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Thesis & Antithesis

A critical perspective on energy, international politics & current affairs

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Location: Washington, D.C.

greekdefaultwatch@gmail.com Natural gas consultant by day, blogger on the Greek economy by night. Trained as an economist and political scientist. I believe in common sense and in data, and my aim is to offer insight written in language that is clear and convincing.

07 August 2006

When the good oil company gets hit

There is irony in the news that BP has stopped operations from Prudhoe Bay due to corrosion in the pipeline system that comes from the field: in an industry with few friends, BP has been an exception, led by the statesman-like CEO Lord John Browne and having a commitment to alternative energy that has earned it many friends in and out of the oil business.

It is ironic, then, to see a company that has developed such a positive image be hit by a wave of misfortune: first came a fire in a Texas refinery in March 2005 that killed 15 and injured 170; then were oil spills in Alaska that culminated in the current shutdown; and in June, regulators charged BP with trying to manipulate the propane market in the United States.

All this comes amidst an internal fight in the company which brought Lord Browne to butt heads with company chairman Sir Peter Sutherland about whether Browne would be forced to retire when he turned 60. A compromise followed by which Browne would step down in the end of the calendar year that he turned 60 (2008), about 10 months after his birthday.

Investigations that will follow may weigh more heavily on BP’s responsibility for the oil spill and the accusation on market manipulation. (BP accepted responsibly for the fire at the refinery.) This will show whether BP has had more than just misfortune.

Even more ironic, however, is that ExxonMobil—a company which a far greater reputation for efficiency in the industry (which includes environmental protection at operations)—is still bedeviled by outsiders, at a time when the same people (I include myself here) hail a company such as BP for its corporate responsibility. I guess there are worse things that being ruthlessly efficient.

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