Be more con-Vince-ing
Parliament returns next month with a familiar challenge waiting for its political leaders: remaking the system in their own image.
For Burnham, as we've discussed in previous notes, that means imposing his will on a skittish parliamentary party and a government machine with habits and interests of its own. For Farage, it may be more about building a team altogether – but more on that another time. Strong leaders burn time and capital learning that changing direction is often easier than persuading the institution around them to change with it.
Over the summer, BP has offered two versions of how that can go.
Manifold destiny
As Chairman at BP Albert Manifold was determined to do things differently. He played an important role in bringing in the first ever external chief executive in the organisation’s history. Meg O’Neill’s arrival from Woodside may yet turn out to be a masterstroke. It also appears to be all Manifold had time for.
By May he was gone, leaving in his wake statements about being cast out for trying to tackle an institutionalised management accustomed to living high on the hog.
O’Neill has pushed through sweeping changes of her own, reorganising BP around Upstream and Downstream and making a virtue of simplicity. BP is once again being run recognisably as an oil and gas company, with a stated ambition to become “simpler, stronger and more valuable”. And unlike Manifold, she has managed it without the BP beast bucking.
That is impressive. The danger for a company like BP is that prolonged exposure to government and regulatory pressure can leave parts of the organisation thinking more like future NEDs of DESNZ than executives of an energy company. Changing that culture is unlikely to be frictionless.
But it reminds us of a timeless lesson: being seen to battle the machine is not the same thing as bending it to your purpose. Better to achieve what you need than make the struggle itself the measure of conviction.
Fan the flames
The clarity O’Neill has brought to the internal structure highlights an area that continues to lag behind: BP’s public advocacy for itself.
Its proposed withdrawal from the North Sea is a useful example. O’Neill has tended to stop at the commercial case, describing it largely as a question of portfolio focus and where BP can best deploy its capital, implicitly making clear to government that the fiscal environment matters to future investment.
Others have been rather less shy about filling in the politics. Newspapers sceptical of net zero have readily presented the retreat as a consequence of short-sighted British energy policy.
Nature abhors a vacuum. Into it has stepped a keffiyeh-toting, Labour-donating, woke-net-zero-ultra. Or a multimillionaire, pragmatic energy industry leader and businessman. Dale Vince contains multitudes. His argument is hardly BP’s: he wants Rosebank and Jackdaw approved under a system of price controls. But it is a sophisticated message. By conceding the practical reality that Britain will continue using fossil fuels for decades, Vince gives himself room to sound pragmatic while making the case for the settlement he wants.
Vince can do that, surely BP can make its own case from a positive angle: energy security, cost of living and lower bills? Michael O’Leary has long practised a less sophisticated version of the same thing. He is rarely embarrassed to say that a regulation costs Ryanair money, before explaining why that ultimately means higher fares for you. Self-interest does not invalidate an argument; often it shows you are willing to treat your audience as adults.
Indeed, producing more North Sea oil fulfils without much of a stretch all five of the conditions for growth the Chancellor set out last month: fiscal discipline, growth in every postcode, backing Britain, wealth creation and making life more affordable.
Some of BP’s caution is understandable as an inheritance from the strategy O’Neill is now dismantling. The company was trying to present itself as an “energy-transition” company while remaining one of the world’s largest producers of oil and gas. But that ambiguity offered little protection. BP could halve its oil production, or cut it off tomorrow. Its historic contribution would remain part of the case against it. Businesses repeatedly fail to grasp that if you pay the Danegeld, the ideological opposition will be back for more.
O’Neill has an opportunity to make the external proposition as simple as the internal one. It takes a long time to turn an oil tanker, which is why you start a long way out from the obstacle.
