And other moves smelled politics too. After the hearing, Hayward swiftly moved away from the scene. Carl-Henric Svanberg, the chairman of the BP announced in the immediate aftermath of the grilling, that Hayward would step away from daily involvement in BP’s response efforts in the gulf. He underlined that after eight weeks of being on the scene, Hayward “is now handing over the operations, the daily operations, to Bob Dudley.” Robert Dudley, an American oil executive has been the managing director of BP since 2009.
After all BP needed an American face to counter the onslaught. With political pressure building up on the Capitol Hill, being an American, Dudley could be a more acceptable face, most felt.
In another move, stinking of politics, almost at the same time BP committed to set up a $20 billion escrow account to meet the growing liabilities attributed to the Gulf of Mexico oil spill. The fund does not include BP's costs for repairing the environmental damage done by the oil spill nor fines and penalties the company may eventually have to pay. BP has also agreed to set up a $100 million fund for unemployed oil workers affected by the closure of deepwater rigs in the Gulf.
The creation of an escrow account was at least a solution to the stand-off between BP and the US administration, with President Obama portraying the fund as a vehicle through which compensation could be paid to victims of the Gulf of Mexico spill, while the company can pursue a truce with the White House. There was definite politics involved in it — one could deduce with indeed less fear of denial.
And while all this was taking place, good, old, acquaintance Christof Ruehl, the chief economist at BP, was busy preparing and presenting another document — the 59th annual statistical review. And although, this was the regular, much sought after and respected document, that BP has been publishing for more than half a century now, yet there was hints of politics in this document too. And BP was conscious of the fact. "The world's largest increase in oil production by far came from the US, mainly from the Gulf of Mexico. This is not an excuse for anything, but a piece of the reality in which we all live," underlined Tony Hayward, in his introduction to the statistical review.
BP annual review made it clear to the skeptics that the world definitely needs more crude in the years to come and that more new oil was produced in the Gulf of Mexico last year than any other region in the world. The review pushed ahead with the notion of the necessity to explore "difficult" — harder to extract — oil, saying world needed this oil to meet its future needs. One could not deny that, with the role of Gulf of Mexico in the overall energy equation underlined, there was a definite political tone to the document too.
The area is already the most lucrative region for exploration in America. There are indications that permanent moratorium on new drilling could cut production in the region by up to 300,000 barrels per day — or a quarter of its output — over the next five years. The growing importance of the US Gulf oil sector as highlighted in the BP review, underlined that American crude production was rising faster than anywhere else in the world. The 7 percent increase to 7.2 million barrels a day is largely attributed the company's chief economist, to the ramping up of new fields in the Gulf of Mexico, although it also includes shale and other oil deposits, Ruehl made it clear.
However, the spill overshadowed some of the other very interesting facts presented in the annual BP document. While underlining that the global oil consumption fell by 1.2 million bpd or 2.6 percent in 2009, the largest since 1982, yet the "global oil demand is no longer declining and appears to be on the rising path in 2010," Ruehl clarified while launching the report. And this meant more oil could be required for the world and that there was no escaping from accessing oil in remote and difficult areas — such as the Gulf of Mexico — one can’t help deducing after going through the report. "The world needs to invest today to be able to deliver the energy needed tomorrow."
The review also reports the proven oil reserves rising to 1,333.1 billion barrels at the end of 2009, including Canadian oil sands under active development and an upward revision in official Venezuelan reserves.
Global reserves are sufficient to meet 2009 production for 45.7 years. On the same basis, reserves of gas are sufficient for 62.8 years and coal for 119 years, the report emphasized. Peak Oil is not coming any soon, one could definitely underline here.
The BP statistics also reiterated the growing role of the emerging economies. Ten years ago the developing world consumed 42 percent of all energy but now the figure is up to 52 percent, the report said. And "in 1999, China's energy consumption per capita was just 20 percent of the UK's level; in 2009 it reached 50 percent." Things are changing and changing fast. Old conception are being sidelined to the dustbin of history and new ones are coming to fore in this changing world.
With politics underlining virtually every move, there is no escaping the fact that politics and big oil go hand in hand — together.
