"It was, perhaps, the ultimate comeback," says The Times. Nearly three years ago, Bob Dudley was forced to flee Russia amid fears for his safety as head of TNK-BP the oil giant's joint venture with a group of Russian oligarchs after months of menace, intrigue and police raids.
Last week, he returned in triumph to sign a game-changing $16bn alliance with the state-backed firm Rosneft, to exploit Russia's Arctic reserves. As he took tea in Vladimir Putin's country dacha, he must have reflected that he was indeed "the boss who came in from the cold".
It would be hard to find a better candidate for the role than this soft-spoken US southerner with a steely core, says The Guardian. Intelligent and charming ("a decent man", say friends), Dudley is an oil industry veteran with a naval background, renowned for keeping his cards close to his chest. Even opponents rate his sang-froid. When he replaced Tony Hayward as chief of BP in July, the first to congratulate him were the group of Russian oligarchs who had sought his destruction; "recognition from some of the toughest businessmen in the world that they admire Dudley's calmness under fire". Dudley's typically smooth take was that he always knew it was nothing "personal".
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Born in 1955 on a naval base in Queens, New York, where his father (an officer who specialised in physics) was based, Dudley spent his boyhood in Mississippi, regularly holidaying in the Gulf of Mexico an experience that later "proved invaluable in his attempts to show he understood the anger over the spill", says the FT. He hoped to follow his father into the navy, but a chronic shoulder injury forced him to quit naval college.
Seeking a career "in which he would see the world", he studied chemical engineering and management and, in 1979, signed up with Amoco. Over the next 20 years, Dudley travelled to Scotland, China and Russia, developing fields and doing deals. Fluent in Russian, he describes himself as "a citizen of the global oil and gas industry".
When Amoco merged with BP in 1998, Dudley caught the eye of the oil giant's chief, Lord Browne, and joined the group of rising stars mockingly known internally as "teenage mutant ninja turtles". Rated for his unusual combination of first-rate engineering skills and deft handling of corporate politics, he was a shoo-in to lead Browne's speculative investment in Russia's oil industry in 2003. Yet within five years, the Russian shareholders in TNK-BP went to war, using various subterfuges to squeeze out BP's influence over the venture. Hounded out at virtual gunpoint, Dudley tried to run the company in exile, before losing control of the partnership to the oligarch Mikhail Fridman.
There's no doubt Dudley made a hash of TNK-BP, says Tom Bower in the Daily Beast. Having "misjudged Russian politics", he suffered a "humiliating" defeat. But as Putin remarked when asked about BP's reliability after the Gulf spill: "Wit once bought is worth twice taught". Lessons have certainly been learnt from past mistakes. The same is probably true of Bob Dudley's relationship with Russia.
Is Russia BP's route to recovery, or a potential nightmare?
In normal circumstances, BP's deal with "dodgy Russians" would draw gasps from investors, says Lex in the FT. But after nine months of torrid publicity and a possible £50bn bill for the Macondo disaster, the deal seems "positively benign". "Having been shown the cold shoulder by Uncle Sam", BP needs this "warmer Russian bear hug" badly, says Rob Davies in the Daily Mail. Before the Gulf accident, BP had hoped to make the US its main source of growth. With all bets off there, Dudley was desperate to find a replacement. The unexplored Russian Arctic which could be as productive as the North Sea fits the bill. "Dudley has set the wheels in motion on BP's road to recovery."
The deal has sparked "a furious backlash in the US". Senior Congress figures, worried about its implications for American national security, have dubbed BP "Bolshoi Petroleum", says The Independent. Environmental campaigners are also on the war-path, as are human rights campaigners who note that Rosneft currently chaired by Russia's deputy PM Igor Sechin was the principal beneficiary of assets "stolen" from Yukos (whose former leader, Mikhail Khodorkovsky, was recently convicted for a second time of "patently political" charges). With the oligarchs behind TNK-BP also up in arms, the situation could turn sour, especially as the tangible fruits of this deal are at least a decade off. Dudley is making two bets, says Nils Pratley in The Guardian. "First, that Rosneft's murky history won't bite BP one day. Second, that the Russian government will always play fair." You can understand why BP's shares gave only a hesitant response to this supposed masterstroke. BP has "locked itself into an era of perpetual deal-making" in one of the world's most unpredictable territories.
-
Revolut finally bags a UK banking licence – what next for the fintech?Revolut has finally been granted a UK banking licence following three years of negotiations with the regulator
-
Could Labour impose a “double death tax” of more than 50%?Speculation is mounting that capital gains tax will be reformed in the Budget - and one option is to charge bereaved families the tax on top of inheritance tax. We explain how it could work
