General News

BP goes back to petroleum - 28 February 2008

The shift to renewables has been ditched for a carbon intensive future

The Armani-style beige suits worn by security staff at BP headquarters in London and introduced under the reign of former boss, Lord (John) Browne, are to be quietly dropped in favour of more traditional grey ones. It is a small change but one dripping with symbolism that the flamboyant days of the "sun king" are definitely over and the company is going back to basics and a bit of no-nonsense austerity.

New chief executive, Tony Hayward, has embarked on a cost-cutting programme that will see the removal of 14,500 jobs and slice £500m off the company's overheads as part of a wider plan to streamline the business.

The biggest change at the oil major is associated with none of these initiatives: it is the decision to accept that high crude prices of between $60 and $90 per barrel are here to stay, which will affect the whole strategy of BP. This "seismic shift," as one veteran analyst described it, promises to hasten in an era of higher dividends, more capital expenditure and investments in high-cost areas such as the oil sands of Canada that were previously considered too costly - and environmentally unfriendly.

'Climate crime'

BP appears to be dropping a central plank of Browne's strategy, the green promise to go "beyond petroleum", in favour of going back to petroleum - a move which many believe has riled the former boss. In what some saw as a thinly veiled criticism, Browne argued at a recent conference that some energy groups were "in denial" over the need to clean up their carbon output.

. . . read the reaminder of this excellent article here on Guardian.co.uk