BP back from the brink of €55bn Deepwater disaster
After the near collapse of his company following the 2010 Gulf of Mexico disaster and a three-year slump in oil prices, BP chief executive Bob Dudley is hardly relaxed.
“It doesn’t feel like we are in a serene time for any energy company,” Dudley told Reuters in an interview. BP is stronger today than at any other time since the 2010 Deepwater Horizon rig accident. With oil prices at their highest since late 2014 and BP shares back to levels not seen in more than eight years, it is once again in a position to contemplate boosting dividends and acquiring, Dudley said.
For BP, it is a two-speed race. The 110-year old company is undergoing its fastest growth in recent history with new oil and gas fields from Egypt and Oman to the Gulf of Mexico, riding a tide of higher oil prices following the 2014 downturn. It is paying off over $65bn (€55.2bn) in penalties and clean-up costs for the Deepwater Horizon accident which left 10 employees dead.
Regarding the danger of the company going bankrupt at the time, Dudley said: “The worst moment was when I heard that our debt was untradable back in the summer of 2010. To me that was a moment of the unthinkable was possible.”
Longer-term challenges also loom. BP, like rivals such as Royal Dutch Shell, is betting on natural gas, the least polluting hydrocarbon, to sustain an expected surge in demand for electricity as economies grow and transportation is electrified. Gas is also playing a key role as a back-up to renewable energy such as wind and solar in power generation. Gas already accounts for over 55% of its production.
In the early 2000s BP introduced the slogan ‘Beyond Petroleum’ and adopted a sunburst logo after launching an $8bn expansion into renewables. The company was forced to write off its solar business 10 years later, but still retains a large US onshore wind business and biofuels plants.
Now, Dudley is taking a cautious approach, investing in smaller start-up companies in renewables, clean fuels and battery-charging docks. “If a shareholder or someone else came to BP tomorrow and said here is $10bn to invest in low-carbon energies for us, we would not know how to do that yet.” Now, Dudley is taking a cautious approach, investing in smaller start-up companies in renewables, clean fuels and battery charging docks.
Dudley, whose €11.48m pay package was approved by shareholders yesterday, sits on the board of Rosneft. BP has a near 20% stake in Rosneft and where it draws a third of its production. “We don’t apologise for doing business in Russia,” said Dudley.
