THE ECONOMIST: BP has become a British shambles, caring about feelings and not enough about performance

Since 2020 as many people have run BP as have run Britain.

Sir Keir Starmer, the fourth prime minister in as many years, promised to end the pantomime in Westminster.

Last year Albert Manifold was appointed as chairman of BP to do the same thing in nearby St James’s Square.

Sir Keir is still hanging on. Mr Manifold is finished.

On May 26, after less than eight months in post, Mr Manifold was sacked in a unanimous vote by the board, which includes Meg O’Neill, the oil company’s new chief executive.

Mr Manifold inherited a neglected giant. The net-zero strategy of his predecessor Helge Lund, a Norwegian, had made BP uninvestable.

It is fitting, then, that Mr Manifold’s dismissal should have the air of a Eurocratic initiative.

The timing of the directive announcing his departure could not have been better chosen to agitate markets.

It travelled down the wires just as traders in New York returned to their desks after a bank-holiday weekend and were busy digesting news about a possible end to America’s war in Iran. Shares in BP fell by nearly 10 per cent.

But the real sin was the statement’s style. It was written in the worst literary tradition of arrogant, managerial minimalism.

Rather than elaborate on the reasons why BP must now search for another chairman, the board offered just a few lines of cryptic lanyard-speak.

There are “serious concerns” about “important governance standards, oversight and conduct”, the statement said.

Trust us, he’s a wrong’un, pleaded a board which shareholders have little reason to trust. Like Sir Keir, BP’s board appeals confidently to an authority that has been spent twice over.

Thus began a guessing game: what did Mr Manifold do that was seemingly awful enough to jeopardise BP’s turnaround?

Plotting a coup in some faraway resource-rich land? Not likely.

Trying to sink Ed Miliband, Britain’s fanatical minister for net zero, in the North Sea? If only.

Predictably, initial speculation turned to sleaze. In its recent history two BP chief executives have left their posts in bizarre circumstances related to their private lives.

That wasn’t it, either. Instead, Mr Manifold was apparently exiled from clubland for being a bad chap.

The Financial Times reported allegations that he had been viewed by some at BP as aggressive and that the board had received complaints from whistleblowers. Some reportedly called him a bully.

On May 28th Mr Manifold responded. Yes, he may have pushed people to accelerate cost-cutting and strengthen the balance-sheet.

But “at no point”, he wrote, “has anyone raised with me any issue about my conduct . . . I dispute entirely this characterisation of my conduct.”

If Mr Manifold was truly intolerable, the board must explain to shareholders in more detail. If he was merely disagreeable, that is probably proof of a job well done.

As a supposed City grandee herself, Dame Amanda Blanc, the BP director who led the process to appoint Mr Manifold, would surely have known his City-wide reputation for directness.

Having (very) successfully run CRH, an Irish building-materials firm, for a decade, Mr Manifold could hardly have been expected to be a passive and detached chairman.

Accusations of abrasiveness are, in the markets’ eyes at least, a less serious crime than the value destruction of which other members of the board are plainly guilty.

Sure, BP is in much better shape than it was a year ago. Profits from producing oil rise with the price of the commodity, after all.

The company’s traders are making a fortune. Last year it made a huge discovery off the coast of Brazil.

Its corporate structure is in the process of being simplified. But the job is not even half finished.

Costs are out of control, including at its headquarters in St James’s. It is the most indebted of the major oil companies and still bears the weight of some of its worst misadventures in renewable energy.

Must BP always be as ungovernable as Britain?

Oil majors often reflect the politics of their home countries.

Exxon and Chevron are run by men who care little about the separation of powers. Both run the board and manage the company.

Together the firms are worth $400 billion more than a decade ago.

The top job at TotalEnergies, the French oil major, is held by a former civil servant; at Eni, by a colourful Italian.

The two have outperformed their British rival.

BP, once in effect a branch of the British state in the Middle East, now mirrors its decline.

Whitehall talks about “delivering at pace”; BP, about “moving at pace”. Neither goes anywhere.

Manifold destiny

The psychodrama at BP could not have been better designed to embarrass Britain’s business elite.

One view is that an outsider was appointed to shake things up at a national champion before being pushed out unceremoniously by a club of grandees who talk about change without really wanting it.

An alternative reading of Mr Manifold’s tenure is about as bad: an amateur with little experience in the industry thought he knew better than the experts and came unstuck.

The big American firms would hardly hand such power to someone new to drilling.

The main problem with reforming Britain’s business elite is that it doesn’t really have one.

Those in America, Japan, France and Germany are all easily pictured. But Britain?

Its once-mighty merchant banks have disappeared. So have its fund managers.

Its biggest companies, like BP, have mostly become a global clearing house for mediocre management talent.

The City nowadays is best viewed as a battleground between European collectivist politics and American finance.

Capitalist villains such as oil companies, tobacco giants and banks make up much of Britain’s stock market. But the top investment banks and funds fly the American flag.

The saga at BP is a case in point. It threw itself zealously into net zero.

Now it is being disciplined, mostly by Elliott Management, an American hedge fund.

A very British shambles — and an international joke.