FT reports that some investors were not surprised by the deadly Gulf disaster. They’ve expected it and stayed away from the stock:
One UK investor said that he had already started building a holding - for the first time in years - “We have not held BP shares up to now because of its safety record and its business model. We worried that the capex and risks would go up and up as it tried to replace assets by finding wells in increasingly inaccessible spots round the world. That is what happened. But now the shares have fallen so far that the market cap has halved. If the escrow fund is adequate, $20bn against the value of BP assets is minimal.”
So, how come a company so famous for its terrible safety record almost received a safety award? Because, argues James Ridgeway, it covered itself in GREEN and became the darling of the climate change crowd:
For the last decade, BP has been busily engaged in a multi-million dollar greenwashing campaign. Changing its name from British Petroleum to just BP, the company adopted a new slogan, “Beyond Petroleum,” and began a “rebranding” effort to depict itself as a public-spirited, environmentally sensitive, green energy enterprise, the very model of 21st century corporate responsibility. . . .Even before the Deepwater Horizon disaster, BP’s green image was nothing more than a scam. While making miniscule investments in things like solar power, biofuels, and carbon fuel cells that backed its PR claims, BP continued to work relentlessly to expand its oil and gas operations. In the last decade, the world’s second largest producer of fossil fuels, the company drilled (and spilled) vast quantities of oil and gas on Alaska’s North Slope and in the North Sea. It positioned itself to rip up Canada’s tar sands to extract its dirty oil, and grabbed a 50 percent interest in Iraq’s rich Rumaila oil field. BP boasted the highest number of explosions and other accidents at its U.S. refineries (several of them deadly), and made the Multinational Monitor’s 10 Worst Companies lists in 2000 and 2005, based on its environmental and human rights record.
But BP clearly believed that green was in the eye of the beholder. The company’s move toward green marketing began in 1997, when it quit the industry’s climate change denial group, the Global Climate Coalition, and acknowledged a possible link between global warming and the use of fossil fuels. By 2000, the vertically integrated multinational—which explores, extracts, transports, refines, and sell fuels through its myriad gas stations–had bought up Amoco, Arco, and Burmah Castrol. It united them under the BP brand with a feel-good flowering sun logo, and hired the advertising firm of Ogilvy & Mathers to launch a $200 million rebranding campaign.
The gimmicks appeared to work. In 2001, BP had already been chosen as the “company that does most to protect the environment” in a survey by the Financial Times that polled not only corporate executives but also activist groups and the media. “There appears to be near consensus,” the paper reported, that BP “has made exceptional efforts to replenish environmental resources, develop alternative fuels and communicate with stakeholders.” As for the general public, a 2007 “green brands survey” found that BP was perceived as more green than any of the other petroleum companies, and also headed the list of companies that had “become more green” in the previous five years.
The Gulf of Mexico is still under a drilling moratorium after the BP oil spill but plans to step up deep-water exploration on the other side of the world, in the South China Sea, remain largely unchanged. . . .“Offshore and especially deep-water oil and gas discoveries have great significance for replenishing China’s and the world’s oil resources,” said Zhou Shouwei, CNOOC vice-president, in comments posted on the company’s website on June 10.
“We can’t cancel or stop deep-water oil and gas extraction because of the accident in the Gulf of Mexico.”
China’s potential offshore reserves account for between a quarter and a third of the country’s hydrocarbon resources. . . .
currents are pretty strong in the South China Sea.”
Mr Wu said the BP disaster would not discourage China’s deep-water ambitions.
“I think the BP accident is actually a good alert to the Chinese players and also the international players in China. Everyone now realises that safety is more important than anything else … I don’t think BP’s accident will be driving anyone away from China deep water.”