16 September 2006
As a measure of value, it is pretty clumsy. But it shows how far the stock of BP has fallen in the eyes of the City. Shell, which only two years ago was ravaged by its own reserves scandal, is now a bigger company than its arch rival.
Admittedly, there isn’t much in it (Shell’s Ł114bn against BP’s Ł113bn), but this measure matters to the inhabitants at BP’s plush St James’ Square offices as much as it matters to the fund managers who met at the Association of British Insurers on Monday.
The oil giant and its highly rated chief executive Lord Browne have had a torrid two months. Lord Browne spent the end of July in a rather too public spat with his chairman Peter Sutherland about when he should retire (he eventually won a 10 month extension until the end of 2008), and then in August he had to cope with oil spills from a key pipeline in Canada. If you add in the catastrophic Texas City blast and three US regulatory probes, then there is feeling of crisis surrounding BP.
Individually these events would not damage BP. But the culmination of all these pin-pricks is having a negative effect on BP’s shares. And its big investors are worried.
If Lord Browne was hoping for a gentle run-in to his retirement, he was sorely mistaken.