BP: The logic of running and hiding
Tony Hayward certainly isn’t intentionally seeking to sink his company and the rest of Big Oil with it. Others elsewhere are well explaining the profound environmental tragedy flowing from the April 20th explosion of its Deep Horizon rig in the Gulf of Mexico. But, as we’ve discussed here and elsewhere, it’s also causing serious damage ...
Tony Hayward certainly isn't intentionally seeking to sink his company and the rest of Big Oil with it. Others elsewhere are well explaining the profound environmental tragedy flowing from the April 20th explosion of its Deep Horizon rig in the Gulf of Mexico. But, as we've discussed here and elsewhere, it's also causing serious damage to the oil industry's future ability to obtain permission to drill around the world (think environmentally fragile Kashagan, for example). Hayward is painfully aware of the 30 percent plunge in his company's share price since the spill. As this blog has discussed, Exxon is now regarded as the industry's gold standard for safety, but its shares, too, are down by 16 percent since the spill, and are trading at a 52-week low.
Tony Hayward certainly isn’t intentionally seeking to sink his company and the rest of Big Oil with it. Others elsewhere are well explaining the profound environmental tragedy flowing from the April 20th explosion of its Deep Horizon rig in the Gulf of Mexico. But, as we’ve discussed here and elsewhere, it’s also causing serious damage to the oil industry’s future ability to obtain permission to drill around the world (think environmentally fragile Kashagan, for example). Hayward is painfully aware of the 30 percent plunge in his company’s share price since the spill. As this blog has discussed, Exxon is now regarded as the industry’s gold standard for safety, but its shares, too, are down by 16 percent since the spill, and are trading at a 52-week low.
So one might well wonder what is going on in Hayward’s mind as BP continues to expend much effort attempting to deflect fault. In the latest example of this dance, two BP executives sat down with my former Wall Street Journal colleagues Russell Gold and Guy Chazan, and proceeded to lay more trash at the doorstep of his Gulf contractor, Transocean. Gold and Chazan permitted the executives to speak anonymously, a practice that’s usually discouraged when one party sets out to lay infamy onto another (basically, if you are going to tar someone, you should be prepared to do so on the record). Be that as it may, the pair of executives read from an emergency response manual that appears to assign Transocean full responsibility for activities on the rig, while BP’s representatives are there only to "assist."
As one might suspect, Transocean fired back with its own, countervaling evidence — it provided the two reporters with a complete copy of the manual’s well-control section. As they write:
While Transocean’s top official was atop the chain of command, BP’s senior representative was supposed to consult with shore-based management in Houston to "decide appropriate well-control procedures" if rig crews had trouble handling a serious problem.
In short, as a lesson for BP’s damage-control team: When you are firing your gun, make sure your target isn’t equally or better-armed.
Hayward is probably carrying out this PR strategy to defend against the lawsuits that are piling up; for a defense against however the federal government may elect to respond in terms of punishment; and to protect its corporate image.
Yet he might better stick to his knitting: Get the leaks plugged, and keep the shorelines clean. Meanwhile, stop trying to shift the blame.
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