BP have their AGM today. As Upstream Online reports:
One BP shareholder questioned whether [CEO Robert] Dudley was the right man to lead the company through its current travails in Russia, claiming he was “tarnished by the TNK-BP involvement” and was effectively “a refugee from Russia”.
His question is valid, although I disagree with the reasons for his asking it. As Dudley said, and the article covers, this isn’t personal. However, BP are blundering about in a place where doing business requires having your wits about you, and Dudley seems to have been taken completely surprise by this turn of events and without a clue as to where to go from here.
There appear to be three possibilities for what’s happened:
1. Dudley was not aware that BP should have discussed the Rosneft deal with their TNK-BP partners, the consortia AAR, in which case he is hopelessly ill-informed bordering on incompetent.
2: BP deliberately bypassed AAR assuming they would not object to the deal with Rosneft, which would make Dudley hopelessly ill-informed bordering on incompetent.
3. BP deliberately bypassed AAR assuming Rosneft or Kremlin heavies would lean on AAR to drop any objections. This would make Dudley complicit in unethical behaviour which not only undermines the standing of his own company (kind of hard to complain about rough treatment in future, eh?), but also compromises the whole industry. Western companies are supposed to come to Russia to set and example and show everyone how it’s done, not engage in thuggery.
I suspect that No. 3 is the more likely, BP having in my opinion approached the deal from a position of desperation. But if any of the above are true, then Dudley is not fit for the job and needs to go.
Let’s remind ourselves that his predecessor, the hapless Tony Hayward, was sacked for not being media savvy enough during the Macondo well blowout, even though he probably had the qualities and skills to run the company under normal circumstances. If Hayward was not merely a scapegoat and the BP board genuinely thought he was not fit for the job and was doing the company harm, what on earth must they make of Dudley?
The Macondo well blowout cost BP somewhere in the region of $30bn. I wonder how much this latest episode is going to cost them in the long run?