Bold new frontier for BP already looks a steppe too far



BP has jumped straight from the frying pan of Deepwater Horizon into the fire of Russian corporate politics.

The next few weeks will determine whether the accident-prone oil company, in its search for a new growth strategy after last year's disaster in the Gulf of Mexico, which killed 11 people and led to widespread environmental damage off America's southern coast, will be able to pursue an alliance with the Russian state-owned oil company, Rosneft.

At the moment, the chances that the Russian deal will be the lifesaver imagined by its architect, BP's new chief executive Bob Dudley, look decidedly slim.

You can forgive Mr Dudley his enthusiasm for wanting to look outside the world's traditional oil exploration fields.

The opprobrium BP earned after Deepwater, and the company's clumsy attempts to deal both with the physical problem on the Gulf seabed and the reputational problem stoked by its then boss, Tony Hayward, meant Mr Dudley wanted to lessen BP's reliance on Gulf and deep offshore exploration.

That decision was given a new urgency just a month ago, when the Libyan uprising put paid to BP's plans to drill in the deep waters off the country's Mediterranean coast. BP's options were becoming increasingly limited.

However, the choice of Russia as the new focus for expansion showed a certain masochistic tendency on Mr Dudley's part.

The Mississippi-born executive had experienced a hard time in the country in 2008 when BP's first strategic alliance with a grouping of oligarchs had gone sour. In fact, he had to leave Russia to avoid more serious involvement with the country's legal system.

BP's partner then was a grouping called AAR, owned by Russian businessmen Mikhail Fridman, Viktor Vekselberg and German Khan. They were 50-50 partners in TNK-BP, the vehicle for BP's business in Russia.

All three trace their business origins to Russia's chaotic emergence from the Soviet era, when fortunes were amassed by a variety of means as ownership of state assets went up for grabs to the most ruthless bidder.

One of them, Mr Khan, is on record as admitting the US mafia film The Godfather was his "manual for life".

You do business with these people very carefully, and as remotely as possible.

After long-running disputes over dividend policy and other matters, AAR and BP eventually declared a truce and a "pragmatic" solution to the problems that had bedevilled their relationship. But the Rosneft deal, announced in January, opened up the old wounds again.

At first sight, it looked a great deal for BP. Through a US$16 billion (Dh58.77bn) share swap with the Russian oil company (whose own history demonstrates a disregard for normal western standards of corporate governance) BP got itself the biggest possible ally in the country, the government, and a deal to jointly develop the Arctic region, perhaps the greatest unexplored region left on Earth.

Cynical observers thought that BP, pessimistic of long-term peace with AAR, had decided to put itself under the protection of the Russian state; others said AAR's reaction to the deal showed they were never interested in peace anyway.

Whichever, the oligarchs immediately came out against the deal. They said they too should be allowed to participate in the Arctic bonanza, and argued that the deal with Rosneft broke the terms of their partnership with the British oil company in TNK-BP. Last week, a Swedish arbitration tribunal, to which both parties had applied for binding adjudication, decided AAR was in the right, and blocked the deal with Rosneft.

Mr Dudley is left with the option of proceeding with the share-swap element of the Rosneft deal, with no guarantee it will be part of whatever Arctic exploration pact is eventually agreed. That does not thrill BP shareholders, who would rather see $8bn of BP capital used in a more productive way than as a minority partner in a Russian state-owned company.

The share price, savaged by the events in the Gulf last year, had been slowly recovering, but has given up many of those gains since the Rosneft deal was announced. Shareholders will get their chance to grill Mr Dudley at his first annual meeting as chief executive in three weeks' time.

More environmentally minded investors might also question why BP ever wanted to be part of the Arctic bonanza, which many experts believe is an ecological disaster in the making.

The omens are not good that BP will emerge from this mess with any credit. To be caught between Mr Putin and the AAR troika seems to be a strategic error on a grand scale.

Company%20Profile
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Where to donate in the UAE

The Emirates Charity Portal

You can donate to several registered charities through a “donation catalogue”. The use of the donation is quite specific, such as buying a fan for a poor family in Niger for Dh130.

The General Authority of Islamic Affairs & Endowments

The site has an e-donation service accepting debit card, credit card or e-Dirham, an electronic payment tool developed by the Ministry of Finance and First Abu Dhabi Bank.

Al Noor Special Needs Centre

You can donate online or order Smiles n’ Stuff products handcrafted by Al Noor students. The centre publishes a wish list of extras needed, starting at Dh500.

