BP's Empty Apology

“Never apologize; It’s a sign of weakness”–John Wayne, “She Wore A Yellow Ribbon” 1946

BP plc (NYSE: BP) CEO Bob Dudley said he was sorry about the oil spill that was the result of the explosion and subsequent oil leak from the Deepwater Horizon. At the CERAWeek energy conference, Dudley said “This is the first chance I have had to address such a large gathering of industry colleagues and the first thing I want to say is that I am sorry for what happened last year.”  The explosion occurred last April 20. BP has had to sell assets and issue debt to cover the anticipated losses from the disaster. It has established a $20 billion fund to compensate individuals and businesses which were hurt by the incident. The overseer of the fund, Kenneth Feirnberg, said the entire amount may not need to be spent. Claims are apparently below forecast.

BP has recovered quickly from the damage. The UK-based oil firm is profitable again. It’s stock was $60 just before the explosion. It trades at just below $50 now. Analysts expect BP to make $6.51 per share next year. That would be up from $5.92 in 2011. BP has even done well enough to reinstate its dividend, albeit at a level of half what it was before Deepwater Horizon.

Dudley can fairly claim that the disaster did not take place on his watch. Tony Hayward was CEO a year ago, and he has been fired. Hayward replace Lord Browne in May 2007. Ironically, one reason Browne was forced out was  BP’s safety record during his tenure.

What Dudley did not offer as part of his apology was any clear road map to safer deepwater drilling. He supposes the industry should and will take a larger role in safety improvement. That is a dodge because no other large driller has had a huge leak. A presidential commission on the Deepwater Horizon disaster put the causes squarely at BP’s feet and those of its drilling partners. Dudley made no mention of how BP would lead an effort on deepwater safety or what dollar amount and resources it will contribute to the cause.

Dudley has learned a lesson from many other multinational CEOs. Keep statements about past problems vague. The media and public have short attentions spans. Don’t open wounds unnecessarily

Douglas A. McIntyre