U.S. Fury at BP Stirs Backlash Among British
By SARAH LYALL and JULIA WERDIGIER
Copyright by The New York Times
Published: June 10, 2010
LONDON — Spewing oil and alienating Americans with its chief executive’s impolitic remarks, BP may be Public Enemy No. 1 in the United States. But in Britain, where the company is a mainstay of the stock market and a favorite of pension funds, investors and politicians are becoming increasingly angry at the blistering attacks from across the Atlantic.
BP’s share price, even after recovering some ground in New York trading on Thursday, has fallen more than 40 percent since the environmental catastrophe in April, and some analysts say the crisis could lead to the takeover or even the bankruptcy of one of Britain’s most valuable and iconic companies.
In that atmosphere, the stream of condemnations from Washington has stirred a protective backlash, even in this closest of American allies. Boris Johnson, the Conservative mayor of London, said Thursday that he was worried about “anti-British rhetoric” and “name-calling” from American politicians.
“When you consider the huge exposure of British pension funds to BP, it starts to become a matter of national concern if a great British company is being continually beaten up on the airwaves,” Mr. Johnson told BBC radio’s Today program.
Prime Minister David Cameron refused to criticize the United States, however, saying he sympathized with its “frustration” in dealing with its worst environmental disaster in memory. But the chancellor of the Exchequer, George Osborne, signaled careful support for BP, saying that he had spoken to its chief executive, Tony Hayward, and that it was important to remember “the economic value BP brings to people in Britain and America.”
BP is the third largest oil company in the world, after ExxonMobil and Royal Dutch Shell, with 80,000 employees worldwide as of last December, sales of $239 billion in 2009 and a market value — even after the recent losses — of more than $100 billion. At a time when Britain is desperate to reduce its deficit, BP is a huge contributor to British tax revenue, paying nearly $1.4 billion in taxes on its profits last year.
Its reputation for reliability and its generous dividends have long made it a favorite of British pension funds. The company’s dividend payments accounted for about 13 percent of the dividends handed out by British companies last year, according to FairPensions, a London-based charity.
Some Britons are irked at President Obama’s seeming determination to refer to the company as “British Petroleum” — even though it jettisoned that name in favor of initials years ago. In any case, they point out, it is truly a multinational company, traded on both the New York and London stock exchanges, with British and American nationals on its board of directors.
BP also has extensive holdings in the United States. It merged with Amoco, the former Standard Oil of Indiana, in 1998, and about 40 percent of its shares are held by American investors. It owns a refinery in Texas City, Tex., that is one of the world’s largest, and a 50 percent interest in the Trans Alaska Pipeline, in addition to a huge gasoline marketing operation.
But alarms went off in Britain when President Obama said earlier this week that he would have fired Mr. Hayward, BP’s chief executive, if Mr. Hayward worked for him and that he was looking for “whose ass to kick” in connection with the disaster. The Justice Department did not help matters when it said Wednesday that it was planning to take action to force BP to withhold its next dividend payment.
Iain Armstrong, an analyst at Brewin Dolphin, an investment manager here, said that the situation had become “overpoliticized” and had confused the markets about BP’s actual strength.
“It’s gotten completely out of hand,” he said. “Ironically, by being extremely strong financially, BP has become a target.”
In an attempt to soothe panicking investors and dispel fears that it could face bankruptcy or be forced to put itself up for sale, BP said Thursday that it had “significant capacity and flexibility in dealing with the cost of responding to the incident, the environmental remediation and the payment of legitimate claims.” Speaking of its performance on the stock market since Wednesday, it said it was “not aware of any reason which justifies this share price movement.”
Many Britons are upset at what they see not just as the economic costs of American anger, but also at language they say demonizes Britain, America’s partner in the so-called special relationship — loose talk that taps into the British suspicion that Americans are insular and overly nationalistic.
Writing on his Web site, a Conservative peer, Lord Tebbit, called the American response “a crude, bigoted, xenophobic display of partisan, political, presidential petulance against a multinational company.”
Comments on British message boards this week have been full of anger at the United States and disillusionment at Mr. Obama, a wildly popular president here until now.
“The rest of the world is fed up with the parasitic attitude of the U.S.,” went one representative comment on the Daily Telegraph Web site. “As a Dutch citizen, I used to be a supporter of the U.S., but not anymore. You want the oil? You clean up the mess.”
Even as Mr. Obama has been attacked at home for his mild manner, so has Mr. Cameron, the new prime minister, been criticized here for not standing up more forcefully to the United States as BP’s fortunes have continued to plummet.
“The government must put down a marker with the U.S. administration that the survival and long-term prosperity of BP is a vital British interest,” Sir Christopher Meyer, a former British ambassador to the United States, told the BBC.
But Mr. Cameron himself, apparently eager not to offend his American ally, took a mollifying tone. He said he would discuss the situation with Mr. Obama when the two next spoke, in a scheduled telephone call this weekend.
“I completely understand the U.S. government’s frustration, because it’s catastrophic for the environment,” he told reporters during a trip to Afghanistan. “BP needs to do everything it can to clear up the situation. The most important thing is to mitigate the effects and get to the root of the problem.”
On Thursday in Washington, the Obama administration tried to play down the diplomatic tensions, saying the issue was purely between a private company and the United States government. “This is not about the relationship between the United States and its closest ally,” a State Department spokesman, P. J. Crowley, told reporters.