When you work in 80 different countries as diverse as Angola, Egypt, Iraq and Mozambique, Mexico, Brasil, Azerbaijan, Russia and Indonesia, it’s easy to see why you’d be worried about a change of regime in Aberdeen.
If your company operates in places where there are dictators, constant changes of government, mass riots, political trials, extra-judicial killings, no free media, mass poverty, public corruption, no rule of law and drug cartels running whole towns and beheading the police, it’s understandable that the prospect of paying less corporation tax to do business in Scotland would freak you. But that’s the view of the fearless buccaneering American go-getter Bob Dudley of BP. Things could get difficult for Bob as he dodges into doorways on Union Street afraid of what calamity independent Scots might visit on him and his company.
And he’s right to be concerned. Remember this is the man who had to sneak out of Russia with unsmiling oligarchs on his tail when a joint venture went wrong. In 2003, he was in business with four Russian billionaire oligarchs. The Russians wanted more bang for their buck and the venture became a fierce power struggle, with BP executives alleging harassment by both the oligarchs and the Russian government. Dudley was sweeping his office for bugs and taking phone calls on his balcony to avoid being recorded. In July 2008, Dudley fled. His visa was set to expire, and it seemed that the Russians weren’t keen on renewing. BP was so paranoid at the time that they didn’t announce his departure until he was airborne, and refused to disclose his whereabouts. Dudley continued to run the company from his secret location. A Russian court banned Dudley from holding office in the country for two years.
Now that is exactly what I suspect Salmond plans. As soon as we’re independent he’ll muscle in on BP profits, demanding more and bugging Bob’s office and getting Aberdonians to spy on him. No wonder brave Bob is a worried man. Russia is nothing compared to the cold shoulder in Aberdeen where even the seagulls attack to order.
And let’s not forget a genuine tragedy afflicting BP which is, how can I put this, unlikely to occur in the Forties Field… the Amenas gas plant in Algeria was attacked last January by Al-qaeda and four members of staff and 36 colleagues from partners and contractor companies murdered among them two Scots Carson Bilsland of Bridge of Cally and Kenneth Whiteside of Glenrothes. Doesn’t it ring hollow to you – and shouldn’t it do so to Dudley – for him to talk of uncertainties in Aberdeen and the North Sea when in recent times his company has confronted real, chilling difficulties which cost the lives of his own people in other much more challenging countries?
But Bob of course didn’t really mean that. He was playing politics and when asked at a press briefing about difficulties said he thought that “office costs” would go up. What is he talking about? Will Muriel in accounts demand a pay rise now she’s independent, will the price of rowies go up or will the cleaners demand more time off to go to Pittodrie now that Aberdeen are back up the SPFL? We are not told. But what we are told by Bob in his more lucid chief executive mode is this.
“BP has been given the go-ahead to develop the second phase of the massive Clair Field in the Atlantic frontier west of Shetland as part of a £10bn investment by BP and its partners over the next five years. The latest surveys of the 20-mile long field have also confirmed seven billion barrels of oil equivalent are in the giant reservoir, making it the UK’s largest hydrocarbon resource. Global energy demand is going up, and the world will need 16 million barrels per day more in 2030 than today.”
So that looks like the end of the North Sea adventure for BP then. That investment and his remarks make clear there is no future in Scotland….
No, hang on. Here is Bob again reported by an industry journal. A third phase of the Clair Ridge is mooted (on the back of the £4.5b investment), the Quad 204 project to replace equipment at the Schiehallion field west of Shetland was also significant and BP confirmed plans to bring the Kinnoull field north-east of Aberdeen into production this year.
So what exactly is this prince of businessmen saying? Is he threatening to pull out of the North Sea? Definitely not. But you have to say that his unclear remarks hinting at big decisions ahead after a Yes vote are likely to spook investors who have thus far been reassured by most major businesses and investment financiers that independence offers no immediate threat.
Or perhaps the same businesses and financiers know full well that he is playing a political game which has absolutely no meaning whatsoever for the company and its operations. Indeed, the offer from independence is lower corporation tax and guaranteed industry consultations before any tax changes – to avoid uncertainty.
And where has uncertainty come from previously? Here is a quote from Douglas Fraser, Economy Editor at BBC Scotland: Oil and Gas UK, representing the sector links the sharp drop in production over the past couple of years to tax raids by Gordon Brown last decade and by George Osborne in 2011. Care to comment, Bob?
In his BBC interview Dudley named two other areas of concerns apart from “office costs”. He was worried about currency. There are two replies to this. First, the Scottish government has never wavered throughout the referendum campaign from its view that it will use sterling. The British have refused to rule it out, although they could. Or they could say it is likely. Either way, this is London’s call and Bob has a direct line to Number 11 so why doesn’t he use it and end his uncertainty? Second, I thought oil transactions were conducted in dollars. I hear there is a move to change that but if it happens it would be by going into the euro (much maligned in the UK) certainly not using sterling. Does Bob really understand his own business?
