Despite announcing profits of $25 billion yesterday, shares in the oil giant fell by over 4% after it reported a 24% drop in quarterly profits for the last quarter of 2008.
Like the other oil majors, the company was hit by the falling oil price. Oil industry analysts said that the company’s profits were “well below” what the city had expected.
However, BP was not just under fire from the City. Two NGOs in Europe released a report attacking the company’s lobbying activities in Brussels. Working with a team of lobbyists who are based just metres away from the Commission and through a network of oil industry groups, BP exerts undue influence on European decision making, they claim.
The report concludes that BP’s “lobbying at the heart of the EU has left European member states vulnerable to energy shortages and has undermined EU efforts to tackle climate change”.
Written by Corporate Europe Observatory and Platform, the report is called “BP – Extracting Influence at the Heart of the EU.” It highlights how BP undertook a classic PR campaign to position itself at the centre of EU energy policy. It did this by building high level contacts and persuading EU Commissioners, officials and government ministers of a “shared agenda” in working together.
One way to promote a shared agenda is to have shared staff. The report highlights classic cases of the revolving door. BP chairman Peter Sutherland simultaneously acted as Commission President Jose Barroso’s adviser on energy and climate change from 2007. BP’s chief executive of refining and marketing, Iain Conn, also played a key role on the Commission’s High Level Group (HLG) on Competitiveness, Energy and the Environment, inputting on future energy policy.
Although BP’s results included a $700m loss at its Russian operations TNK-BP, the report noted that BP still enjoys high level support within the EU for its Russian operations. This is not surprising considering the EU is increasingly dependent on Russian gas .
One of the directors at Platform, James Marriott, said: “BP has established an impressive Brussels power base, with key figures strategically placed inside EU institutions. The result seems to be that some within the EU think that what works for BP must be in the best interests of the EU’s citizens, but it is far from clear that this is the case.”
BP also appears to downplay its lobbying activities. It recently entered its lobbying interests on the Commission’s new –but flawed voluntary lobby register, claiming that it spent just 200,000 – 250,000 euro on lobbying activities in 2008. It seems that BP might be hiding some of its lobbying activities as ExxonMobil declared expenditure of 900,000 – 950,000 euro for the same period, while Microsoft said it spent 1,300,000 euro in 2008.
Maybe this is proof of BP using third parties to lobby on its behalf, or maybe if you have so many insiders you don’t need to lobby.