BP Goes Hollywood, But Doesn’t Want to Be a Black Swan


The news that the producers behind the blockbuster Twilight movie franchise are developing a movie about the Deepwater Horizon disaster — Michael Sheen gets our vote for former CEO Tony Howard — indicates that BP won’t shake the oil spill from its image for quite some time — if ever.

While it’s too early to say if BP will be getting The Social Network-like treatment by Hollywood, the embattled oil giant’s new CEO says there’s one movie its annus horribilis (2010) doesn’t resemble — The Black Swan.

Robert Dudley, who replaced Howard as BP’s CEO, has been on the speaking circuit, is trying to restore the battered brand as he makes new deals and alliances to shore up its fortunes.

As consumers and businesses alike reel at the recent spike in gas prices, particularly in the U.S. and Canada, oil industry executives are off on a junket at the very same time, attending CERAweek in Houston — where Dudley made his Black Swan reference.[more]

CERAweek is a major energy industry conference, now in its 30th year, sponsored by IHS Cambridge Energy Research Associates, a leading advisor to international energy companies, governments, financial institutions, and technology providers.

One of the featured speakers at CERAweek is none other than Dudley, who yesterday made his first public address to oil industry executives since becoming head of BP.

While not disavowing responsibility for the oil spill, (“BP is sorry. BP gets it. BP is changing,” he said), Dudley was inclusive in sharing the blame.

BP was seen to have benefited from a recent government report stating that Halliburton and Transocean, owner of the Deepwater Horizon rig, shared in the responsibility for the Gulf disaster. Dudley commented, “I think it would be a mistake to dismiss our experience of the last year simply as a ‘Black Swan,’ a one-in-a-million occurrence that carries no wider application for our industry as a whole. I believe the industry also has a responsibility to change.”

He added that “one company’s calamity quickly becomes every company’s concern.” 

Not so fast. Exxon Mobil’s CEO, Rex T. Tillerson, has said a number of times, “I do not agree that this is an industry-wide problem.” Clearly, oil companies have been scrambling to distance themselves from the “We’re in this together” mentality of the BP leader.

In fact, writes Clifford Krauss in the New York Times, senior executives at other oil companies “said their companies would have designed wells differently from the Macondo well involved almost a year ago in a blowout that killed 11 workers and leaked millions of barrels of oil into the Gulf of Mexico. They said the accident would not have happened had rig workers and their supervisors followed industry procedures, conducted adequate tests and been properly trained.”

To his credit, Dudley has taken steps to make sure a catastrophe like the oil spill will not happen again, establishing a central safety organization with some 500 safety specialists who have the authority to intervene at any one of BP’s global sites. Some sites have already been shut down by this group for safety reasons.

Dudley has been selling off BP assets to pay for damages from the oil spill, particularly in the U.S., but at the same time, he seems to be looking to future growth. The company’s shares have rebounded at least partially, and with the current rise in oil prices, BP made a dividend payment to shareholders.

Interestingly, BP is also spending money. It just announced it was plunking down over $7 billion for a stake in oil and gas fields in India, and close to $8 billion so it could drill in the Arctic, thanks to an agreement with Rosneft, a Russian company. But another Russian partner of BP, TNK-BP (whose logo change we wrote about) has taken legal action against that deal, claiming it violates previous agreements.

Still, the oil spill continues to dog BP, leading some analysts to question its viability. Brian Youngberg, a senior energy analyst at Edward Jones, told the Times, “There’s still uncertainty over spill liabilities and there is no real catalyst to see how this company can grow over the next three years.”