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COLUMN-BP prefers the Swedish model: Neil Collins

Published 06/25/2009, 06:36 AM
Updated 06/25/2009, 06:49 AM
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-- Neil Collins is a Reuters columnist. The views expressed are his own --

By Neil Collins

LONDON, June 25 (Reuters) - In many ways, chairman of BP is an impossible job. All Peter Sutherland's well-honed diplomatic skills failed to prevent a ritual humiliation in Russia over its joint venture, TNK-BP, so the appointment of his successor, announced on Thursday, caused much surprise and a little concern.

Carl-Henric Svanberg is neither a professional diplomat nor an oilman. He has done well enough as chief executive of Ericsson for the Swedish group's shareholders to be apprehensive at his departure, but his CV provides little evidence that he is the best man in the world to head BP.

He is an engineer, which will help inside a company which needs to find oil and devise smarter ways of getting it out. He is neither British nor American, which will help when it comes to dealing with regimes bruised by anglo-saxon perfidy.

BP's biggest challenges lie in establishing détente in Russia, the oil province on which the company's future hinges, and the Swedes have learnt to co-exist with the Russian bear over many centuries.

Svanberg is described in BP's statement as being personally committed to human rights, climate change and the United Nations Millennium Development goals (ending poverty and hunger, universal education, gender equality etc). None of these have much to do with BP's raison d'etre.

The boards of big companies are all about where the power lies, and this appointment will surely strengthen the position of chief executive Tony Hayward, whose career was unexpectedly accelerated by the abrupt departure of John Browne two years ago.

Ian Prosser, the chairman of BP's nominations committee, must be mightily relieved that the process appears to be over. He knows how fraught these things can be; his appointment as chairman-elect of supermarket group J Sainsbury in 2004 was vetoed by the shareholders, forcing an embarrassing climbdown.

When the name of American Paul Anderson, the former chief executive of BHP Billiton, was leaked "on a short list of two", it seemed as if Prosser had decided to test shareholder opinion before the announcement rather than after. Today's appointment shows that was wrong; BP prefers the Swedish model to the American.

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