ALEX BRUMMER: Tony Hayward's Vallares puts BP in the shade

By Alex Brummer for the Daily Mail
Updated: 19:37 EDT, 8 September 2011

Less than a year after Tony Hayward paid the price at BP for the calamitous drop in the company’s shares after his handling of the Deepwater Horizon oil disaster, he is back with a vengeance.

The deal under which his new quoted vehicle Vallares is to absorb the ethically-challenged Kurdistan player Genel Enerji will personally make him a very rich man (he is in line for at least $24m) and could propel the parent straight into the FTSE 100.

Contrast Hayward’s new life with that of his successor at BP Bob Dudley who is having a nightmare.

Back with a vengeance: Tony Hayward paid the price at BP after his handling of the Deepwater Horizon oil disaster

BP’s shares stand 44 per cent  lower that when the Macondo well sprung its leak, efforts to rebuild the company as an Arctic pioneer have melted in a war with the oligarchs which left Exxon Mobil to cruise in and pick up the plum exploration blocks.

At an investors meeting in New York this week Dudley was confronted by angry shareholders demanding to know how BP was going to fill the vacuum created by its Russian loss.

It is not just ineffectual chairman Carl-Henric Svanberg who finds his job on the line but Dudley too – unless the Mississippian can turn around the dragging market value of the company.

Hayward in contrast is talking in grandiloquent style about the prospects in his new Kurdistan world.

He describes it as ‘the last big onshore “easy” oil province available for private exploration anywhere’.

Hayward is confident that Genel’s past problems with Baghdad are resolved and there will be no difficulty in repatriating revenues.

Up to a point, Lord Copper. We should not forget that the last effort by a UK based company to get its hands on Genel ran into real difficulty after its chief executive Mehmet Sepil was fined for market abuse.

Vallares seeks to get around the London Stock Exchange’s coolness to Genel by creating a new board, filled with good and great non-executives with former BP director Rodney Chase as chairman.

But it will hard to escape the fact that 30 per cent of the enhanced company’s shares will still be controlled by the Turkish billionaire Mehmet Emin Karamehmet, who like that other famous backseat agitator Sir Stelios Haji-Ionnnau at easyJet, will be blowing raspberries from the sidelines.

Nevertheless, the prospects look good with 60,000 barrels of oil a day already flowing and a rise to 150,000 barrels on the cards in the next couple of years.

As for Hayward, he is unrepentant at having made so much money so quickly in these cash-strapped times for ordinary Britons.

He argues that he and his partners, including financier the Hon Nat Rothschild, have placed $100m at risk in Vallares and are now reaping the rewards. There is little sign of him having read the Warren Buffett manual on higher taxes for the rich and big giving.

Bank reform

David Cameron would be unwise to go softly, softly on the banks and leave legislation on Sir John Vickers’ ‘ring fencing’ report on the banks in the pending tray.

There is absolutely nothing to suggest that the banks deserve velvet glove treatment.

Evidence to suggest that the banks and the bankers are among the undeserving rich.

As we report today a fresh study by the New Economic Foundation establishes that the taxpayer subsidy to the banks at the end of the 2010 stood at £46bn.

If lent at similar subsidised rates to small businesses that could transform entrepreneurship.

Instead, as the governor of the Bank of England Sir Mervyn King makes clear in a private letter, the numbers provided by the banks to the Chancellor on SME lending are misleading because they record the facilities as granted – even if they were not drawn down – which gives an entirely different picture. The service provided by the banks to retail customers is also rotten with 150,000 complaints referred on to the Financial Ombudsman in the first half of this year.

Strangely enough that is also the number of jobs shed by the banks since the financial crisis.

Downing Street please note.

Darling’s verities

Now that the official publication date for Alistair Darling’s memoir Back From The Brink (published by Atlantic Books) has arrived we have the truth behind two urban myths.

Darling kills the idea that the Lloyds rescue of HBOS was cooked up by Gordon Brown and Lloyds chair Sir Victor Blank over cocktails. He notes instead that Lloyds chief executive Eric Daniels had been keen to do such a deal earlier.

Secondly, far from legging over the US Treasury, over a proposed Barclays rescue of Lehman, the Financial Services Authority offered 20 reasons why the deal should not be done.

For once, it was right.