Beit Al Khair Society

Beit Al Khair Society has the motto “From – and to – the UAE,” with donations going towards the neediest in the country. Its website has a list of physical donation sites, but people can also contribute money by SMS, bank transfer and through the hotline 800-22554.

Dar Al Ber Society

Dar Al Ber Society, which has charity projects in 39 countries, accept cash payments, money transfers or SMS donations. Its donation hotline is 800-79.

Dubai Cares

Dubai Cares provides several options for individuals and companies to donate, including online, through banks, at retail outlets, via phone and by purchasing Dubai Cares branded merchandise. It is currently running a campaign called Bookings 2030, which allows people to help change the future of six underprivileged children and young people.

Emirates Airline Foundation

Those who travel on Emirates have undoubtedly seen the little donation envelopes in the seat pockets. But the foundation also accepts donations online and in the form of Skywards Miles. Donated miles are used to sponsor travel for doctors, surgeons, engineers and other professionals volunteering on humanitarian missions around the world.

Emirates Red Crescent

On the Emirates Red Crescent website you can choose between 35 different purposes for your donation, such as providing food for fasters, supporting debtors and contributing to a refugee women fund. It also has a list of bank accounts for each donation type.

Gulf for Good

Gulf for Good raises funds for partner charity projects through challenges, like climbing Kilimanjaro and cycling through Thailand. This year’s projects are in partnership with Street Child Nepal, Larchfield Kids, the Foundation for African Empowerment and SOS Children's Villages. Since 2001, the organisation has raised more than $3.5 million (Dh12.8m) in support of over 50 children’s charities.

Noor Dubai Foundation

Sheikh Mohammed bin Rashid Al Maktoum launched the Noor Dubai Foundation a decade ago with the aim of eliminating all forms of preventable blindness globally. You can donate Dh50 to support mobile eye camps by texting the word “Noor” to 4565 (Etisalat) or 4849 (du).

COMPANY PROFILE
Name: HyperSpace
 
Started: 2020
 
Founders: Alexander Heller, Rama Allen and Desi Gonzalez
 
Based: Dubai, UAE
 
Sector: Entertainment 
 
Number of staff: 210 
 
Investment raised: $75 million from investors including Galaxy Interactive, Riyadh Season, Sega Ventures and Apis Venture Partners
'Ashkal'
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Moon Music

Artist: Coldplay

Label: Parlophone/Atlantic

Number of tracks: 10

Rating: 3/5

RESULTS

1.45pm: Maiden Dh75,000 1,200m
Winner: Lady Parma, Richard Mullen (jockey), Satish Seemar (trainer).
2.15pm: Maiden Dh75,000 1,200m
Winner: Tabernas, Connor Beasley, Ahmed bin Harmash.
2.45pm: Handicap Dh95,000 1,200m
Winner: Night Castle, Connor Beasley, Satish Seemar.
3.15pm: Handicap Dh120,000 1,400m
Winner: Mystique Moon, Sam Hitchcott, Doug Watson.
3.45pm: Handicap Dh80,000 1,400m
Winner: Mutawakked, Szczepan Mazur, Musabah Al Muhairi.
4.15pm: Handicap Dh90,000 1,800m
Winner: Tafaakhor, Sandro Paiva, Ali Rashid Al Raihe.
4.45pm: Handicap Dh80,000 1,950m
Winner: Cranesbill, Fabrice Veron, Erwan Charpy.

APPLE IPAD MINI (A17 PRO)

Display: 21cm Liquid Retina Display, 2266 x 1488, 326ppi, 500 nits

Chip: Apple A17 Pro, 6-core CPU, 5-core GPU, 16-core Neural Engine

Storage: 128/256/512GB

Main camera: 12MP wide, f/1.8, digital zoom up to 5x, Smart HDR 4

Front camera: 12MP ultra-wide, f/2.4, Smart HDR 4, full-HD @ 25/30/60fps

Biometrics: Touch ID, Face ID

Colours: Blue, purple, space grey, starlight

In the box: iPad mini, USB-C cable, 20W USB-C power adapter

Price: From Dh2,099

COMPANY%20PROFILE
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WHAT%20MACRO%20FACTORS%20ARE%20IMPACTING%20META%20TECH%20MARKETS%3F
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Brief scoreline:

Wales 1

James 5'

Slovakia 0

Man of the Match: Dan James (Wales)

Manikarnika: The Queen of Jhansi

Director: Kangana Ranaut, Krish Jagarlamudi

Producer: Zee Studios, Kamal Jain

Cast: Kangana Ranaut, Ankita Lokhande, Danny Denzongpa, Atul Kulkarni

Rating: 2.5/5

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