk, the oil giant wouldn't have announced it is now going back to Iraq. BP's share price, which bounced back up on Friday to 460p, is saying the same.
Algeria's gas is a chunky revenue earner for BP but it's not critical, like Russia was. What is pumped out of the Saharan desert is equivalent to about 1.5 per cent of its output. But relations between the two go back a long way, and they are close. Since returning to Algeria in the 1990s, BP was one of the first foreign oil companies to help Sonatrach develop its massive hydrocarbon reserves which have made it one of the Magreb's richest countries. Until BP sold half its share in the two gas fields to Statoil, it was the single-biggest foreign investor in Algeria and its status there is still unequivocal.
The timing of the assault couldn't have come at a trickier time for Algeria, now the third-largest gas supplier into Europe with pipelines across the Med into Spain and Italy and is one of the world's biggest producers of liquefied natural gas.
President Bouteflika's government has been making a big push to attract western investors as it diversifies away from oil and gas revenues. Until now, apart from oil giant's like Statoil, ENI, Total and Cepsa, it's been the Chinese who have swarmed into Algeria. Chinese companies are the biggest partners in all the new infrastructure projects which are part of the $298bn (£187.8bn) four-year plan to modernise the country.
Other than BP, the Brits are noticeable by their absence, something that Lord Green, minister for trade, is hurriedly trying to change by encouraging UK companies to do more business. This latest disaster won't have helped in the short-term.
But there's a much bigger story in Algeria. As well as some of the world's biggest oil and gas reserves, geologists have recently discovered huge shale-gas deposits in Algeria, which could dwarf those found in the US and Europe. No wonder BP won't leave.
Energy expert, Professor Dieter Helm at Oxford University, says once the Europeans get just how big these deposits are, they will have to take this country on its doorstep more seriously. Maybe this will also persuade the Brits, and the west, to heed what the Algerian diplomats have been quietly warning about the dangers of the Islamist fanatics in sub-Saharan Africa
What modern retailers need is the panache of Mr Selfridge
What a shame the shopping maestro, Harry Gordon Selfridge, is not around to give us his thoughts on the latest blood-letting on the high street following the collapse of Jessops, HMV and Blockbuster.
My hunch is that the US entrepreneur would curl his lip and pronounce these shops deserved to disappear as they forgot the basics of shopping; it's got be fun and glamourous as well as functional.
There's a long list of good explanations being given for why these retail chains have gone bust. It's the fault of the internet, high rents and higher rates, the growth of supermarkets, austerity, mountains of debt and product innovation.
But actually the reason is far more simple – the owners and managers of these shops had forgotten what retailing was about. More bluntly, customers didn't want to visit their shops any more because they were boring.
Viewers of ITV's new period drama, Mr Selfridge, will know this. Whatever you think of the series, which has too much of a pantomime air about it for my liking, Selfridge made shopping a thrill. As Lindy Woodhead's wonderful book, Shopping, Seduction and Mr Selfridge (from which the series was adapted) shows, the American was a genius at persuasion. As well as displaying Louis Bleriot's plane that had just crossed the Channel in the Oxford Street shop, he held election night parties attended by celebrities such as Winston Churchill and Nöel Coward.
He invited world famous sportsmen and music hall stars to meet his customers and gave them a taste for the 24/7 media era by having ticker-tapes machines pumping out breaking news on the shop floor. To cap off your shopping, you could go skating on the roof. Why would you go anywhere else?
Today, Mr Selfridge would probably put Tim Berners Lee, inventor of the world wide web, on display or ask Jeff Bezos of Amazon – who is being blamed for everything going bust – to meet customers. And, for a dash of glamour, he'd go for Jessica Ennis.
As Mr Selfridge might have said, the only constant in life is change. It's time for other retailers to catch up.
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