Ultimately, BP’s new CEO is lipstick on business as usual
Published Tuesday, 27th July 2010
As BP CEO Tony Hayward is transferred, Captain Stillman-style, to a company joint venture in Russia, American-born Bob Dudley will step in to take his place. Given Dudley’s link to the Gulf Coast — he grew up in Mississippi — his anointment is a wise short-term decision, considering the devastating impact the oil company’s Deepwater Horizon disaster has had on the region. But how much of a makeover will this really be for the company over the longer term?
Short answer: not much, probably.
Yes, as Dudley himself has said, the new BP will end up a much smaller version of the company today, with $30 billion in assets expected to be sold to help raise revenues to cover the costs of the Gulf disaster. And it’s likely the oil firm will try to adopt stricter standards and controls for its operations, if for no other reason than to appease investors’ concerns about exposure to future risks.
But the company’s fundamental raison d’etre won’t change. Despite BP’s green branding efforts over the past decade, don’t expect it to now — for real — move “beyond petroleum.”
Because, so long as there isn’t a fair and universal price on carbon, petroleum is the energy source where the money is to be made. It’s also an energy source that’s growing ever harder to extract, with a rising proportion of world reserves now located in politically troubled, dangerous parts of the globe … or in deep, deep reservoirs far below the ocean floor. Unlike, say, fine cigars or vintage wines, though, petroleum isn’t a product people stop buying when their wallets run thin. So whatever it costs BP to extract the world’s remaining oil, it knows it will be able to pass those costs on to consumers.
In other words, the Gulf oil disaster (along with all the other petroleum disasters that receive less scrutiny in our corner of the world) in the long run isn’t BP’s problem … it’s ours. And it will continue to be until the global price of carbon reflects the true cost of our oil addiction.
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