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Daily Telegraph: Revealed: Browne backed Shell tie-up

Lord Browne BP Shell merger plan

(Lord Browne planned to invite Shell to join him at the big table)

By Christopher Hope and Andrew Pierce
Last Updated: 1:21am GMT 22/01/2007

Lord Browne of Madingley, chief executive of BP, decided to quit the oil company after a year which saw his hopes for a £220bn merger with Shell frustrated and his plans for staying on for another five years rejected by the board.

The longstanding chief executive announced 10 days ago his surprise decision to leave BP this summer.
However the reason for Lord Browne’s unexpectedly early departure can be traced back 12 months to the bold plans to merge with Shell to create a £220bn oil giant. The merger was discussed informally and papers were produced by BP into the viability of the merger. Lord Browne would have stayed on as chief executive, possibly with a Shell director as chairman.

One source close to the events said: “Browne tried to buy time by saying that he had one big deal left in him. The big deal was the plan to merge BP with Shell.” But the plan was never put to Shell nor formally to BP’s board.

It was finally dropped because of competition stumbling blocks, not least the number of petrol stations controlled by the combined business. The oil price was also too high to justify the deal. Months later, Lord Browne lost a battle to stay on as BP chief executive after he reached the company’s official retirement age of 60 in February 2008.

Lord Browne had told his board, led by chairman Peter Sutherland, that he wanted to stay for another four to five years. However the other directors were concerned that if Lord Browne stayed on then some of the internal candidates who were hoping to succeed him as chief executive would leave. As a result, the directors decided that Lord Browne should go.

Although he was due to go next February, he was given until the end of December 2008, BP’s centenary year. The board then commenced an “aggressive succession programme” to identify swiftly the man who would fill Lord Browne’s shoes.

All five internal candidates for Lord Browne’s job – Iain Conn, John Manzoni, Tony Haywood, Bob Dudley and Andy Inglis – were interviewed by four BP directors for several hours each. By Christmas, the directors had chosen Tony Haywood, the head of exploration and production, to be the next chief executive of BP.

Lord Browne, while not being part of the process, knew that BP had found his successor 25 months before he was due to leave at the end of 2008.

Shortly afterwards, during a holiday in the West Indies, Lord Browne decided that it was time to quit. He told Mr Sutherland about his plans a week last Tuesday.

The board was informed at a scheduled meeting the next day that Lord Browne was leaving in the summer. Plans to appoint Mr Hayward as chief operating officer were scrapped. Instead, Mr Hayward, head of exploration and production, would be made chief executive designate.

The decision was rubber-stamped at another hastily arranged board meeting three days later on Friday, and was announced to a stunned Stock Market at 4pm.

The era of the most successful British businessman of his generation, dubbed “the Sun King” by admirers, was over.;jsessionid=CDUDUZ251QVPRQFIQMFCFGGAVCBQYIV0?xml=/money/2007/01/22/cnbp22.xml and its sister websites,,,,, and are all owned by John Donovan. There is also a Wikipedia article.

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