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Return of Lord Oil Slick: Why has Cameron handed this Labour luvvie such a key job?
By Tom Bower
Last updated at 3:41 AM on 3rd July 2010


'Efficiency Czar': Lord Browne is charged with finding the £6.2bn in public spending cuts promised in the budget
Last Monday, amid the elegant surroundings of Dartmouth House in London's Mayfair, Lord Browne of Madingley, the dapper former chief executive of BP, gave a lecture about 'inspiration and vision in business'.
At ease in front of 60 hand-picked guests, the ultra-smooth tycoon shrugged off all personal responsibility for the company's unfolding catastrophe in the Gulf of Mexico.
He brushed aside critical questions about the poisoned legacy he bequeathed his beleaguered successor Tony Hayward.
As his audience sipped wine after the speech and Lord Browne signed copies of Beyond Business, his decidedly one-sided and self-promoting autobiography, it was hard not to notice a swagger in the tycoon's figure.
For three years after ignominiously resigning from BP in a scandal following his admission that he had lied in court, Lord Browne knew that the Conservative Government was preparing to resurrect his tarnished career.
Two days later it was announced that the man nicknamed 'sun King' - because of his regal affectations - was to be Whitehall's new 'Efficiency Czar', charged with finding the £6.2 billion in public spending cuts promised in the Budget.
Despite being widely blamed for the original decisions that resulted in the devastating Gulf oil spill - now putting BP's very existence in doubt - and in the process costing Britain's pension funds billions of pounds (because of their huge investments in the firm), Lord Browne has been asked to bring his same cost-cutting brain to Britain PLC's state spending.
Let's just hope he's learnt from his experience at BP, where he presided over a corporate court filled with sycophants and where there was an unhealthy glorification of a boss who enjoyed unlimited expenses to fund his lifestyle (with even his teddy bear being flown at the company's expense from California to London).
But there are those who fear another Lord Browne-inspired disaster in his new role. In the judgment of Lee Raymond, former boss of BP's rival, ExxonMobil: 'Browne's a bandit!'

The ultimate cost of BP's Gulf spill will be more than $20 billion in compensation paid to those whose lives have been ruined by the pollution, as well as huge damage to BP's reputation as a world-class business.
How different it all was 12 years ago. After his appointment as BP boss in 1998, Lord Browne swiftly transformed the firm from a dying oil corporation with just two fields - in Alaska and the North sea - into the world's second largest behemoth.

By re-focusing on so-called 'elephants' (the big oil reservoirs) and ruthlessly cutting costs, his mastery of financial engineering used BP's rising share price to launch audacious take-overs of failing oil companies, especially in America.
His success earned worldwide plaudits.
After re-branding BP as 'Beyond Petroleum' - the world's most environmentally friendly oil company - he boasted during visits to Washington that BP was not only the largest producer of oil in America, but also the most successful explorer in the Gulf of Mexico, one of the most difficult places to extract oil.
Environmental disaster: Crews battle the blazing remains of the Deepwater Horizon rig in the Gulf of Mexico
BP also expanded its operations in Russia, Asia and South America.
However, it was Lord Browne's ambition to overtake ExxonMobil and transform BP into the world's biggest oil corporation that sowed the seeds of disaster.

Success depended on BP earning high profits, which could be used to set up a merger with shell. Lord Browne went for broke by cutting costs.