Then he is worried about EU membership…do you feel like screaming at this imbecilic nonsense? Brussels will only clear it up if asked by London and London refuse to ask – ergo, Bob – demand London clears it up…And if you’re so worried about EU membership what have you said to Cameron about his referendum plan?
Can a man in charge of one of the world’s biggest companies really be so dim-witted about areas which he himself says are crucial to his business? Eh, yes, he can.
He seriously infuriated the waiting oil industry community in Houston at the annual CERAweek conference by failing to read their mood and brushing aside the Deepwater Horizon issue for which the company is on trial in New Orleans. Eleven men died and millions of tons of oil polluted the Bay of Mexico in the BP spill and for which the company is paying out billions in compensation, hitting their profits today. One report said: “He canceled his post-speech press conference, likely because he didn’t want to be asked about the likelihood of settling with the Department of Justice. And in his speech he neglected to speak much at all about the changes that he has wrought during his 2.5 years at the helm of BP. This is too bad, because what the gathered suits would really like to hear from Dudley is a litany of reasons to believe that BP is back, solid, secure, safe.”
So there he goes again…avoiding the key point and running away. When asked to be specific about independence in Scotland he declared himself “against Scotland drifting away”. Does he know something about geology we don’t? Or does he read into Salmond’s statements as an oil economist anxious to work with the industry to secure its future profits and help his country that he somehow is going to become less interested in Scotland’s North Sea bonanza? The sad truth for Dudley is that if a politician had made such weak, unsubstantiated statements they would have been laughed at. But because he carries the mantle of corporate power he is revered and lauded for his courage. Well, not in my house. And I’m not sure how many oil people in Aberdeen will welcome unhelpful vague innuendo about their future.
And here’s a thought to ponder. Why DID he voice those “personal views” yesterday? Try this virtual conversation between a BBC business correspondent and BP’s media man.
BBC: Profits down 30 per cent? Doesn’t look good.
BP: All because of Deepwater Horizon.
BBC: Ah yes, how is the trial and payment of billions in compensation going?
BP: We’d rather avoid that. Can I suggest you ask him a question about independence. He might have something to say.
BBC: Righto! Thanks.
And what is everyone talking about today? What was wall-to-wall on television news? Did you hear that profits were down….or did you hear concerns about independence? Isn’t it interesting just how docile and compliant our media is when a story that fits their agenda is laid before them. And doesn’t it partly explain the imbalance in coverage by the broadcasters…all No has to do is say the world Fear and all intelligence and scrutiny evaporates from our journalists who seem unable to ask the most basic questions. They fall down in front of this guy in gratitude and take him at face value, do as they are commanded, follow his agenda, and are satisfied that journalism has been served. Surely the job is to report what he says and then analyse what he is saying and why is he saying it?
Normally when a businessman strays into politics a correspondent’s antenna would twitch. At the very least he would ask if this was what shareholders expected of him and doesn’t preferring one side over another alienate a market?
I realized overnight why that didn’t happen here. It is because what Bob Dudley was saying fits the bias and agenda of the journalists. Their mindset is that independence is silly, dangerous, anti-English and disruptive of business and here is someone in authority backing up their prejudices. It isn’t that Dudley shouldn’t say it, it’s that the journalists forget their primary duty when reporting it. The coverage today lacked balance but worse, it lacked basic questioning journalism and is turning our debate into Punch and Judy…he says something, she hits him over he head.
This moronic journalism came up last night at the launch of Murray Pittock’s revised book Scotland – the Road to Independence? at Blackwell’s in Edinburgh. There is a growing sense that the combination of outrageous, insensitive, dismissive messages from London government and Labour, the unremitting dependency offensive of No and the parroting of all this by an increasingly mistrusted media is slowly backfiring. It is reaching the end of its worth and is turning in on itself. Nor am I sure that the media is right in assuming that the public is intimidated any more by the garlanded statements of businessmen. The banking crisis destroyed the last vestiges of respect for the corporate elite as moral leaders as surely as the expenses scandal did for Westminster politicos. Mr Dudley may be misjudging the Scots, just as he did those Russians, the Texas oilmen and the bereaved families of his dead workers.
(My contributor Mac provides this illuminating quote from oor Boab on just how worried he is about political change. .. At the height of the Libyan civil war in 2011. “The Libyan crisis has not disrupted any of our businesses at any point so far. Our activities are far away from any of the troubled areas, but time will tell. BP is committed to improving the business in Libya regardless of the political situation”.
Of course if Alex Salmond is in charge, we’re out of here…!