B&E’s Steven Philip Warner talks to various global oil & climate experts from the likes of Goldman Sachs, Credit Suisse, Standard & Poor’s, Argus Research, JBC Energy & Varda Group to find out what awaits BP’s fate? Will BP, which as recently as two months back was the second most valued oil major in the world, disappear?
“You need to go to jail, Hayward!” These were the loud words heard moments before the publicly accused CEO of BP, Tony Hayward, began his validations before the US Congress’ Energy and Commerce Subcommittee on Oversight and Investigations in Washington on June 18, 2010. The heckler was a woman, with black tar smeared all over her hands and face. She was angered at the BP Chief for the oil spill at the company’s Macondo project deepwater rig in the Gulf of Mexico – the very reason which caused BP’s shareholders to lose $93.4 billion in just 59 days, also considered the most ignominious retreat by any non-banking & financial stock within a span of two months! The cynic was hurriedly removed from the room. Given a chance, many say BP’s shareholders would have done the same to Hayward.
But Hayward didn’t budge during the seven hour-long humiliation session, during which, the beleaguered executive was found to be at his diplomatic best, making his way clean around all the queries. [He used lines like “I don’t know”, “I am not comfortable answering...” and “I was not in the decision making process” about 70 times during the session!] Quite a contrast to the manner in which the four CEOs of Exxon, Conoco Phillips, Shell and Chevron unanimously agreed to the Congress in the same meeting that the prime reason for the BP disaster was the company’s failure to implement industry best practices during the Macondo operation. BP used six centralisers, while Halliburton (BP’s cement contractor), had advised it to use 21 to prevent proper and safe channelling during the cement process. BP also did not test the cement, which gave way under the high water pressure, 5000 feet below the surface. The engineers ignored the need to circulate gas-bearing muds out of the well and to secure the wellhead with a lockdown sleeve before allowing pressure on the seal from below. In short – it opted for lower costs over safety. But Hayward was not broken.
The US Congress members however left home satisfied. They had made up their minds before they walked in. No matter what Hayward replied, they were prepared to leave with much the same opinion. The BP chief was placed there to act out a soliloquy on a ‘high-gentry’ stage, where the script was designed to humiliate the might of a British company, which two months back was the second-most valued oil company in the world with an Mcap of $188.32 billion (only behind Exxon, the most valued in the world today)! Hayward on the other hand had reasons for much discomfort.
“You need to go to jail, Hayward!” These were the loud words heard moments before the publicly accused CEO of BP, Tony Hayward, began his validations before the US Congress’ Energy and Commerce Subcommittee on Oversight and Investigations in Washington on June 18, 2010. The heckler was a woman, with black tar smeared all over her hands and face. She was angered at the BP Chief for the oil spill at the company’s Macondo project deepwater rig in the Gulf of Mexico – the very reason which caused BP’s shareholders to lose $93.4 billion in just 59 days, also considered the most ignominious retreat by any non-banking & financial stock within a span of two months! The cynic was hurriedly removed from the room. Given a chance, many say BP’s shareholders would have done the same to Hayward.
But Hayward didn’t budge during the seven hour-long humiliation session, during which, the beleaguered executive was found to be at his diplomatic best, making his way clean around all the queries. [He used lines like “I don’t know”, “I am not comfortable answering...” and “I was not in the decision making process” about 70 times during the session!] Quite a contrast to the manner in which the four CEOs of Exxon, Conoco Phillips, Shell and Chevron unanimously agreed to the Congress in the same meeting that the prime reason for the BP disaster was the company’s failure to implement industry best practices during the Macondo operation. BP used six centralisers, while Halliburton (BP’s cement contractor), had advised it to use 21 to prevent proper and safe channelling during the cement process. BP also did not test the cement, which gave way under the high water pressure, 5000 feet below the surface. The engineers ignored the need to circulate gas-bearing muds out of the well and to secure the wellhead with a lockdown sleeve before allowing pressure on the seal from below. In short – it opted for lower costs over safety. But Hayward was not broken.
The US Congress members however left home satisfied. They had made up their minds before they walked in. No matter what Hayward replied, they were prepared to leave with much the same opinion. The BP chief was placed there to act out a soliloquy on a ‘high-gentry’ stage, where the script was designed to humiliate the might of a British company, which two months back was the second-most valued oil company in the world with an Mcap of $188.32 billion (only behind Exxon, the most valued in the world today)! Hayward on the other hand had reasons for much discomfort.
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
2012 : DNA National B-School Survey 2012An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
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