The energy industry continues to pore over the shake-up to BP’s safety division, which was announced yesterday, just two days before Bob Dudley takes over as chief executive.
Several, including our energy editor Sylvia Pfeifer, point out Dudley’s focus on safety is hardly revolutionary – Tony Hayward made very similar noises when he took over. Over at Fuel Fix, however, they point to a happier precedent – Exxon’s largely successful attempts to improve its record following the Exxon-Valdez accident.
Want £100,000? All you have to do is come up with a way of getting engineers and equipment out to the wind farms of the future.
Except it’s not quite as simple as that. While wind farms today are located typically less than 20km from the shore, the next generation of farms could be as far out as 300km, where waves can reach three metres high.
In conditions such as those, transporting workers and equipment out to the farms themselves is pretty difficult, and we’re not just talking about the seasickness that traditionally accompanies such trips.
There is something of a clean up (if you’ll forgive the pun) going on at BP.
Yesterday the company sold $3.5bn worth of bonds, with demand high and the 5-year tranche being priced at a respectable (if sector-lagging) 195 bps over US Treasuries. The renewed confidence from the credit markets has helped the cost of default protection on its debt fall to 191bps from a high of 614bps in June.
Then today, Robert Dudley made his first personnel change before becoming CEO on Friday, putting Mark Bly, the UK head of safety, in charge of a new souped-up safety and risk division, and announcing plans to split the exploration business into three. The company said that change would lead to the departure of Andy Inglis, the head of exploration, by the end of the year.
It’s a return to business as usual for BP. The UK oil group is raising $3.5bn in its first bond sale since the Deepwater Horizon accident in the Gulf of Mexico on April. The company’s last significant sale was last August when it raised $2bn.
The sale comes just days before Bob Dudley takes over as chief executive of the UK oil group. He faces a daunting in-tray, including cleaning up the oil spill, repairing the company’s reputation in the US, setting out a new strategy for BP and ensuring it does not fall victim to rivals like Exxon.
Among Mr Dudley’s most difficult internal challenges will be tackling “Fortress E&P”, the company’s powerful exploration and production division which is regarded internally as a semi-autonomous unit.
The James A Baker III Institute for Public Policy released a major study yesterday on the consequences of an emerging US carbon management policy. There are lots of strands in the report to be picked over. The one I found most interesting was that electric cars hold greater promise than establishing a national Renewable Portfolio Standard (RPS) in reducing carbon emissions and lowering US oil imports. This is from the report:
The single most effective way to reduce US oil demand and foreign imports would be an aggressive campaign to launch electric vehicles into the automotive fleet. In fact, mandating that 30 per cent of all vehicles be electric by 2050 would both reduce US oil use by 2.5m barrels a day beyond the 3m barrels-per-day savings already expected from new corporate average fuel efficiency standards, and also cut emissions by 7 per cent, while the proposed national renewable porfolio standard would cut them by only 4 per cent over the same time.
This finding underlines the potential for the US to make good use of its natural gas boom to supply this growth in electricity usage.