Britain, democracy or BP oiligarchy?

This video says about itself:

Baker on Bush & Blair’s Ties to BP

16 September 2010

Russ Baker, investigative journalist and author of ‘Family of Secrets‘ explains the relationship between Bush, Blair and BP, otherwise known as Blair Petroleum. He also touches on the lead into the Iraq war.

From daily The Guardian in Britain:

Revealed: BP’s close ties with the UK government

FoI documents show the extent of BP’s influence on government policy and how their intimate relationship is at odds with UK commitments to reduce carbon emissions

Felicity Lawrence and Harry Davies

Wednesday 20 May 2015 18.34 BST

For the oil multinational BP, it was a historic moment – the signing of a joint venture to exploit the vast oil and gas reserves of Russia’s Arctic shelf with the Russian energy giant Rosneft. The deal was worth £10bn in share swaps.

The chief executive of Rosneft, Igor Sechin – then Russian deputy prime minister, key Putin ally and one of the most forbidding characters in the world of oil – would be coming to London to seal the agreement. Rosneft is majority owned by the Russian state, and BP urgently needed a senior British government figure to mark the alliance.

So, the night before the signing in January 2011, BP’s managing director Iain Conn picked up the phone to the then secretary of state for energy and climate change, Chris Huhne. It was awkward, for Huhne had a long-standing engagement – to give a speech at a Liberal Democrat dinner on the Isle of Wight to an audience that would include key representatives of the island’s renewable energy industry. There was, though, only ever going to be one winner.

Despite any doubts Huhne, a champion of a low-carbon economy, may have held, he agreed to be there, alongside Sechin, the former KGB officer variously dubbed ‘the scariest man on earth’ and ‘Darth Vadar’. Officials had quickly prepared briefings for Huhne, which discussed the “environmental sensitivities” about risky – and carbon costly – deep water drilling in the Arctic. If pressed on why he was “publicly blessing” the company behind one of the world’s worst environmental disasters, Huhne was simply to say: “Russia is a valuable energy partner for the UK and a deal of this scale is a major development for the energy industry in both countries.” But it was instead Russia’s contribution to “fuelling Europe” in coming decades rather than fears over climate change that officials emphasised.

It helped that Conn and other senior BP executives had been in to visit Huhne just a couple of days earlier to discuss BP’s interests. They had talked through the company’s $20bn (£13bn) exposure to its Deepwater Horizon oil spill disaster in the Gulf of Mexico.

Although the government viewed the financial hit as BP’s problem, it was worried the oil giant’s vast bill for the Gulf accident would hit many UK pension-holders, according to Tom Burke, former BP employee, now chairman of the environmental organisation E3G and advisor to Shell, Rio Tinto and Unilever. About 1.5% of UK pension industry money was invested in BP shares, which had plummeted. And BP had scrapped its dividend payments.

“Around 7% of UK pension fund annual income came from BP at the time. A further 12% came from Shell, so nearly one-fifth of pension funds were intricately linked to the profits of these two oil and gas companies,” explained Burke.

At that meeting, BP was assured by the Department of Energy and Climate Change (Decc) that it would do what it could, with lawyers from the Treasury, the Foreign Office and the business department, to find “an operational solution” to allow BP to reopen the major North Sea gas field it owned jointly with Iran despite the EU’s sanction regime against that country.

The solution, a couple of years later, would be for Iran’s share of the profits to be held by the British government in a frozen account.

These extraordinary insights into the extreme closeness between the British government and one of its biggest companies came to light after a Freedom of Information (FoI) request. Nobody, perhaps, should be much surprised by it. After all, they have shared mutual interests since the first British involvement in commercial oil exploration in the Gulf over 100 years ago.

British governments realised that this company could fuel its economy and its war effort. By switching the Navy to running on BP’s oil, Winston Churchill helped ensure the survival of the struggling business that had begun life drilling speculatively in Persia as the First Exploitation Company. He then insisted on controlling this vital resource, and, in 1914, the government bought a majority share of the company, by now called Anglo-Persian Oil.

British Petroleum, as it became in 1954, was privatised in 1979, when Mrs Thatcher sold a 5% stake to take the government’s share to 46%, a minority holding for the first time. It was only in 1987 that the government sold the last of its shares.

As one former Whitehall official put it: “The presumption that the British government should have an intimate relationship with big British multinationals especially BP and Shell was in the air you breathed.”

