BP Gambling on Oil Sands Venture; City FOCUS
Byline: Elliot Wilson
WHEN BP' s frazzled execut ives surveyed the splintered wreckage of the Deepwater Horizon oil platform in April, many will have feared the worst.
One of Britain's largest and most venerable corporate institutions appeared to be in danger of terminal decline: a target for Shell or Exxon-Mobil's mergers and acquisitions teams, or even the bankruptcy courts.
Yet that hasn't happened. Rather, just over six months after the fatal explosion of April 20, BP appears to be in better shape than ever.
It is sitting on a ton of cash, some of which is being returned to grateful shareholders.
It has made peace, if not friends, with its political adversaries in Washington, many of whom were mollified by the ousting of gaffe-prone by the ousting of gaffe-prone former chief executive Tony Hayward and the insertion of a friendly 'local' face in the form of Robert Dudley.
And it is quietly investing again, this time in the form of a [pounds sterling]1.6bn bet on Canada's oil sands industry, the first outward-focused deal of the Dudley regime.
What went right?
The short answer to that question is, ironically, Deepwater itself. When the platform exploded, 11 rig workers perished, their bodies lost forever to the ocean.
Millions of gallons of crude flooded into the Gulf of Mexico, washing up on the pristine shores of Louisiana and Florida.
But, oddly, Deepwater has handed the British energy giant a new corporate lease of life.
Since emerging from what Dudley referred to as a 'near-death experience', BP is once again, to quote its 1980s advertising campaign, 'on the move'.
The fatal events of late April have quietly provided BP with the perfect catalyst to do some internal spring cleaning. When Washington demanded compensation for lost tourism revenues and clean-up costs, BP went on a selling spree.
Stodgy or poorly-fitting assets in Venezuela, Egypt, America and Vietnam have been shed in an attempt to raise up to [pounds sterling]20bn.
Its 60pc stake in Pan American Energy has gone too, sold for [pounds sterling]4.5bn to a company from Buenos Aires. All told, BP has raised around [pounds sterling]13bn in one of the world's biggest corporate car boot sales.
In doing so it has trimmed excess fat, regaining some of its former sleekness without losing its status as one of a handful of global energy 'supermajors'.
'The Discovery blow-out marks a transformation for BP, a reason to clear out old assets and focus on core strengths,' said Peter Hitchens, analyst at Panmure Gordon.
'They have the opportunity to streamline the business and become more focused. …