Margareta Pagano: How far do we have to drill to find BP's chairman?

Where is Carl-Henric Svanberg hiding? And, more pertinently, why is he hiding? The Swedish chairman of BP is proving every bit as mysterious as one of the characters out of a Stieg Larsson novel, while his chief executive, Tony Hayward, is being crucified by the world's press as the demon destroying America's coastline. Svanberg has made only one public statement since disaster struck just over a month ago in the Gulf of Mexico, throwing both BP and the future of deepwater drilling into jeopardy.

This is extraordinary because any chairman facing such a disaster should be out there batting for his chief executive, his company and his country – the UK, not Sweden. So far, all we have seen is the puppyish-looking Hayward, up to his neck in oil and golf balls, quite obviously doing all he humanly can to stop the oil leak, which is self-evidently as much in his interest as it is in the United States'. Apart from Hayward, BP has been fielding the not so calming voice of Andrew Gowers, ex-FT editor and ex-Lehmans head of spin, to present the oil giant's case.

It's not enough. In such an hour of need, it is the chairman who should be taking control, showing leadership, whether this means appearing 24/7 on the media as well as behind the scenes smoothing fears and negotiating with the cohorts of US senators, environmentalists and commentators screaming for blood. This is why Svanberg is paid £750,000 a year for his two to three days a week job, and why his credentials of running Ericsson, which he turned around, before heading BP – supposedly put him in good stead to run the UK's biggest corporation.

In Sweden, he's called the "golden-boy" of the North, a Swedish Richard Branson said to be hot on communicating – but we've neither seen nor heard any evidence of this. It's not clear whether Svanberg is out of his depth or just has not cottoned on to the enormity of what's happening. Either way, the ice-hockey-playing engineer needs to move pretty smartly to get his act together.

There are three messages which Svanberg should be out shouting from the oil rigs to correct the seemingly one-sided onslaught of bile. First, BP is crucial to the UK economy not just because of the £5bn a year in tax it pays to the Government, but the £7bn or so paid out in dividends to investors, which include most UK workers through their pension schemes. Thus it's vital to the UK economy that BP work efficiently. Which is why allowing the issue to be hijacked by the green angels as some sort of totemic victory over the nasty capitalists bleeding the earth dry is inappropriate. Second, there is the hypocrisy of the debate in the US – BP operates in the Gulf of Mexico because it has a rich seam of oil which is relatively cheaply produced for the vast US market. So long as the US remains addicted to cheap oil it needs BP and the other explorers to pump it up to feed their enormous gas-guzzling cars.

If this episode leads the US to stop all deepwater drilling, then oil prices will be pushed up. That's why President Obama needs a cold shower before he continues berating BP and engage in a proper debate with senators and environmentalists on whether cheap oil is still the nirvana, and why Svanberg should be on Capitol Hill putting BP's case. The US needs BP as much as BP needs the US market.

There's a third point which Svanberg should be making most forcibly of all; BP's safety record. The oil giant has a legacy of mistakes and fatalities in the US, so criticism is valid. That's why it's so important for Svanberg to reassure the US public that when the oil spill is cleared, BP will carry out its own in-depth and public analysis of what went wrong, and take all measures to improve its safety record.

So long as BP drills in deep waters, there will always be enormous risks, risks which cannot always be anticipated. For the moment, more than a third of the world's energy comes from oil, a proportion unlikely to change much in the next few decades. The only other big, untapped supplies in the world are also in deep water, such as those in the Barents Sea. It may be that we no longer have the appetite for this level of risk, and, if this is the case, then governments should consider the alternatives more seriously. But to demonise BP for doing its job – with everybody's approval – is cheap. So, by the way, are the shares, down a third to 448p since the spill, although rising again on Friday after confirmation that the dividend will be paid. Time to buy?

Government goes off the rails by selling high-speed link to highest bidder

The Government is steaming ahead so fast with plans to raise money that it's in danger of losing one of its prize assets. As we report on page 77, one of the first being sold to the highest bidder is High Speed 1 – the super-fast rail link from the Channel Tunnel whisking passengers at 225km an hour into St Pancras. Ministers want to put HS1 up for sale, hoping to make around £1bn-£2bn by selling the 108km of line – along with the stations at Ebbsfleet, Stratford and St Pancras – to a trade buyer. Obvious candidates include Germany's Deutsche Bahn (DB), which already has a huge footprint in the UK, a consortium including Network Rail, and even Eurostar.

But isn't the Government missing a trick? HS1 is one of the UK's biggest civil-engineering feats, the first new mainline since 1899 and just the sort of big and bold projects we need. What's more, it's highly profitable. The number of passengers travelling to and from the Continent is soaring, and will rise as the public gets reacquainted with rail. Airline costs and the fragility of air travel after volcanic eruptions can only push up those numbers. At the same time, all the big rail companies such as DB and SNCF on the Continent are working on improving their networks so travelling between countries is made easier. Freight is also set to increase as the railways link up.

Surely this makes HS1 a perfect opportunity for an old-fashioned privatisation? A big chunk of the shares could be sold to the public with all sorts of travel discounts for shareholders. It could be just the sort of long-term shares that would appeal to retail investors; and could include a golden share to protect the company in the longer term.

Too many British companies have been sold off recently – Cadbury to Kraft and Arriva to DB to name a few. Why should we let one of the best examples of 21st-century British engineering be snapped up so soon? Ministers should slow down and reconsider.

