Eric Watkins
Oil Diplomacy Editor
BP PLC Chief Executive Officer Bob Dudley, in a major speech before the Confederation of British Industry, admitted that the firm's "very existence" had been threatened as a terrible accident grew into a corporate crisis. But Dudley vowed that BP has the resilience to grow as a result of the disaster.
"This is a story of the damage that can be wrought by a single accident in one segment of a giant company's operations," Dudley said. "From a terrible accident and environmental spill grew a corporate crisis that threatened the very existence of our company—a major loss of value and loss of trust."
He said, "This was a devastating industrial accident that should never have happened," referring to the Macondo deepwater well blowout and Deepwater Horizon semisubmersible fire and subsequent oil spill in the Gulf of Mexico. "We have mounted a substantial response and have stepped up to meet our obligations to all our stakeholders," Dudley said. "We fully intend to continue doing this until the job is done," he vowed.
"That is the basis I believe on which we will earn back trust in BP and begin to restore the company's battered reputation," said Dudley, an American who took over from the British Chief Executive Tony Hayward in the aftermath of the Apr. 20 accident.
"A silver lining of the event is the significant and sustained advance in industry preparedness that will now exist going forward from the learnings and the equipment and techniques invented under pressure to contain the oil and stop the well," Dudley told his audience, a lobbying group for British industry.
"There are lessons for us relating to the way we operate, the way we organize our company and the way we manage risk," Dudley said, adding that that BP remains "financially healthy" and that the firm's "underlying operational and financial performance is sound."
In his speech, Dudley cast a critical eye on the media for its saturation coverage of the event, saying "the demand for information and instant conclusions is insatiable."
He said, "We live in an atmosphere where many things are often exaggerated, opinion can quickly become polarized, and it is tempting to react to events in extreme ways."
Dudley noted, "Over 87 days as the oil kept flowing into the ocean, it frequently felt as if we were the only story on the news, 24/7. I have seen figures that in some months fully 30% of the 24-hr news coverage was devoted to the incident."
'Great rush to judgment'
There was, Dudley added, "a great rush to judgment by a fair number of observers before the full facts could possibly be known, even from some in our industry."
He stated, "I watched graphic projections of oil swirling around the gulf, around Florida, across and around Bermuda to England—these appeared authoritative and inevitable. The public fear was everywhere," expressing the hope that in the coming months and years a more "balanced and informed judgment about what happened" would emerge.
Meanwhile, Dudley affirmed that BP would continue to operate in the US, saying that relationships with federal and state government departments and agencies "have survived and are beginning to recover" in large part because of the scale of BP's response. "They have not completely lost faith in BP," he said.
"And for our part, I can promise you that I did not become chief executive of BP in order to walk away from the US. BP will not be quitting America. There is too much at stake, both for BP and the US. The US has major energy needs. BP is the largest producer of oil and gas in the country and a vital contributor to fulfilling them."
Dudley was no less optimistic about the future of deepwater drilling, saying that, "If we truly learn the lessons from this accident, I see no reason to close off the deep water as an area of future oil exploration and production."
More generally, Dudley said, "The deep waters are becoming an increasingly important source of energy to fuel the global economy. They account for around 7% of total oil supplies now, growing to a projected 9% in 2020. And we are one of only a handful of companies with the financial and technological strengths to undertake development projects in these difficult geographies. And it can be done safely."
Dudley concluded by saying that BP fully accepts its share of responsibility, but that "for everyone's sake that over the next months and years we can reach a balanced and informed judgment about what happened and what we need to learn."
It was, he said, "a human tragedy and a terrible event with major environmental and economic impacts. It was an accident from which we must and will learn."
The executive concluded, "We were certainly not perfect in our response. But we have tried to do the right thing and we are making significant changes to our organization as a result of the accident. That is the standard by which we expect to be judged as we work to restore trust in BP. And that is how we ultimately expect to emerge stronger from what has been a thoroughly traumatic event."
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