BP PLC's (LSE:BP.) latest setback sees boss Bernard Looney leave with immediate effect over governance issues, but this is far from the company's biggest debacle.
As the lack of drama in the City over the news showed, most investors in BP and its fellow cash-churning peers care little for such hiccups.
However, going back through the history of the company that was founded as the First Exploitation Company (a name that would see big red flags waved these days) finds a litany of much bigger embarrassment and catastrophes.
1901-1935: Bribes and non-payment of dues
In 1903 the First Exploitation Company was founded by Anglo-Australian entrepreneur William Knox D’Arcy to explore and develop an oilfield concession granted by the Iran government, following the payment of “handsome bribes” to key Persian officials and support from the British minister in Tehran. After striking oil in 1908 it was named the Anglo-Persian Oil Company Ltd in 1909, with the British government taking a majority stake in 1914. An investigation in 1917 found the company at fault for non-payment of full dues to Iran as well as for advancing “numerous unreasonable demands”. The company was renamed the Anglo-Iranian Oil Company (AIOC) in 1935.
1953: Forcing a coup
AIOC faces worker strikes over working conditions, low wages and other issues over several years, while also being criticised by the local government for not paying enough royalties. After Iran nationalised the oil industry in 1951 and severed diplomatic ties with Britain in 1952, BP and its backers in Westminster, led by Winston Churchill, convinced the US government and the CIA to organise and fund a coup to overthrow the government, the devastating consequences of which are still affecting the wider Middle East to this day. In 1954 British Petroleum was created as a new name for the company.
1987: Black Monday
The UK privatisation spree under Margaret Thatcher saw the government sell its remaining 31.5% interest in British Petroleum Company PLC in 1987, which coincided with the Black Monday stock market crash. It was a “malign coincidence”, let’s be generous here, as chancellor Nigel Lawson called it.
1999: Covering up oil spills
BP ended up paying several million dollars after a US oil broker alerted the company about problems at its Alyeska Pipeline Services subsidiary, which was responsible for containing oil spills at the terminal where the Exxon Valdez disaster happened. Following his warning to the company, his phone was tapped, his home bugged and his post intercepted. Alyeska employees who sent him information were fired. BP had ignored his warnings that Alyeska would be unable to cope in an emergency. Evidence of pollution was also covered up at the Alyeska terminal, where employees also admitted falsifying reports to the US government to conceal previous smaller spills.
2005: Texas City refinery explosion
Cost-cutting and complacency over safety was blamed after an explosion at a BP refinery killed 15 workers and injured 180 others – the worst industrial accident in the US for a generation. The company, where senior BP executives under chief executive Lord Browne were said to have failed to act on red flags over safety, eventually was made to pay a record US$50.6 million fine.
2006: Oil leak at Prudhoe Bay
Similar issues were again cited after over 250,000 gallons of oil spilled through corroded sections of the BP pipeline in Alaska’s Prudhoe Bay, the largest ever in Alaska's North Slope region. It led to a partial shutdown of the company's North Slope oil field and a costly cleanup. A US$25 million civil penalty followed.
2007: Market manipulation
BP paid a massive US$303 million in fines to settle criminal and civil cases related to propane market manipulation earlier in the decade. According to the Commodity Futures Trading Commission’s civil suit, traders set the price high and withheld some propane from the market, all with the knowledge, advice and consent of senior management.
2010: The Deepwater Horizon disaster in the Gulf of Mexico
An explosion at the BP oil well left 11 men dead and caused the world’s largest offshore spill. With the company led at the time by Tony Hayward, a later White House report alleged “overarching management failures” and poor decisions by BP and its partners.
2010: Promises, promises
In the wake of the disaster, BP promised to right its wrongs, led by new boss Bob Dudley. He and the board also saw the chance to remake the company, announcing plans to sell off US$38 billion of assets by the end of 2013.
2011: Another oil leak in Alaska
But another oil leak, again blamed on more cost-cutting, was not far away.
2011: Collapse of Russian deal
An embarrassing collapse of BP’s ‘historic’ agreement with Russian partners, including state backed Rosneft (LSE:ROSN), to jointly explore for oil in the Arctic. The year saw Russian special forces raid BP’s main offices in Moscow as a group of oligarch shareholders pursue a US$3 billion compensation claim over the collapse of the Rosneft (LSE:ROSN) share swap, while an internal inquiry by the TNK-BP joint venture confirmed 365 cases of alleged corruption and other violations of company rules.
2013: New Russia deal
In late 2012 and into early 2013, BP completes a deal to sell its half of the TNK-BP joint venture to Rosneft (LSE:ROSN), the state-controlled Russian group, with an associated share swap and joint venture. At this point, total proceeds from BP’s asset sales had reached an eye-popping US$65 billion.
2014: After Crimea, reluctance to kill golden Russian goose
After Moscow annexed Crimea, sanctions including visa bans and asset freezes were imposed by Europe and the US, including on Rosneft (LSE:ROSN). But BP defends the company’s ongoing involvement and close connections with Russia, which accounted for nearly a third of BP’s global oil production and more than a third of its reserves.
2018-19: Dudley flees Russia, later quits
Boss Bob Dudley stepped down in 2019, with Russian worries looming heavily. The year before Dudley fled Russia, citing “sustained harassment” and apparently so anxious about his safety that his departure from the country was kept secret until he was safely on a plane. Coming a year after the attempted poisoning of Sergei and Yulia Skripal in Salisbury, there were newspaper reports that blood test results indicated he was being slowly poisoned.
2022: Russian exit
Following Russia's invasion of Ukraine, Bernard Looney, who became BP CEO in 2020, conceded defeat and announced plans to divest completely from Rosneft and exit the country.
2023: Deepwater rumbles on
Litigation from the Deepwater disaster continues to dog BP 13 years later, with thousands of people still suing the company for health conditions they say come from cleaning up the oil spill. Some of the claims suggest that BP did not do enough to prepare workers for the risks associated with the toxic chemicals used for the job.
2023: Looney tunes out
Looney resigned, with the announcement going out late on a Tuesday night, effective immediately, after it was discovered that he was not “fully transparent in his previous disclosures” about his relationships with colleagues before he took the job.
“The company has strong values and the board expects everyone at the company to behave in accordance with those values,” BP said in a statement. “All leaders in particular are expected to act as role models and to exercise good judgment in a way that earns the trust of others.”