Financial Mail, London, Lisa Buckingham column

Financial Mail, London, Lisa Buckingham column. Check it out:
(Daily Mail (London) (KRT) Via Thomson Dialog NewsEdge) Sep. 24--Why Lord Browne fought unsuccessfully to stay at the helm of BP long after the company's compulsory retirement date of 60 is anyone's guess.

It was an ignominious tussle with his chairman, Peter Sutherland, and one that resulted in him getting only a few months extra in the top job.

But even as unseemly briefings by "friends" of both men were given gleeful coverage in the financial Press, BP appeared to be unravelling faster than a ball of wool in the paws of a kitten.

To say that BP, once one of our most admired companies, has had a torrid year or so is an understatement. It suffered the worst refinery fire in the industry's history last year when 15 people died and hundreds were injured in Texas.

Its giant Thunder Horse platform in the Gulf of Mexico was badly damaged by Hurricane Dennis and production will now come on stream in 2008 two years late.

Several of its commodity traders in America were accused of trying to manipulate the propane gas market. The US authorities also announced an investigation into its trading in crude oil and gasoline between 2002 and 2004.

And it was forced to shut production at Prudhoe Bay in Alaska after the discovery of severe corrosion in the pipes. It then emerged that senior BP executives had been warned repeatedly by employees that maintenance at Prudhoe Bay was not up to scratch, yet these alarms were, somehow, ignored.



Browne is resisting pressure to put in a personal appearance at hearings in the US into some of the group's alleged failures. These have incensed politicians on Capitol Hill, where BP's laudable refusal to make the political contributions routinely expected from oil majors means he has few friends to call on in times of need.

The company is, of course, a gigantic enterprise and wildcat fires can be expected in far-flung reaches of its empire. But the coincidence of bad news suggested something might be rotten at the heart of the edifice that Browne built.

Shareholders, with whom BP has in recent times enjoyed the best of relations, let it be known they were seeking one-to-one meetings with the company's diminutive boss to satisfy themselves that things were not as bad as they appeared.

There were signs of hope late on Friday when BP said it was about to bring parts of Prudhoe Bay back into operation.

And, though it is arguably a year late in coming, Browne has now ordered a top-to-bottom overhaul of the company's safety and environmental procedures, similar in scale to the rethink undertaken by Exxon after its tanker, the Valdez, caused one of the worst oil spills.

The operation to clean up the damage in Alaska is likely to take up to a decade. But by that time Browne will be long gone.

What a pity that the man who has year-in, year-out been voted Britain's most-admired business executive will spend his final days at BP fighting fires. And what a terrible misjudgment to have sought to extend them.

HAD YOU HAD THE DUBIOUS DISTINCTION of carrying out a refinancing of Russian government debt, only to have the Kremlin turn round and devalue the rouble, emerging markets might not seem a terribly comfortable place.

That seems to have informed the recent thinking at investment bank Goldman Sachs. But under new chief executive Lloyd Blankfein, the Wall Street powerhouse seems ready to have another look.

Blankfein believes that emerging markets -- Russia, China, India and Latin America are becoming mainstream (though the Putin government appears hell-bent on undermining that in Russia).

Look at some recent blockbuster mergers and acquisitions to see what Blankfein means.

Cases in point include Indian-born Lakshmi Mittal's 18.3 billion acquisition of Europe's Arcelor, the emergence of a Russian bank as the largest outside shareholder in Airbus's parent group, Eads, plus a host of Chinese companies that rushed to list on the London Stock Exchange.

Goldman is already well ensconced in China, but watch out for it bulking up in territories where it feels underrepresented.

There is also likely to be a push into the mid-corporate market. Goldman is, of course, best known for working with some of the world's largest companies.

But many of these have balance sheets bigger than Goldman's and do not always want the Americans' huge funding resources.

Smaller fry may not be prepared to pay top dollar for Goldman's strategic advice, but may be happier to dig into their pockets if there were the possibility that such huge coffers might be at their disposal.

Goldman, which recently announced sparkling profits, does not aim to be an all-things-to-all-people bank such as Citigroup (it has, for example, permanently eschewed a retail offering).

But it has a sure-footed record on diversifications -- insurance and commodities have been happily added. There seems little reason to suspect that it will not safely cast its net even wider.

To see more of the Financial Mail on Sunday, or to subscribe to the newspaper, go to http://www.financialmail.co.uk.

Copyright (c) 2006, Financial Mail on Sunday, London
Distributed by McClatchy-Tribune Business News.
For reprints, email [email protected], call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.
The opinions and views expressed in comments, blogs, etc. are those of the authors alone and not necessarily those of TMC, TMCnet, or its editors. TMCnet reserves the right to edit, delete, or otherwise make changes to the content that appears on these pages at its own discretion and as it deems necessary.

Listed below are links to sites that reference Financial Mail, London, Lisa Buckingham column:

Around TMCnet Blogs

Latest Whitepapers

TMCnet Videos