| LONDON, April 27
LONDON, April 27 "Downing Street has discreetly
let it be known in the City that it would oppose any takeover of
BP," the Financial Times reported on Sunday.
The prime minister's office has signalled it would make life
difficult for any bidder, although no bid has been mooted yet,
the newspaper said ("UK ministers make Gallic gesture to keep
the British in BP", April 26).
The company formerly known as British Petroleum was
rebranded as the more neutral BP at the turn of the
millennium after absorbing U.S. oil firms Amoco and Arco.
But the company's identity remains complicated, at once BP
and British Petroleum, part of Britain's establishment but also
a footloose international oil major with operations around the
Much more than Royal Dutch Shell, with its historical link
to the Netherlands, BP is Britain's national oil company and
bears with it the country's hopes for a major post-imperial
BP continues to have a close relationship with Britain's
establishment - reaching beyond government ministers, who come
and go, right into the core of the permanent Whitehall
bureaucracy as well as the media and London's financial
When the company was pilloried by U.S. politicians as a
careless foreign operator in the wake of the Deepwater Horizon
oil spill in the Gulf of Mexico, the company took pains to play
down its Britishness and emphasise it was a good American
But at home, the company mounted an effective public
relations campaign to enlist support from ministers and the
British media to push back against what it presented as a
strategic threat to the United Kingdom. BP wrapped itself in the
national flag at home, while presenting itself abroad as a
post-national corporation of the world.
From the very beginning, British Petroleum, formerly the
Anglo-Iranian Oil Company and before that the Anglo-Persian Oil
Company, has had close links to the state.
The company owes its existence to an unusual government
investment of just over 2 million pounds into the firm in May
1914, masterminded by Winston Churchill, then serving as
Britain's minister for naval affairs.
Churchill was determined to ensure a reliable source of oil
for the Royal Navy from within Britain's empire to avoid a
dangerous dependence on the United States, Russia or the Dutch
East Indies ("The Royal Navy's Fuel Supplies 1898-1939", 2003).
The advantages of liquid petroleum over solid coal as fuel
for warships were "inestimable", Churchill wrote later ("The
World Crisis", 1938).
"But oil was not found in appreciable quantities in our
island. If we required it, we must carry it by sea in peace and
war from distant countries ... An unbroken series of
consequences conducted us to the Anglo-Persian Oil Convention,"
Persia was formally independent, but the country, especially
its southern half, where the oilfields lay, was firmly within
Britain's sphere of influence, while the north lay in Russia's.
Britain's investment gave the government a voting stake of
just over 50 percent in the company and provided capital at a
critical point when the firm was seeking to develop its new
fields in southwest Persia.
In exchange, the Royal Navy received a guaranteed supply of
oil below market prices and Britain's government received
hundreds of millions of pounds in dividends and tax revenues,
far more than Iran ever received ("Blood and Oil: A Prince's
Memoir of Iran from the Shah to the Ayatollah", 2005).
In 1951, when Iran nationalised the assets of the
Anglo-Iranian Oil Company, Whitehall helped organise a worldwide
boycott of Iran's oil sales (the forerunner of the current
sanctions regime) in a bid to reverse the nationalisation or at
least win substantial compensation.
Following nationalisation, Whitehall, encouraged by
Churchill, serving in his last term as prime minister, plotted
to overthrow Iran's democratically elected government, in a plan
codenamed Operation Boot.
In the end, it was the United States that took over the
plan, and fomented a coup in 1953, codenamed Operation Ajax.
Prime Minister Mohammad Mossadegh was overthrown and Shah
Mohammad Reza Pahlavi was installed as an autocrat, until he too
was overthrown in 1979 by Ayatollah Ruhollah Khomeini.
"Even in Persia, they were never quite convinced that I had
not come straight from Whitehall," Lord Strathalmond, chairman
of Anglo-Iranian between 1941 and 1956, recalled later
("Adventure in Oil: The Story of British Petroleum", 1959).
BP AND WHITEHALL
Nationalisation was traumatic but the company, renamed
British Petroleum, successfully reinvented itself by developing
new fields in Kuwait, Alaska, the North Sea and around the
The British government's remaining stake in British
Petroleum was eventually sold in 1987 as part of the
privatisation programme of the government of Prime Minister
But the company, renamed BP after the mergers of the late
1990s, has retained close links to the very apex of the British
government under both Conservative and Labour-led
For example, Anji Hunter, one of the most senior aides to
Labour Prime Minister Tony Blair as head of government relations
in the late 1990s, went on to become director of communications
for BP in 2002.
She also married one of the top political journalists at
broadcaster Sky News, and now works as a senior adviser to
public relations company Edelman.
Nick Butler, who worked for many years at BP, rose to become
group vice-president for strategy and policy between 2002 and
2007, before becoming a senior policy adviser in the prime
minister's policy unit at Downing Street in 2009-2010 under
Labour Prime Minister Gordon Brown. Butler now blogs for the
Ben Moxham, who served as director for policy and regulatory
affairs at BP and then vice-president at Riverstone Holdings,
the investment firm where former BP chief John Browne is a
partner, went on to be the senior adviser on energy and the
environment to Conservative Prime Minister David Cameron and
Liberal Democrat Deputy Prime Minister Nick Clegg between 2011
Browne himself, ennobled in 2001 as a member of the House of
Lords, the unelected upper chamber of Britain's parliament, has
undertaken a number of high-profile government assignments since
stepping down as head of BP in 2007.
Close relations between Whitehall and business, including
the exchange of personnel between the civil service and major
corporations, are normal in Britain, but no other company has
had such close links to the very top of government.
BP is not just another large company listed on the London
Stock Exchange that could be taken over by a foreign corporation
at the right price. It is part of the establishment.
BP's history is the story of the last days of the British
Empire. And with its reinvention after the Iranian crisis in the
1950s, BP has become the flag-bearer for Britain's hopes of
remaining a global player in the oil industry, albeit with a
much diminished role.
For BP to fall into foreign ownership, and cease to be
British Petroleum in fact as well as name, would intensify the
establishment's existential angst about Britain's future role in
the world and is simply unthinkable.
(Editing by Dale Hudson)