But, even after the sell-off, the place of BP in the life of the British nation – and at the heart of government – remains strong. Only last month, Downing Street told BP and city investors that it would not remain neutral if BP became the target of a foreign takeover.

And yet there is one big difference now: on climate change, the interests of the government, signed up to cutting its greenhouse gas emissions by 80% on 1990 levels by 2050, are not aligned with those of BP, which is pressing on with the pace of fossil fuel exploration. Critics say BP’s business model of continuing to prospect for more reserves is at odds with attempts to limit carbon emissions to keep the rise in the Earth’s temperature below 2C, the widely-agreed threshold for dangerous climate change.

Keeping below that figure is at the heart of the Guardian’s Keep it in the Ground campaign. It is calling on the world’s two largest health charities, the Bill and Melinda Gates Foundation and the Wellcome Trust to move their investments out of fossil fuel companies. Both are world leaders in health research who recognise the serious threat to public health posed by climate change, but they both hold significant holdings in fossil fuels. For BP specifically, the Gates Foundation’s Asset Trust has a £243m holding and Wellcome has £118m, according to the most recent figures.

Despite the UK government’s commitment to tackling climate change, documents released under the Freedom of Information Act show that BP and the British government are still hand-in-hand.

John Ashton, the UK’s top climate diplomat until 2012, fears they are caught in old habits.

He has been highly critical of the oil companies’ failure to embrace the speed of change needed.

“Britain’s overriding national interest is an effective response to climate change, which will require a carbon-free energy system within a generation or so,” Ashton told the Guardian. “This is an existential challenge to the oil and gas companies. They now face an uncomfortable choice between finding new business models, or clinging to the status quo of fossil fuel dependency and coming increasingly to be seen as enemies of the national interest.”

Not yet though. Documents from the Foreign Office reveal government policy that still barely distinguishes between the British national interest and the commercial interests of its main oil and gas companies.

The Foreign Office, for example, held its annual “BP high level dinner” last July, “to strengthen the strategic relationship between BP and the FCO on global economic and energy issues”, according to heavily redacted documents marked “sensitive” and “restricted”. All the top FCO directors from the head of the diplomatic service down through the directors of the main regions, to the heads of the FCO economic, strategy, and “prosperity” units, were on the attendees list. …

In Moscow, immediately after the Russian Crimea move, the British ambassador met BP’s Russia Energy president to discuss BP’s exposure. A note of the conversation, marked “restricted and commercially sensitive”, and which is mostly redacted, says “BP’s equities in Russia were clear: $14-15bn of investment in Rosneft”.

The inference: BP was in a fix. The British government was there to help. BP’s commercial interests would inform the precise detail of the inevitable sanctions against Russia.

If the stakes over BP and Rosneft were high geopolitically, elsewhere the British government’s support for the company was more straightforwardly commercial. The coalition agreement in 2010 promised – at Liberal Democrat insistence – to help move to a low-carbon economy. But the Foreign Office was being refocused by Conservative foreign secretary William Hague away from diplomacy towards the promotion of British trade.

It upgraded its presence to a full consular office in Calgary, Canada, in 2011 to support UK businesses investing in the region — BP and Shell both have major tar sands projects in the area. Tar sands are among the dirtiest, most-carbon intensive of fossil fuels to exploit.

For BP, this intimate relationship with ministers and officials is as natural as it appears for Whitehall. “BP is a major UK-headquartered company with significant businesses and investments in the UK and worldwide. We employ around 15,000 people in this country and are currently undertaking a multi-billion pound investment programme in the UK North Sea. As such, we have regular meetings with various UK government departments who are interested in both our business and various issues involving our industry. Many of these are at the government’s request,” the company said in a statement to the Guardian.

A key feature of this relationship is the revolving door between BP and government. It earned the company the moniker Blair Petroleum under Labour governments. It continues to revolve today, with former BP chief executive Lord Browne brought in to the Cabinet Office by the Conservatives in 2010 to help appoint business leaders to new boards of each government department, and former BP executive John Manzoni now chief executive of the Civil Service.

The door swung the other way last week, as BP appointed the recently-retired head of the UK’s secret intelligence services to its board. The former MI6 spy chief, Sir John Sawers, would bring invaluable geopolitical experience, said BP’s chairman.

The significance of all this for climate change is profound. Being embedded in Whitehall, it appears, has given the oil and gas multinationals confidence that the government will not act on emissions in a way that will restrict their growth.