His philosophy was 'more for less': operations would be completed at a cost that was 10 per cent cheaper than the previous time, and so on.
Taking his cue from New Labour, targets became the Holy Grail. In July 2000, he announced that production would annually grow over three years by 5.5 to 7 per cent, mostly in the Gulf of Mexico and Angola.
This optimism was hailed and BP's share price soared. But, in fact, BP's growth turned out to be only 2.9 per cent and BP could hit its targets only by more ruthless cost-cutting.
Hundreds of engineers were sacked. Budgets for safety and maintenance were slashed. Skilled oil men resigned in disgust.
While Lord Browne was busy rebranding BP with a new 'green' logo (a typically vacuous - and expensive - New Labour gimmick), Doug Ford, an American responsible for BP's refineries, attacked what he believed was an increasingly badly-run organisation.
After Lord Browne ignored his warnings about the consequences of cost-cutting, Mr Ford resigned and others followed.
Lord Browne fan: The BP boss was described as Tony Blair's 'favourite businessman'
Those who stayed on but disagreed with Lord Browne' s strategy were removed.
Unwilling to tolerate criticism, Lord Browne favoured only 'the turtles' - the sycophants trusted to deliver his targets. Tony Hayward was one of the chosen ones.
Meanwhile, Mr Ford was replaced by John Manzoni, an accountant and Lord Browne 'turtle' with little understanding of the complicated engineering skills required to run refineries properly.
And to satisfy Lord Browne's 'more for less' mantra, Mr Manzoni zealously pruned safety and maintenance costs.
There followed an explosion at a refinery in Texas City in March 2005 when 15 sub-contractors were killed and 170 injured.
A U.S. government report into the accident blamed 'systemic lapses' by BP's management and budget cuts which had left 'unsafe and antiquated designs. . . in place, and unacceptable deficiencies in preventive maintenance were tolerated'.
This was America's biggest industrial accident for years, but Lord Browne played his cards brilliantly. Within hours, he dashed across the Atlantic on his private jet and met the families of the bereaved and survivors.
To defuse the antagonism towards BP, he accepted responsibility and offered generous compensation.
He knew he had a fight on his hands because evidence of BP's negligent maintenance of the refinery soon emerged and he was lambasted by the U.S. government's safety agencies and in Congress.

Lord Browne survived by calling in favours from Washington's politicians who had, in the past, accepted BP's donations and by paying lip-service to demands to invest in more maintenance. But he rejected the criticism and continued to replace BP's experienced engineers with sub-contractors.
While rivals ExxonMobil hired more engineers, Lord Browne ditched BP's in-house expertise.
All this saved money but badly corroded BP's traditional culture of competence and safety. Instead of concentrating on the core business of oil engineering, Lord Browne was obsessed by his dream of overtaking ExxonMobil, which meant that financial engineering, not pipe-welding and safety valves, was his priority.
A year later, this flawed policy was exposed again.
A big oil spill in Alaska was caused by BP's failure to prevent corrosion of pipelines. By cutting maintenance, employing cheap sub-contractors and covering up reports warning of possible dangers, 6,400 barrels of oil polluted two acres of pristine tundra.
Successor: Tony Hayward replaced Lord Browne as BP head, inheriting a poisoned chalice of cost-cutting
Lord Browne apologised again, but this time Congressional investigators said there was negligence and suggested that incriminating evidence had been suppressed.
This was compounded by the revelation that BP dealers had manipulated the financial markets trading in oil and gas.
The Sun King's reputation was sinking fast. Peter Sutherland, BP's highly respected Irish chairman, became exasperated by Lord Browne's behaviour and unhappy with his excuses.
There were worries that the corporation's leadership was lacking the integrity expected of a global giant. As the old saying goes: 'The fish rots from its head.'
To save BP's reputation, Mr Sutherland decided that Lord Browne should retire. But he didn't anticipate the difficulties involved. By now Lord Browne had ingratiated himself with the New Labour establishment and was widely described as 'Blair ' s favourite businessman'.
Although his only interest in politics appeared to be self-interest, he had cleverly put several Labour politicians and activists on BP's payroll.
This, he hoped, would lead to government favours, and, much to his irritation, also resulted in BP being nicknamed Blair Petroleum.
New appointment: David Cameron is hoping that Lord Browne can bring his cost-cutting brain to bear on the nation's debt
Among these appointments were Baroness Smith, the widow of former Party leader John Smith, who became director of BP's Scottish Advisory Board, and Anji Hunter, Blair's former No 10 'gatekeeper', who was made BP's director of communications.
Neither woman knew anything about oil or finance, but both enjoyed privileged access to Blair's inner sanctum - vital to Lord Browne, who wanted government support for BP to open up new oil fields in the North Sea.
In return, he was always welcomed by Blair and was grateful for the award of a peerage in 2001. Lord Browne entertained Blair at his Chelsea house and allowed Labour's elite to criss-cross the globe in BP private jets.
Yet BP's reputation continued to take a battering. In America, in 2006, it admitted criminal damage over the Alaska spill and was fined $70 million.
was the last straw for BP's board, which decided that Lord Browne should leave in July 2008, cushioned by a £32 million compensation deal.
But before this date was reached, Lord Browne was torpedoed by his own dishonesty. While on holiday in Barbados, the BP boss discovered that Jeff Chevalier, his former boyfriend, had contacted the Mail On Sunday.
Although homosexuals were unusual in the macho oil industry, Lord Browne's sexuality had never been concealed from BP's board - although he himself never made it public knowledge because he wanted to protect his ageing mother from the truth.
However, the end of his four-year relationship with Chevalier had become very messy, with Lord Browne alleging that his former lover tried to blackmail him.
In a desperate bid to stop Mr Chevalier going public about their relationship, an injunction was obtained to stop the story being published.
In the course of these court proceedings, Lord Browne lied to a High Court judge in order to try to protect himself from the scrutiny of shareholders and the BP board over this relationship.

