Friday, 18 June 2010

BP and Oil

The BP Oil disaster has been badly mishandled by all concerned. President Obama's personal attacks on Tony Hayward were not warranted. I have had interactions with Tony and heard him recently at our Business Forum in Port of Spain. He takes corporate social responsibility very seriously. However most people think that BP's initial reaction was not well thought out, Tony Haywood's gaffes about wanting his life back were not appreciated in the US. This has led to greater than was necessary pressure on the Oil Company. It is a good sign that BP has now agreed to suspend its dividend payments this year, and will instead pay into a compensation fund for those affected. This news has been met with a rise, the first since the crisis began, in BP's oil price. BP needs to reflect on whether its existing CSR policy is sufficient, or whether it was badly implemented in this situation.

BP's interaction with the US Government have not been well handled, neither the Company nor the President are currently considered to have handled the situation well. The company's initial reaction angered the American public and resulted in strong statements from the White House. The Presidents desire to 'kick some arse' was not good for the Company's share price. Tony Haywood faces congress this week in an exchange that is not going to be good for the Company's image. The Line taken by the US government in this crisis appears to disregard that BP is jointly listed in the US and London with nearly 30% of its shareholders based in America.

The Company's apparent lack of preparation for this disaster has left the BP open to criticism. All energy companies, including BP, need to invest more time and money in R&D to help prevent accidents of these types and have better plans in place to deal with the consequences of inevitable failures. On a similar note a renewed focus on developing alternative energy solutions would make drilling for oil in these difficult and dangerous locations unnecessary altogether.

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