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The Anchorage Daily News: Public image priority for BP

CAMPAIGN: Oil giant has spread its wealth to rebuild reputation tainted in 2006.

By WESLEY LOY
[email protected]

Published: July 8, 2007
Last Modified: July 8, 2007 at 12:24 AM

Have you noticed? BP is on a PR offensive.

The London-based oil titan, the most important company operating in Alaska, in recent weeks has been holding receptions and barbecues, handing out money for Little League teams and running newspaper ads across the state touting “our strong relationship with the people of Alaska.”

The campaign comes in the wake of a dreadful 2006 for BP, which runs Prudhoe Bay, the nation’s largest oil field.

Corroded pipelines broke, leaving a record 201,000-gallon oil spill on the North Slope tundra and forcing the company to partially shut down the field. Members of Congress as well as state and federal regulators ripped the company for lax pipeline maintenance, and investigations continue — including one by a federal grand jury.

Now, as BP rebuilds a key pipeline network within Prudhoe under a new Alaska president, new worries loom. State legislators might meet later this year to raise oil taxes for the second straight year. And BP and the state’s other major oil companies, Exxon Mobil and Conoco Phillips, are under pressure to go along with popular Gov. Sarah Palin’s plan for a natural gas pipeline — a plan they denounced last spring.

Spokesmen for BP — people who helped craft the public relations push — acknowledge last year was a rough one for BP.

“It’s pretty obvious our reputation took a hit,” said Phil Cochrane, Alaska vice president of external affairs.

But Cochrane and BP’s press spokesman, Daren Beaudo, contend the increased PR wasn’t directly, or solely, a result of last year’s fumbles. Rather, they say it’s an effort to open up more after several years of BP focusing more inwardly on its business operations — and on eliminating costs such as corporate image ads.

“We had to come out of this period of deep introspection and become more active and engaged,” Beaudo said. “We went silent.”

COURTING ALASKANS

Well, BP never was entirely silent.

Under an agreement with the state, the company annually contributes millions to the state university, charities and other organizations. It sponsors a Teacher of the Year award. You can see trash bags emblazoned with the BP emblem on the side of local highways during cleanup drives. And BP has sometimes advertised aggressively on specific issues such as tax changes.

But lately, the company has amped up its public voice.

Over the past few months, BP has:

• Held parties, barbecues and picnics around the state touting the 30th anniversary of the Prudhoe Bay field startup on June 20, 1977. Conservative radio talk show host Rick Rydell presided over the biggest event, a VIP reception June 20 at the Anchorage Museum at Rasmuson Center.

• Begun a summer “road show,” staffing booths at fairs, festivals and other events such as last week’s Mount Marathon footrace in Seward. College kids are handing out BP literature and knickknacks.

• Pledged $2 million over two years to a new cancer center at Providence Alaska Medical Center.

• Kicked off a new program where employees can get up to $800 a year for local youth sports or academic teams and clubs. Since the program began in May, at least 42 BP employees have signed up for grants, Beaudo said.

• Run large ads in newspapers across the state, many of them cast as personal messages from BP Alaska president Doug Suttles. The ads tout Prudhoe’s 11 billion barrels of production so far, BP’s work to replace corroded pipelines, the company’s recent hiring spree and its intent to stay in Alaska for 50 more years.

“The future of Alaska is important to all of us,” says one ad signed by Suttles. “Both of my kids were born here, so it’s their future too.”

The ads are running not only in the state’s metro newspapers, but in Bush weeklies such as The Delta Discovery of Bethel.

“It helps our paper out a lot,” said Kelly Lincoln, the office manager, who said she and her husband, publisher and editor Greg Lincoln, were delighted to get three full-page color ads from BP.

BUYING BACK ITS IMAGE

The BP spokesmen wouldn’t say how much the company is spending on the advertising and other outreach.

BP is far from alone in its PR campaign. Conoco and other major companies operating in Alaska long have run image ads, sponsored concerts and distributed money to good causes.

Jeri Rubin, a University of Alaska Anchorage business professor, sees nothing insidious about what BP is doing.

“The purpose of corporate advertising is to build goodwill,” she said. “That’s exactly what they’re doing.”

BP wants to be on good terms not only with its customers, but with regulators, politicians and ordinary voting Alaskans, Rubin said. So the ads, the giving, the appearances at fairs all are smart moves.

“All those factors do contribute to improving how we think about BP, and ultimately it will increase their bottom line, in numerous ways,” she said.

Paul Laird, a former BP spokesman who now runs The Alliance, an association of oil field contractors, said BP’s recent PR push marks a modest return to the days in the 1990s when the company mounted expensive and sometimes bold image ad campaigns, and not just in print but on television — something BP isn’t currently doing.

In one campaign in 1991, BP spent nearly $200,000 on a series of TV ads featuring a Los Angeles comic wandering around the Slope, cracking jokes with oil field workers about such serious subjects as spill cleanup, recycling and local hiring.

In the late 1990s, oil prices plunged and BP began to tighten its business as North Slope oil production fell, Laird said.

“The whole industry, for several years starting in the early 2000s, went a little overboard on cutting back on its PR and promotions,” he said. “As a result, the goodwill bank got drawn down to just about zero.”

In Laird’s view, that didn’t position the industry well for crucial debates such as last year’s oil tax hike in Juneau, and this spring’s easy passage of the governor’s Alaska Gasline Inducement Act, which the big three oil companies don’t like.

SURGING PROFITS

Cochrane and Beaudo cite a 2004 survey conducted for BP by a Juneau-based consulting firm, the McDowell Group, that found many people feared BP’s lower profile meant the company, its payroll and huge annual capital budget was about to bug out of Alaska.

In the survey, one employee observed, “We’ve crawled back into our shell.” And a government official said: “It’s a lot easier to tax somebody who’s not in the room. People don’t like companies that are not being friendly and involved in the community.”

One big change for BP is the arrival of Suttles, who replaced Steve Marshall as president in January, following last year’s pipeline leaks and Prudhoe shutdown. Suttles enjoys entertaining more, Beaudo said.

Another major change is the extraordinary run-up in oil prices, which has more than offset the steady decline in North Slope production. Despite its troubles in the field, BP’s Alaska unit notched a profit of $2.1 billion last year.

BP is pushing toward a 2,000-person payroll, a 50 percent jump in its ranks from two years ago. And it obviously has the money for a little PR.

“This is not about telling you how great we are,” Cochrane summed up. “This is about us telling you what we’re doing and you draw your own conclusions.”

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