View from City Road: BP has poured oil on troubled waters

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The Independent Online
Amid all the heat and noise of the Enterprise Oil/Lasmo takeover battle, British Petroleum will next week quietly announce a set of first- quarter figures that mark its final return to grace and favour in the City.

Given that the oil price is presently lower in real terms than anyone can remember, it will be an impressive, rock-solid performance with not a hint of that much-rumoured blockbuster of a rights issue that analysts once thought BP urgently needed to revive its fortunes.

Looking back on it now, it seems hard to believe that only two years ago BP was widely perceived to be in a state of profound financial and management crisis.

With the oil price failing to recover as predicted, Bob Horton was unceremoniously ejected as chairman and chief executive and the share price sank to an all-time low of 185p.

A large programme of cost-cutting and asset disposals had to be brought on stream as a matter of urgency.

As so often happens in such circumstances, the extent of BP's troubles was always hugely exaggerated in both the City and the press. Things were never quite as bad as painted. But that should not be allowed to take away from David Simon's achievement as chief executive. Under his stewardship, BP has made a remarkable recovery to financial health and he has managed to banish all talk of a rescue rights issue. Today the shares trade at 386p. Enough said.

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