Yet technical experts from oft-speculated potential buyers ExxonMobil, Royal Dutch Shell and Chevron are among those trying to prevent the escalation of the costs and environmental consequences of the Deepwater Horizon spill.

That BP could come into play as an acquisition target becomes ever more possible as the share price collapses, but the idea that a Western major is actually priming itself for a bid is really quite far-fetched. BP's rivals are more concerned about the wider impact for the oil and gas industry than they are about shelling out for a business empire.

The costs of oil projects are set to soar as governments insist on tougher environmental safety standards in the wake of the spill. Already the Kazakhstan energy ministry has forced Shell to tighten up plans at its Kashagan development, meaning that the current $136bn budget is likely to be busted.

"It's clear that we need the consortium members to take seriously the signals from the Gulf of Mexico event," Kazakhstan's minister of oil and gas, Sauat Mynbayev, was quoted when warning Shell last week. What this tragedy – which killed 11 men after pressure a mile beneath the seabed finally broke through a well – will lead to is a fundamental reconstruction of both BP and the entire industry.

Oil and gas bankers who have worked on some of the biggest acquisitions of recent years say that BP's suitors will rule out any immediate move. "Everybody at this stage just wants to be seen as helping," explains one banker. "If it came out that anyone was talking to advisers at this stage [about a takeover] there would be public outrage."

In other circumstances, a one-third dive in BP's share price would result in bankers pitching immediately and incessantly at chief executive Tony Hayward over potential defence strategies.

"The BP attitude is 'we don't think we're vulnerable to a takeover, we're totally focused on what we're doing to control the spill, so leave us alone'," says an industry source.

However, BP's regular adviser, Goldman Sachs, is rumoured to be dusting off the company's defence playbook. Should a bid materialise from China, which would be far less sensitive to the public relations implications of bidding for BP during the greatest ecological disaster of the century so far, the company will need a far bigger defence team.

The Goldman link is a result of the previous management regime, as both former chief executive Lord Browne and former chairman Peter Sutherland held senior positions at the bank at the same time.

And that historic link presents its own difficulties. Already President Barack Obama has taken to referring to BP as "British Petroleum", simultaneously distancing his administration from an overseas company and using the full name in the manner of a teacher disciplining an errant schoolboy.

Tying together two of the most unpopular companies in the US would only reinforce the president's message. In a US poll last month, Goldman had but a 4 per cent approval rating, partly a result of the Securities and Exchange Commission's recent charge of fraud against the bank – allegedly committed in the build-up to the financial crisis.

As the pressure builds on BP, so the situation becomes almost unbearable for Hayward. Already he has committed the huge public-relations error of declaring that he would "like my life back", having based himself in the US since the explosion on 20 April.

His position is considered very much in the balance, but industry insiders believe that Hayward is safe in the short-term as he has, at times, successfully reassured investors.

For example, US senators Chuck Schumer and Ron Wyden hurt the stock price by calling on BP to suspend its dividend, potentially devastating to UK pension funds that get one-in-six pounds of all such payouts from the company. Hayward announced that the dividend, arguably BP's greatest market strength, will hold firm.

Also to his advantage is perception. Firing the top man in the middle of a crisis would only spook the markets when they have just regained a little faith in the company – shares rose 4 per cent on news that BP had temporarily lowered a cap on to the leaking well.

"Why would the board fire him now?" says a source. "They need him to take the rap and sort it out."

A little further into the future and Hayward is in trouble. Bookie William Hill says Hayward is odds-on to be out of the job by the end of the year.

A former oil chief executive says: "I'm not a great fan of the way that this is playing out for Tony. He's a very open and candid guy and has boyish looks that don't give him gravitas. Those are probably attributes that you don't need in these circumstances."

He is also critical of the BP chairman, Carl-Henric Svanberg, who has kept an astonishingly low profile during the crisis. "Although Tony hasn't covered himself in glory, Svanberg has been laughable. You need your chairman to step in and talk to the newspapers while the CEO gets on with the task of sorting out the problem."

While it seems inevitable that there will be regime change, a new management team could find itself in a relatively strong position as a result of fundamental changes that the industry will now go through.

Perversely, majors might reassert their market dominance. President Obama has announced a six-month moratorium on costly, potentially dangerous deepwater drilling in the area while the clean-up continues.

This could cost up to 6,000 jobs in Louisiana and will hit the pockets of the oil majors. But the likes of BP and Shell can afford the hit. "BP can probably handle $20bn to $40bn," says an industry expert.

"All those medium-sized players will look at the spill and have to admit that they would go into bankruptcy if they suffered a similar event."

The result could be that smaller companies – that don't have market values in excess of $100bn – might pull out of deepwater activities. Only the big boys of the industry would remain in these lucrative waters.

Also, the majors might take many key operations back in-house as contractors grow concerned over potential liabilities. For example, Transocean supplied the Horizon rig and hired the contractors on the project.

This would pass more of the risk on to industry giants, but also give them the bulk of the rewards. With so few companies in this part of the market, consolidation would become even more difficult as there would be more competition issues.

BP looks likely to retain its independence, though its reputation will take a long time to restore. However, rehabilitation can be achieved. Twenty-one years on from Exxon Valdez and Exxon is still one of the world's biggest oil companies.

But this is likely to come at the price of the heads of the top executives and a total realignment of the oil industry.