International oil company BP , weakened and distracted by its troubles in the United States and Russia, is in danger of losing touch with the leaders in an industry where strength and focus yield the richest pickings.
"I can't help thinking they've sort of lost their way. "Everywhere you look, they're falling behind," said a senior executive of one rival this week.
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He spoke after BP agreed to swap its Russian assets, a quarter of its worldwide oil output, for $12.4 billion in cash plus 20 percent of the buyer, Russian state oil company Rosneft .
The $27 billion deal would end a fraught relationship with the Soviet-born tycoons who co-own TNK-BP with BP.
It may or may not solve BP's problems in Russia and could yet unravel, but the company had little choice than to throw its hand in with the government of President Vladimir Putin. Russia, like other resource-rich nations, is anxious to see as much of its oil money as possible staying at home, and is reversing the sell-offs of the 1990s.
"Jury out, as ever, but in fairness to BP, this is a better outcome than many could have hoped for," said Deutsche Bank analyst Lucas Herman in a note reiterating his "buy" recommendation for its shares.
BP is as old as the modern oil industry itself, and has been in far worse scrapes before.
A hundred years ago it had run out of money developing oil reserves in Persia (now Iran), and with no customers for its fuel, faced oblivion. "What a hell of a mess," wrote John Cargill, the chairman of its top shareholder at the time.
But within a few years the Anglo-Persian Oil Company, as it was then called, had dodged bankruptcy and was back on its feet thanks to wartime fuel demand from the British Navy.
In 2012, chief executive Bob Dudley should not need that kind of luck.
He runs a profitable company with leading oil and gas positions in U.S. Gulf deepwater, Trinidad and Angola. For future growth, he has exploration acreage in the South Atlantic margins taking in Uruguay, Brazil and Namibia.
It's not a hell of a mess, but he might hope better times are ahead, just as they were a century ago.
BP has slipped to distant fourth out of five western oil supermajors by stock market value, having ruled the European roost as world number two behind Exxon Mobil in its early 21st-Century heyday.
The company also lags its peers by investment valuation measures, as the table below shows. Earnings quality, calculated by Thomson Reuters Starmine, measures the degree to which past earnings are likely to be maintained on a scale of 1 to 100.
SHADOW OF THE SPILL
The core reasons for a BP stock market value 'discount', which analysts put in the tens of billions of dollars, are the Russian uncertainties and the looming shadow of potential liabilities for the 2010 U.S. Gulf oil spill.
After months of growing expectations that U.S. authorities were moving towards a settlement, in August the Department of Justice made a court filing re-asserting its case for gross negligence with regard to the accident.
Such a finding could cost BP $21 billion under the United States' Clean Water Act, based on a maximum fine of $4,300 per barrel spilled tied to a 4.9 million-barrel estimate of the total that spewed into the sea.
BP has already spent $14 billion on clean-up operations and paid out over $8 billion in claims. It is offering a further $7.8 billion in settlement to individuals and businesses affected by the disaster on top of all the other costs.
It plans to contest a gross negligence charge at a hearing due to start in January. A fairness hearing on the proposed $7.8 billion settlement for individuals and businesses is due on November 8.
BP has made good progress selling a raft of assets so that it can shoulder a big hit, having raised to date some $35 billion towards a goal of $38 billion from divestments.
In the process, it has expunged another blot on its U.S. safety reputation - the accident-prone Texas City refinery, selling it to Marathon Petroleum earlier in October.
So financially, BP has the makings of a new start, in the United States, Russia and elsewhere.
"Our strategy targets higher cashflow; we expect to increase operating cashflow by 50 percent from 2011 to 2014 (in a $100 oil price environment)," BP said in an emailed statement.
But it is not all about money. The spill and the Russian issues have taken management time that might have been focused on the business itself. And the spill has tarnished BP's reputation in a core producing country.
On Dudley's to-do list now are production problems in Azerbaijan, where the company is trying to mollify a government angry about falling output.
Last week he juggled face time with Rosneft boss Igor Sechin and Rovnag Adbullayev, the president of the Azerbaijan state oil company SOCAR.
Then there is Rumaila in southern Iraq, the biggest of the country's producing oilfields. BP has the pick of the bunch of service contracts, but it no longer looks like the most alluring business in post-war Iraq.
Rivals who followed it in are having second thoughts, heading north to the autonomous Iraqi Kurdistan for richer pickings and some ownership of the production itself, to the fury of the Baghdad government.
On a smaller scale, BP's one-year-old Indian projects are in the doldrums. Partner Reliance Industries is considering shutting underperforming gas fields.
BP also has issues in Norway, where its Skarv project is months behind schedule.
These troubles are the normal stuff of the international oil business, of course. And BP is not alone in suffering from increasing competition for assets from cash-rich national oil companies and for industry project "action" from the increasingly influential oil services sector.
NO EASY RIDE
And BP's rivals have their own crosses to bear; witness Shell's embarrassing stutter in the Arctic as winter closes in, with $5 billion spent and barely a hole drilled, and Exxon's expensive 2010 acquisition of shale gas producer XTO Energy just before gas prices hit the skids. All the big guns of the industry are struggling for a toe-hold in some of the newest and hottest provinces of east Africa and offshore Brazil.
But BP lacks Exxon's scale, and without TNK-BP, which used to pay out rich dividends, it could do with a cash cow like Shell's GTL plant in Qatar to feed its exploration and acquisition budget.
On a longer term strategic level, BP is seen as slipping behind in the race to develop liquefied natural gas (LNG) projects.
LNG projects - expensive, complex and risky, like the U.S. Arctic offshore where BP is also conspicuously absent - are among the few areas where the supermajors can still flex their muscles.
Sets of data produced by rivals Royal Dutch/Shell and BG shows BP dropping from third to sixth place by 2017 among the big corporate players in terms of LNG projects onstream or under construction.
The data shows BP with barely an extra million metric tons a year of new output in its portfolio by then, compared with roughly an extra 15 million for Chevron and 7 or 8 million each for BG and Shell, mainly thanks to that trio's huge projects in Australia.
"We've set out our strategy to 2014 - focusing the company around our strengths, the things we do well - and are making good progress on it," said BP in its statement.
"These strengths include exploration, operating in the deep water, developing gas value chains from production to market, and developing and managing giant fields. And looking for valuable barrels rather than simple volumes. Between 2012 and 2014 we expect to bring 15 new major upstream projects on stream that have margins double that of our 2011 portfolio average."
All music to investors' ears, but some of its rivals have a head start, and they won't be standing still.
(Reporting by Andrew Callus; Editing by Will Waterman)