Burke, at BP when Browne experimented with moving towards renewables, only to retreat after a shareholders’ savaging, says the oil companies know climate change represents “an existential threat” to their business.

“They’ve worked it out. The only people who have done as much thinking as them on this are the military,” said Burke. BP is “certain that government won’t act on their obligation to keep the rise in global temperatures below 2C and in fact will be allies to keep the revenues flowing.”

Asked how the company reconciled the urgent need to cap dangerous greenhouse gas emissions with its exploration of new frontiers, BP said: “Affordable, secure energy is essential for economic prosperity and we forecast that global demand for energy is set to grow by nearly 40% by 2035. The International Energy Agency’s (IEA) estimates that by 2040 up to 60% of the fuel mix will still be fossil fuels; investment to develop oil and gas will continue to be needed.”

The trouble with that, as environmentalists point out, is that the IEA’s estimate from which BP takes comfort is based on capping CO2 emissions in the atmosphere at 450 parts per million. At that level, we have by scientific consensus only a 50% chance of preventing dangerous climate change.

The BP chief executives

John Browne (1995-2007)

Lord John Browne, now 67, transformed BP from a second-tier oil company to a major player on the international stage. He became one of the most celebrated British businessmen and was dubbed the oil industry’s “sun king”.

Browne – who enjoyed close ties to both New Labour’s business-friendly elite and later David Cameron’s coalition – attempted to position BP as environmentally-minded, flirting with renewables and launching the “Beyond Petroleum” PR campaign.

Today, assessments of Browne’s record at BP are less gushing. Browne later admitted BP should have done more to prevent two major disasters that occurred on his watch and a long-term culture of ruthless cost cutting and risk taking, which began under Browne, has also been blamed for leading to the Deepwater Horizon disaster in 2010.

Tony Hayward (2007-2010)

Tony Hayward, who will be 58 on Thursday, was Lord Browne’s “turtle”. This was the nickname for Browne’s indispensable right hand men who swiftly worked their way through company ranks – a reference to the cartoon superheroes.

After taking the top job, Hayward doubted whether solar and wind would ever compete with fossil fuels and closed Browne’s renewables division. For BP it was, as the Financial Times put it, back to petroleum.

Hayward was forced to resign as oil continued to spill from BP’s Macondo well in the Gulf of Mexico. His response to the disaster was littered with “thoughtless” gaffes, angering Republican senators and environmentalists alike.

Two years later, Hayward was back. He became chief executive of Iraq-focussed oil company Genel Energy and last year became chairman of commodities giant Glencore Xstrata.

Bob Dudley (2010-present)

Bob Dudley, 59, arrived at BP in 1999 after its acquisition of the US oil company Amoco. In 2003, Dudley – a “nice guy” from a small town in Mississippi – became chief executive of BP’s Russian joint venture TNK-BP but was forced to flee Moscow in 2008 under pressure from authorities.

In 2010, Dudley became chief executive amid an existential crisis for BP. His task: salvage the company as a viable business after the worst oil spill in US history.

Despite falling profits and shrinking shareholder returns, Dudley received a 25% total pay rise earlier this year which he accepted after implementing a raft of job cuts and missing safety targets.

Deepwater Horizon oil spill killed large numbers of dolphins, study suggests. Dolphin deaths had already been reported within the oil spill’s footprint, but new findings are strongest yet linking them to the environmental disaster in 2010: here.

The BP Oil Spill Killed a Lot of Dolphins: here.

31 thoughts on “Britain, democracy or BP oiligarchy?

  1. Its a fundamental realization of the public is they are now rendered powerless, no government represents the general public’s concerns, the rules and regulations pile up daily for the individual’s loss of freedom and the destruction of the morale and morality this is enforced by a militaristic police force, corporations and the big money and any unions left are infiltrated by the corrupt, the finance industry is another corrupt organization who plays the the main role in government policy and the government is their to make money for themselves as individuals and placate and sooth the voting public, to increase taxes, to increase corporation riches, as can be seen by the sale if art works such as the sale of $179 million dollars for a painting and nearly $7 billion dollars fine for the four banks manipulating currency, the fact that you have taxation on government scams such as the bedroom tax and the government increasingly involved with surveillance of the individual here I am meaning the so called unrepresented man and government’s can endorse cruelty such as cattle being killed in abattoirs with sledge hammers, we are faced with a vindictive and evil establishment that we should make as a individual choice to get rid of, as otherwise we contribute to this hell upon earth


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