BP wins battle for Britoil in Govt deal

Press, 25 February 1988, Page 26

BP wins battle for Britoil in Govt deal

NZPA-Reuter London Oil multinational, British Petroleum Co., Pic, (BP) on Tuesday won a long battle for control of a smaller British oil company, Britoil, Pic, when the Government agreed not to exercise special rights which it holds in Britoil. In return, BP undertook to meet certain conditions. Britoil owns valuable North Sea oil and gas resources. It has built up an 30 per cent stake in Britoil in a £2.5 billion (SNZ6.SB) takeover.

Chancellor of the Exchequer, Nigel Lawson, announcing the decision in Parliament, said the Government had accepted BP assurances on North Sea investment and job plans for Britoil. “The Government have

told BP that, in return for these assurances, and so long as we are satisfied that BP are complying with them, we do not intend to exercise any of the rights attaching (to) the special share,” he said.

He was referring to a so-called “golden share” which the Government holds in Britoil, conferring the right to out-vote all other shareholders, which is a legacy of a time when the Scottish-based firm was under State control.

BP also agreed that Britoil’s board will be headed by a non-executive chairman with no prior BP connections whose appointment would be agreed with the Government, Mr Lawson said. The Government had been reluctant to give up

its rights because of fears that North Sea exploration would be sacrificed by BP in favour of its overseas operations and also because of Scottish misgivings about possible job losses. Under the agreement, the Government would still have a right to vote on corporate management issues and will have joint say with BP on the appointment of the majority of non-executive board members, Mr Lawson said. He said the purpose of the Government retaining a golden share when Britol was privatised was to * prevent an unacceptable bidder from gaining control.