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By John Kemp
LONDON, April 27 (Reuters) - "Downing Street has discreetlylet it be known in the City that it would oppose any takeover ofBP," the Financial Times reported on Sunday.
The prime minister's office has signalled it would make lifedifficult for any bidder, although no bid has been mooted yet,the newspaper said ("UK ministers make Gallic gesture to keepthe British in BP", April 26).
The company formerly known as British Petroleum wasrebranded as the more neutral BP at the turn of themillennium after absorbing U.S. oil firms Amoco and Arco.
But the company's identity remains complicated, at once BPand British Petroleum, part of Britain's establishment but alsoa footloose international oil major with operations around theworld.
Much more than Royal Dutch Shell, with its historical linkto the Netherlands, BP is Britain's national oil company andbears with it the country's hopes for a major post-imperialrole.
BP continues to have a close relationship with Britain'sestablishment - reaching beyond government ministers, who comeand go, right into the core of the permanent Whitehallbureaucracy as well as the media and London's financialmanagers.
When the company was pilloried by U.S. politicians as acareless foreign operator in the wake of the Deepwater Horizonoil spill in the Gulf of Mexico, the company took pains to playdown its Britishness and emphasise it was a good Americancorporate citizen.
But at home, the company mounted an effective publicrelations campaign to enlist support from ministers and theBritish media to push back against what it presented as astrategic threat to the United Kingdom. BP wrapped itself in thenational flag at home, while presenting itself abroad as apost-national corporation of the world.
ANGLO-PERSIAN
From the very beginning, British Petroleum, formerly theAnglo-Iranian Oil Company and before that the Anglo-Persian OilCompany, has had close links to the state.
The company owes its existence to an unusual governmentinvestment of just over 2 million pounds into the firm in May1914, masterminded by Winston Churchill, then serving asBritain's minister for naval affairs.
Churchill was determined to ensure a reliable source of oilfor the Royal Navy from within Britain's empire to avoid adangerous dependence on the United States, Russia or the DutchEast Indies ("The Royal Navy's Fuel Supplies 1898-1939", 2003).
The advantages of liquid petroleum over solid coal as fuelfor warships were "inestimable", Churchill wrote later ("TheWorld Crisis", 1938).
"But oil was not found in appreciable quantities in ourisland. If we required it, we must carry it by sea in peace andwar from distant countries ... An unbroken series ofconsequences conducted us to the Anglo-Persian Oil Convention,"Churchill explained.
Persia was formally independent, but the country, especiallyits southern half, where the oilfields lay, was firmly withinBritain's sphere of influence, while the north lay in Russia's.
Britain's investment gave the government a voting stake ofjust over 50 percent in the company and provided capital at acritical point when the firm was seeking to develop its newfields in southwest Persia.
In exchange, the Royal Navy received a guaranteed supply ofoil below market prices and Britain's government receivedhundreds of millions of pounds in dividends and tax revenues,far more than Iran ever received ("Blood and Oil: A Prince'sMemoir of Iran from the Shah to the Ayatollah", 2005).
In 1951, when Iran nationalised the assets of theAnglo-Iranian Oil Company, Whitehall helped organise a worldwideboycott of Iran's oil sales (the forerunner of the currentsanctions regime) in a bid to reverse the nationalisation or atleast win substantial compensation.
Following nationalisation, Whitehall, encouraged byChurchill, serving in his last term as prime minister, plottedto overthrow Iran's democratically elected government, in a plancodenamed Operation Boot.
In the end, it was the United States that took over theplan, and fomented a coup in 1953, codenamed Operation Ajax.
Prime Minister Mohammad Mossadegh was overthrown and ShahMohammad Reza Pahlavi was installed as an autocrat, until he toowas overthrown in 1979 by Ayatollah Ruhollah Khomeini.
"Even in Persia, they were never quite convinced that I hadnot come straight from Whitehall," Lord Strathalmond, chairmanof 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, renamedBritish Petroleum, successfully reinvented itself by developingnew fields in Kuwait, Alaska, the North Sea and around theworld.
The British government's remaining stake in BritishPetroleum was eventually sold in 1987 as part of theprivatisation programme of the government of Prime MinisterMargaret Thatcher.
But the company, renamed BP after the mergers of the late1990s, has retained close links to the very apex of the Britishgovernment under both Conservative and Labour-ledadministrations.
For example, Anji Hunter, one of the most senior aides toLabour Prime Minister Tony Blair as head of government relationsin the late 1990s, went on to become director of communicationsfor BP in 2002.
She also married one of the top political journalists atbroadcaster Sky News, and now works as a senior adviser topublic relations company Edelman.
Nick Butler, who worked for many years at BP, rose to becomegroup vice-president for strategy and policy between 2002 and2007, before becoming a senior policy adviser in the primeminister's policy unit at Downing Street in 2009-2010 underLabour Prime Minister Gordon Brown. Butler now blogs for theFinancial Times.
Ben Moxham, who served as director for policy and regulatoryaffairs at BP and then vice-president at Riverstone Holdings,the investment firm where former BP chief John Browne is apartner, went on to be the senior adviser on energy and theenvironment to Conservative Prime Minister David Cameron andLiberal Democrat Deputy Prime Minister Nick Clegg between 2011and 2013.
Browne himself, ennobled in 2001 as a member of the House ofLords, the unelected upper chamber of Britain's parliament, hasundertaken a number of high-profile government assignments sincestepping down as head of BP in 2007.
Close relations between Whitehall and business, includingthe exchange of personnel between the civil service and majorcorporations, are normal in Britain, but no other company hashad such close links to the very top of government.
BP is not just another large company listed on the LondonStock Exchange that could be taken over by a foreign corporationat the right price. It is part of the establishment.
BP's history is the story of the last days of the BritishEmpire. And with its reinvention after the Iranian crisis in the1950s, BP has become the flag-bearer for Britain's hopes ofremaining a global player in the oil industry, albeit with amuch diminished role.
For BP to fall into foreign ownership, and cease to beBritish Petroleum in fact as well as name, would intensify theestablishment's existential angst about Britain's future role inthe world and is simply unthinkable. (Editing by Dale Hudson)
