The oil company's venture into Russia could either make or break the reputation of its chief executive
No businessman in Britain, or quite possibly Europe, is as highly regarded as Lord Browne, the chief executive of BP.
Since taking control of the company in 1995, he has led the oil industry's consolidation, making $100bn of acquisitions, and earned countless plaudits from shareholders and commentators.
Browne's ability to cement deals, and to mobilise the support of shareholders, put the rest of the oil industry to shame, and none more so than BP's traditional European rival Royal Dutch/Shell Group.
Then in 2002, the wheels on Browne's bus started to wobble. They haven't fallen off, but the vehicle no longer runs as smoothly as it did.
Last year, BP lowered production forecasts several times, rattling the confidence of investors. BP shares dipped from a high of 543p in August to a four-year low of just over 350p in January, despite a strong oil price that usually lifts profit.
BP's shares have done worse than Shell's since its first production warning: down 19%, compared with a 12% fall for Shell.
As BP missed its production targets and the company's share price fell, investors altered their view of Browne.
They remained confident that he was clever, charming and decisive. But they started to question his skills as a day-to-day manager. They knew he got the big picture. It was the details that were going wrong.
The first phase of Browne's reign at BP was marked by acquisitions. Within four years of taking charge, he bought the US oil companies Amoco and Atlantic Richfield and wove them into the BP machine. At that, he was successful.
In the second phase of his reign, Browne made expansion of production his priority. He pressed his managers to increase oil and gas production by 5.5% a year, almost twice the rate of growth at Shell and Exxon Mobil. BP missed that target.
Now Browne is launching phase three of his term at the top of BP: Russia. The company announced it will pay $6.75bn in cash and stock for 50% of a joint venture with Alfa Group and Access Industries-Renova, owners of Russia's third-largest oil producer, OAO Tyumen Oil.
That will make BP one of the biggest oil companies in Russia and the largest foreign investor in the country. Industrial wagers don't come much bigger.
Russia may well prove the deciding factor in determining Browne's reputation. The investment could either enhance it or kill it.
Browne's comments suggest he is aware of that. On announcing the deal, he said: 'We believe this to be a great moment in the history of BP and of TNK/Sidanco and, indeed, an important milestone in the history of the industry.'
When chief executives start talking about history, it's usually time to start selling their companies' stock. Grand themes have a habit of turning into excuses for dismal performance.
In this case, though, Browne may be right. The year 2003 could turn out to be pivotal for oil.
Two big trends are coming together to change the business. Russia has revived its oil industry and is now close to overtaking Saudi Arabia as the world's number one oil producer.
The looming war in Iraq may well reshape crude production in the Middle East. An interim post-war administration is going to start pumping oil as soon as it can. There is no other way to pay for the reconstruction of that country.
Meanwhile, there is political instability in Venezuela, another big exporter.
All this adds up to a fundamental change in the balance of power within the oil industry, creating both opportunities and dangers.
There is an opportunity to get control of new reserves, either in Russia or Iraq. But there is also a danger of miscalculating and losing billions. BP is well placed to exploit the opportunities. Its latest commitment to Russia is significant in itself, but might well be a signal of bigger moves in the future.
If its new joint venture goes well, BP could take full control of Tyumen. In time, it may go after the two other giant Russian oil companies, AO Yukos Oil and OAO Lukoil, assuming none of its rivals gets there first.
BP is also well placed in the Middle East. The company's closeness to Prime Minister Tony Blair has earned it the nickname Blair Petroleum in the City. Expect it to play a part in rebuilding the Iraqi industry.
Gauging political risk is nothing new for oil company executives. Still, it's the part of the job where Browne has shone. Making acquisitions in the US, where oil is part of the country's mythology as well as its economy, required the skills of a politician and diplomat even more than those of a negotiator.
Translating geopolitical vision into profit and a rising share price is another part of the oilman's job. Here Browne's record is mixed. He integrated BP's US acquisitions. His bid to speed up his company's production did not succeed.
Investors will have to hope the Russian phase of Browne's career is more like the US acquisitions phase than the phase he has just completed.
Bloomberg London newsroom
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