Dudley faces testing BP AGM

Thursday morning sees Bob Dudley’s first AGM as BP chief executive, and it is not the one he would have planned.

After taking charge last year in the wake of the Gulf of Mexico spill, the new BP CEO initially won plaudits for his plan to overhaul the company’s safety procedures.

Then came his big eye-catching move, the deal that could seal his reputation as CEO. His plan for a $16bn share swap with Rosneft would open up the Russian arctic for exploration and provide an source of revenues that could rival the North Sea.

Of course, he knew the deal was likely to anger his partners in TNK-BP, the company’s other Russian venture. But with Vladimir Putin on board, Mr Dudley could have thought that the deal was tied up.

However, Russian politics is a complicated business. Soon after President Medvedev ordered a purge of Russian politicians at the top of businesses, Igor Sechin stepped down as chairman of Rosneft. Mr Sechin was Mr Dudley’s key ally in the deal, and one of his most important links to prime minister Putin.

Now, with British courts blocking the Rosneft deal over claims it could violate BP’s agreement with the Russians in TNK-BP, shareholders will have a lot of questions for Mr Dudley. Will BP’s agreement to a one-month extension to the share swap provide enough cover for Mr Dudley in the face of shareholder frustration?

Even worse for the CEO, reports are beginning to surface that BP’s clean-up operation in the Gulf has not gone as well as planned, with tar balls still washing up on American beaches.

Given Mr Dudley’s ongoing commitment to drilling in the US, this could be even worse for the company’s strategy than the Russian problems.

Some shareholders are becoming disillusioned: some big US investors have vowed to vote against the company’s accounts altogether.

Mr Dudley will have to pull something impressive out of the bag in London’s Excel centre on Thursday morning to win back their support: hardly the position he wanted to be in less than a year into his tenure.

Here on Energy Source, we will be bringing you all the news and views from the AGM as it happens. Keep your eyes on the blog.

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