© The Financial Times Ltd 2014 FT and 'Financial Times' are trademarks of The Financial Times Ltd.
As the big guns of the oil industry gather in London this week for International Petroleum week, talk has been largely of two things: the effect of Middle East unrest on the oil price and how to improve its reputation, especially after Macondo.
I have just sat through a session entitled: “Restoring the industry’s licence to operate in the face of increasing public and political scrutiny”.
In it, Andrew Griffin, CEO of a PR company called Regester Larkin, explained how the Macondo spill showed that the oil industry needed to do more to explain its importance to the public. This, he said, would help protect companies’ reputations in the case of an accident or other negative event.
Following hard on the heels In Too Deep: BP and the drilling race that took it down, a book by two Bloomberg reporters, which was launched last night, comes an in-depth report by Fortune magazine.
The Fortune piece finds much the same as the book (review to follow) – the focus on risky new discoveries coupled with corporate cost-cutting that characterised the company under both John Browne and Tony Hayward helped foster an environment where such an accident could happen.
The Fortune piece focuses on one thing in particular: the way in which company bosses focused on personal safety rules for staff at the expense of process rules for avoid major industrial accidents.
If anybody understands the difficulties of doing business in Russia it is BP chief executive Bob Dudley. in 2008, as head of the TNK-BP joint venture he had to flee the country in a bitter dispute with BP’s Russian partners.
So why is he now upping the ante - expanding its commitment to Russia with a separate $16bn tie-up with Rosneft, the state-controlled oil group? The answer is oil – the Arctic reserves at the heart of the deal could for the embattled group be a new North Sea.
Oil companies have to go where the oil is. And there is plenty of oil in Russia.
Now we’ve all had a day to digest the 300+ pages of the National Commission’s report into the BP oil spill, it’s worth taking a look at what the reaction has been from the wise old heads of the print and online media.
First up, the FT’s Sylvia Pfeifer points out how badly US regulation compares to that in other countries:
One of the most damning conclusions of the national commission report was that other countries with strong offshore oil industries, including Britain and Norway, had better regulatory systems than the US.
Where the US Minerals Management Service was clearly not fit for purpose, other countries – often prompted by their own offshore disasters – have put in place regulations that seem to have been more effective at preventing fatal accidents.
The US oil and gas industry feels slighted by the fact that the presidential oil commission’s report raises questions about the safety of deepwater drilling generally. Speaking for the industry is the American Petroleum Institute, which represents more than 400 oil and gas companies:
The industry has already taken significant action to futher improve safety in offshore operations, consistent with the recommendations of the presidential commission on last summer’s oil spill.
As we saw from Ed’s list of the main recommendations from the National Commission into the BP oil spill, they were pretty much what we were expecting from the overnight reports. But a few interesting pieces of information arose from the press conference.
Here, in no particular order, is what we learned:
Here is the list of the National Commission’s main recommendations following the BP oil spill.
Much of this was leaked this morning.
The National Commission looking into the BP oil spill will present its final report on Tuesday at 3pm GMT (you can watch it live here). So what can we expect it to find?
As far as blame goes, we know most of that thanks to the release of one of the chapters last week. The commission will spread the blame among BP, Transocean, Halliburton, and to an extent, regulators. The news came as a relief to BP investors, who have sent the stock over six per cent higher since the news broke.
So what we will hear today is some indication of the longer-term effect of the spill on policy and regulations.