He also lied by claiming Mr Chevalier had drug problems and about the circumstances of their meeting, Lord Browne insisted they had met while exercising in Battersea Park whereas the truth was that he had found Mr Chevalier on a gay website called suitedandbooted.com.

Eventually, a clearly furious High Court judge ruled that Lord Browne 'chose to lie to the court' and refused to continue the injunction.
His dishonesty exposed, Lord Browne bowed to the inevitable. After 41 years service, he abruptly resigned, losing about £15 million of his expected benefits.
Disgraced and humiliated, his pampered world collapsed, but he sought refuge with powerful friends in New York and London.
He opened an investment fund in Manhattan, was appointed chairman of the Tate Gallery in London and as part of his rehabilitation wrote an autobiography 'to set the record straight'.
But while promoting the book, new doubts were raised about his integrity.
With regard to his homosexuality, he wrote that he was 'terrified of being found out' - adding: 'I was certain that if people in BP had known that I was gay, it would have been the end of my career.'

Yet that was utterly untrue, as the then-chairman Peter Sutherland was the first to make clear to people.

Also, Lord Browne's account of the explosion at BP's Texas City refinery was open to question. He wrote that 'safety was a top priority'. But this contradicted a U.S. government report that concluded safety was compromised.
Similarly, in his version of the Alaskan oil spill, he wrote: 'Our team believed that our monitoring and repair methods were the best applicable technology'.
However, that was not borne out in the testimony to Congress by Steve Marshall, BP's senior executive in Alaska.

Mr Marshall admitted that deliberate cost-cutting had prevented the use of anti-corrosion machinery, risking a serious accident.
U.S. Congressman Joe Barton had also accused BP of dishonesty, saying: 'I am concerned about BP's corporate culture of seeming indifference to safety and environmental issues.
'And this comes from a company that prides itself in their ads on protecting the environment. Shame, shame, shame.'
Tony Hayward, Lord Browne's successor as chief executive, soon found he'd inherited a poisoned chalice.
He realised that to save BP required a massive change of culture - particularly with regard safety and maintenance.
But he lacked either the resolve or personality to drive through the radical reforms needed.
It was no surprise that Mr Hayward was crucified by U.S. senators seeking an explanation why BP breached the safety regulations on more than 700 occasions compared to exxonMobil's single breach.
These had occurred during Lord Browne's last full year as chief executive.
Little wonder that with this scandalous record of irresponsible cost-cutting, critics are questioning whether the Labour luvvie Sun King is the best person to lead the Tory Coalition's war on public spending.
The Squeeze, Oil, Money & Greed In The 21st Century by Tom Bower is published by harperpress in paperback.


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