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Financial Times: New chief executive enters Total disaster zone

By Paul Betts
Published: February 9 2007 02:00 | Last updated: February 9 2007 02:00

Big oil has always suffered from an image problem – from the wildcat entrepreneurs of the early 20th century to the robber barons who gave rise to the Seven Sisters cartel. Now the industry, flush with money from high oil prices, is going through another of its reputational crises.

BP has lost its chairman as well as its environmentally friendly image prematurely. Royal Dutch Shell has been struggling to repair the damage from misleading investors over the true level of its reserves. But these days it seems to be Total’s turn to be perceived – at least in France – as the industry’s bad boy.

Next week starts the long-awaited trial of the Erika spill that the French oil company acknowledges has been a communications disaster on its part. The environmental catastrophe goes back seven years but remains fresh in the French public’s mind.

At the same time, Total still faces criticism and legal proceedings over a huge gas explosion at a chemicals plant in Toulouse six years ago. All this as Christophe de Margerie takes over next week as chief executive and is already the subject of embarrassing investigations of alleged corruption in Iraq, Iran and Cameroon.

The oil major, the eurozone’s biggest group by value, is also France’s least loved blue chip company, according to recent opinion polls. This is hardly surprising. The fact that the group is facing all these investigations combined with its formidable profit generation has led public opinion to regard it as a company that puts money above everything else.

The challenge for its new chief executive will be to repair this image. But this could prove a Herculean task for Mr Margerie, who will remain under the cloud of investigations that could take years to resolve.

Copyright The Financial Times Limited 2007

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