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The Wall Street Journal: Beyond PR at BP

January 16, 2007; Page A20

Don’t expect much sympathy for John Browne now that his tenure as chief executive of BP has been cut short by 17 months. Sorrow certainly wasn’t the sentiment expressed by investors, who have sent BP shares up more than 2.2% in London and nearly 5% on Wall Street since Friday’s announcement that Lord Browne would leave the oil giant this summer rather than at the end of next year.

Big Oil is one of the most vilified industries among politicians and the press, many of whom would have you believe that running these companies involves little more than deciding how badly to “gouge” gasoline consumers after hurricanes. Lord Browne is paying the price for BP’s struggles in recent years, most notably an explosion at a Texas refinery that killed 15 workers, oil spills in Alaska and alleged market manipulation in the U.S.

Then again, Lord Browne didn’t help himself by trying to persuade the world that British Petroleum wasn’t in the oil biz. In 2000, BP launched its $200 million “Beyond Petroleum” campaign to reshape its image, running ads that shifted emphasis from oil and gasoline to more politically correct fuels. The company is spending $8 billion over 10 years to boost its alternative fuels business.

Yet at about the same time BP embarked on a plan to cut costs at all of its refineries by 25%, according to investigators with the U.S. Chemical Safety Board who are looking into the 2005 Texas City refinery accident. That cost-cutting, the CSB says, undermined routine maintenance that might have prevented the blast. BP has denied the link between cost-cutting and safety, including oil leaks from corroded pipelines. But a report due to be released today by former Secretary of State James Baker is expected to echo these concerns.

Contrast BP’s record with that of ExxonMobil, which has been demonized even more than other oil majors for refusing to toe the environmentalist line on climate change. Yet over the past decade it has largely avoided the kinds of troubles that have socked BP. Companies must be free to reduce expenses, and it’s impossible to say whether BP shifted too much money from maintenance to PR. What is clear is that BP’s shareholders don’t like receiving news of an oil spill any more than environmentalists do. An oil company’s first obligation is to its oil business. and its sister websites,,,,, and are all owned by John Donovan. There is also a Wikipedia article.

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