Watching Tony Hayward last week it became apparent to me that BP is turning its attention to its other big leak, the really important one… the money. The people at BP have a real serious problem in the Gulf, but they have a much bigger leak word wide. As big as BP is, it is still finite. There is just so much money and then its over. Also as BPs money and asset value dwindles so does its clout around the world. A weakened BP, once a formidable enemy and competitive adversary in the oil business, becomes a target. There is no love lost in the oil business. These are mean tough business people. You will notice the lack of compassion from the other big oil executives on Capital hill as they willingly thru BP under the buss. No love here. Of course they wouldn’t drill the well like that, of course they have better safety plans and of course they wouldn’t take short cuts just to save money. All nice until the media turned up their safety plans that were just as ridiculous as BP’s.
Hayward typifies the problem many businesses have. The guy running the show has no idea what’s going on. He has a bean counter mentality and leaves those nasty details like safety and protecting the environment to the lowly. Hayward was cannon fodder for the political hacks in Washington. At brief moments you could almost see the rage in Hayward’s eyes. Some of those posturing politicians may very well see a well funded opponent in their next election bid.
How does BP begin an exit strategy? Small business people are not exactly the bastions of honesty. It will be difficult to sort out the fraud from the realistic. The new claims program forced into place by the Obama administration will help provide some cover. If I were BP I would require all claims to include the last two years federal income tax filings. That will probably eliminate a third of the claims and cut the rest of the claims in half. State and local governments are not much better. Strapped for cash, they must resist the temptation that BP is the goose laying the golden eggs. BP can’t openly call these people thieves and cheaters …yet. But don’t be surprised when they finally do.
With every politician pounding on them, BP is looking for an out. BP cannot stand by and willingly fork out money to every whining small fishing boat operator and tourist shop around the Gulf Coast. There are people buying fishing boats so they can make a claim. The money leak has got to be plugged or BP will become a victim of its own mess. The environment not withstanding, BP is not about to become a sacrificial lamb or pelican as the case may be. From Iran to Texas to many oil people and investors have too much to loose. That is not the way this will play out.
There are already reports of BP playing hard ball with the media, and with claims. That will only get worse. Here’s the point. Sometime in the not to distant future, weeks not months, BP has got to start walking away from this. They must turn their attention to their own survival. Look for the new public face of BP to be a bit firmer. More like your typical oil baron. All of those nice TV ads saying we will be here until this is over are probably leaving out an important point; BP not the Obama administration will determine when it is over.