BP CEO Bob Dudley Ignores History and Bashes the Media, but Pay Attention Anyway
BP CEO Bob Dudley is getting lots of attention for his speech today to business leaders in the UK, largely because he accused the media and some of his Big Oil industry rivals of fear-mongering and what he called a "great rush to judgment" in the wake of the Gulf oil spill. But Dudley said some other stuff that's worth highlighting, from BP's future in the U.S. and deepwater drilling to the company's views on global oil demand and who Dudley has turned to for advice.
On the media:
Over 87 days as the oil kept flowing into the ocean, it frequently felt as if we were the only story on the news, 24/7. I have seen figures that in some months fully 30 percent of the 24-hour news coverage was devoted to the incident.It's true, the media coverage was intense and at times, especially on cable news and some websites, the conspiracy theories flourished. But Dudley either fails to understand or is trying to deflect attention away from BP's contribution to the media frenzy. BP's insistence (abetted by some federal agencies) that the the spill was far smaller -- 5,000 barrels a day -- than it actually was certainly did little to bolster its credibility. Scientists later confirmed what the rest of us believed from watching the underwater video footage of the spill site: It was significantly bigger. Scientists determined some 4.9 million barrels were spilled in all and the daily spill rate ranged between 35,000 to 60,000 barrels a day.I recall registering two particularly vivid sensations from this period. First, an overwhelming public sense on frustration over the failure of efforts to stop the flow, visible in real-time TV. And second, a great rush to judgment by a fair number of observers before the full facts could possibly be known.
This single action early on in the Gulf disaster laid the groundwork for what was to come. In short, the trust was gone and the questions mounted. Lest we forget, the media exposed a number of BP problems along the way, including employee contracts for out-of-work fishermen that included legal waivers and its questionable relationship with local law enforcement to keep the media from accessing certain oil-soaked areas.
Who is helping BP?
Interestingly, Dudley said he has turned to other high-hazard industries, namely chemical and nuclear, in recent weeks for advice on how to improve safety and more effectively manage risk. The decision is a smart one. BP isn't exactly part of the inner Big Oil circle at the moment. Rivals such as Chevron (CVX) and Exxon (XOM) have openly criticized BP since the Gulf of Mexico oil spill and would likely relish the opportunity to tell the world about their effort to "educate" BP.
Strategy aside, Dudley's decision to seek advice elsewhere signals he is not only serious about improving safety, but that he's taking a holistic approach to the subject and not just focusing on eliminating deepwater drilling hazards.
On BP's future in the U.S. and its relationship with the feds and Americans:
Contrary to what is sometimes said, BP is not widely seen over there as "British Petroleum," we're part of the American community.The single most honest assessment on the demand for (and supply of) fossil fuels:I believe it would be fair to say that BP now has more points of contact across the U.S. government than any other country.
I can promise you that I did not become chief executive of BP in order to walk away from the U.S. BP will not be quitting America. There is too much at stake, both for BP and the U.S.
To be clear, Dudley never says the world is running out of oil. But his rather candid comments on deepwater drilling and risk in general provide insight into the world's need for fossil fuels.
By 2030, it is estimated that the world could be consuming as much as 40 percent more energy than today, thanks largely to growth and urbanization in the emerging markets. This will require investments of $25 to $30 trillion -- more than $1 trillion per year for the next 20 years.Dudley spoke at length about why improving safety in the Gulf is crucial, hint: because we need the oil. He also argued that if BP and others truly learned something from the Gulf oil spill, there was no need to close off the deepwater as an area of future oil exploration and production. Soon after, Dudley made the single most honest comment about our need for oil and the increasing difficulty -- political, technological or otherwise -- of reaching it.The deep waters are becoming an increasingly important source of energy to fuel the global economy. They account for around 7 percent of total oil supplies now, growing to a projected 9 percent in 2020.
There are difficult balances to strike, but we cannot afford to shy away from risk.Photo of Bob Dudley from BP
For complete coverage, see All Things BNET on BP's Gulf of Mexico Spill
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