BAD MONTH FOR BP AND ITS CHIEF EXECUTIVE

by RAY FLEMING
AUGUST has not been kind to British Petroleum and its chief executive Lord Browne of Mandingley. It has proved that, like a week in politics, a month can be a long time in business. In July BP's shareholders were complaining that so able an operator as John Browne should not have to stand down automatically in 2008 when he reached the company's retirement age of 60. But Lord Browne relunctantly accepted that he would have to abide by company rules like everyone else. The irony, of course, is that if the retirement issue had come up just a few weeks later shareholders and others might have been enquiring whether Lord Browne could leave sooner rather than later. In short order BP has been hit by a succession of embarrassing events and accusations. First came news of serious pipeline spills due to corrosion at its Prudhoe Bay oilfield in Alaska. Next a US state judge ruled that Lord Browne would have to appear in court and testify personally about 15 deaths and many injuries resulting from a fire at BP's Texas City refinery last year. And this week the US commodity futures trading commission (CFTC) has sent subpoenas to the company as part of an inquiry into alleged insider trading in the oil and gasoline markets in 2003 and 2004. Worst of all, perhaps, BP's shares have gained only 6 per cent this year compared to ExxonMobil's 25 per cent and Shell's 15 per cent.