BP CEO backs deepwater drilling despite Gulf spill


LONDON – BP Chief Executive Bob Dudley defended potentially dangerous deepwater drilling on Monday, even as he attempted to strike a penitent note for the devastating Gulf of Mexico spill in his first external address since taking the top job.

The American also stressed BP’s commitment to the United States despite the ongoing political and public fallout there and talked up the company’s ability to withstand the expected financial hit from the spill.

Dudley said that deep waters are becoming an increasingly important source of energy to fuel the global economy amid predictions that the world could be consuming 40 percent more energy than today by 2030.

“We are one of only a handful of companies with the financial and technological strengths to undertake development projects in these difficult geographies,” he told the annual conference of Britain’s leading business lobby group. “And it can be done safely.”

“That’s why the response to what happens in the Gulf of Mexico matters so much,” he added at the Confederation of British Industry’s gathering in central London. “We – together with the rest of the industry and our regulators around the world – simply have to ensure that public confidence in deepwater drilling is restored.”

Deepwater drilling is projected to grow to account for 9 percent of total oil supplies in 2020, from 7 percent currently.

U.S. President Barack Obama recently lifted a moratorium on new deepwater drilling in the Gulf, imposed after the April 20 explosion that kicked off the worst oil spill in U.S. history. The U.S. leader is due to announce further recommendations under a Presidential Commission in the coming months.

Dudley, who took over from gaffe-prone former CEO Tony Hayward early this month, also sought again to reassure business leaders that the company has the financial strength to shoulder the anticipated heavy costs of the Gulf spill.

“Our underlying operational and financial performance is sound,” he said, stressing the company’s wide geographical reach.

To help cover the costs of the spill, BP has begun shedding assets around the world, with a goal of raising $30 billion. It has already raked in almost $9 billion from the sale of assets in Egypt, Canada, the U.S. and Colombia and earlier Monday announced that it has sold its stake in four mature oil and gas fields in the Gulf of Mexico to Marubeni Oil and Gas for $650 million (euro466 million).

Dudley said he has spent much of his time since becoming CEO traveling the world to visit BP’s partners.

“The message I have come back with is strong support and a powerful desire for BP to succeed and prosper,” he said.

Dudley dismissed suggestions that the United States might turn its back on the company, or that BP could voluntarily leave the United States.

“I am confident that neither of these propositions is true,” he said. “Contrary to what is sometimes said, BP is not widely seen over there as ‘British Petroleum’: we’re part of the American community.”

“Our relationships have survived and are now beginning to recover,” he added.

But Dudley also sought to make clear that BP was learning every lesson possible from the disaster, stressing that he has also met with experts from other hazardous industries, including the nuclear and chemical industries, as part of the company’s focus on improving safety.

“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,” he added. “That is the standard by which we expect to be judged as we work to restore trust in BP.”

Dudley dismissed a suggestion that it had taken the Gulf spill for the company to change its culture to focus more greatly on safety, saying that significant changes were made following the deadly Texas City refinery explosion in 2005.

Dudley, who has spent many years in Britain over his career, also had a word of thanks for British support during the fallout: “Believe me, at the height of the crisis it made a big difference knowing we had such good friends at home.”

A service of YellowBrix, Inc.


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