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David Prosser: BP holds its nerve to get its man at last

Friday 26 June 2009 00:00 BST
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Outlook What is it about Scandinavian telecoms bosses that so excites big oil? First, Shell hired a former Nokia boss as chairman, and now BP, out of nowhere, has hired Ericsson's CEO, Carl-Henric Svanberg, for its vacancy in the chairman's office.

For BP shareholders, this appointment may not be quite the leap of faith they might imagine. After all, if companies only ever recruited their most senior staff from within the ranks of their own industries, there would be a pretty narrow perspective at the top. The new man can pick up the oil business quickly enough – he's not even due to start for another six months – but what BP really sees in Mr Svanberg is the experience picked up during his six years at the helm of a very large, complicated and, above all, international business.

Some bits of Ericsson's international business will have had special resonance with BP's advisers. It has been in Russia – a market for BP that is crucial and tricky in equal measure – since the early Eighties, and is now the country's biggest telecoms infrastructure supplier. Mr Svanberg's nous in dealing with the Russians ought to come in handy at BP's TNK subsidiary, and he has extensive contacts in several other key developing markets.

Also in Mr Svanberg's favour is the reluctance he showed at Ericsson to be drawn into the game of expansion through relentless acquisition, a flawed strategy that BP knows a bit about itself, and which some of his rivals employed.

Still, this is a brave appointment. For many large BP investors, Mr Svanberg will be a relative unknown, and they will need some convincing that he's the man for the job. Time for the Swede to hit the phones he's spent so many years selling.

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