Power Play

03.09.14

BP, Putin, and the Power of Oil

John Browne ran BP for twelve years, his career shattered after a gay sex scandal. He reveals how being forced “out” helped rebuild his life, why oil and gas will always be used “as a weapon,” and how to best deal with Vladimir Putin

Vladimir Putin, says John Browne, the former chief executive of BP, is a master tactician. “He is the definition of ruthless, which is to say he shows no emotion whatsoever and has actually no expression as well. He has one of the least-lined faces of anyone I have ever met. He has a total poker-face. You get used to it.” Did Browne, or Lord Browne of Madingley, to bestow his proper English title on him, ever make Putin smile? “No,” Browne says resolutely, then adds softly, “When I said ‘Goodbye’ perhaps. He was happy to see me go.”

The embodiment of debonair, the 66-year-old, who now is Chairman of the Board of Trustees of Tate Galleries as well as a private equity firm, is sitting, dressed in crisp shirt and tie, hair a luxuriant-if-sober salt-and-pepper pompadour, in his Four Seasons Hotel room in midtown Manhattan.

Browne, who ran BP from 1995 to 2007 before a gay sex scandal forced his resignation, knew Putin because of BP’s many Russian dealings. In 1997 BP launched its first step into Russia by purchasing a 10 per cent stake in the oil and gas business Sidanco. The complicated deal, he writes in his new book Seven Elements That Changed The World, led Browne to think of Russia’s oil oligarchs as like the 19th-century American robber barons: "the development of oil tends to concentrate power and wealth in the hands of only a few."

When BP tried to build a pipeline from Baku to Turkey via Georgia, to explore the oil possibilities of Azerbaijan, “the Russians didn’t want it developed at all and used fantastic destabilization techniques and day-to-day low-level guerilla activity,” Browne recalls. Under his tenure, BP also gained access to Russian oil reserves with the creation of the conglomerate TNK-BP.

In his book, Browne writes, convincingly, that possession of the seven elements – iron, gold, silver, uranium, titanium, silicon and most particularly carbon – controls a country's destinies,  endowing them with power. Observing the tumultuous events in the Ukraine, and the possibility Russia may hold the country to ransom over fuel supplies, Brown says he hopes Ukraine determines its own future. “I hope cool heads will prevail and we go back to a situation where negotiation will take place. Democracy is important for energy security.”

Sure, but if one country holds the supply cards, what then? “Energy is used as precisely this bargaining chip,” Brown concedes. “It’s been the calling card for Russia, post the Soviet Union. It’s not the only place that has used energy as a weapon. The Middle East has used it historically. Energy will always be used as a weapon. Nobody should overreact here, and they should think through the consequences of their actions. If Putin turned off the gas to Europe, people would never forgive him.”

Browne’s gently-gently approach may be in no small part influenced by his own continued Russian interests and oligarch links. He is an advisor to Mikhail Fridman’s L1 energy fund (Fridman is reputedly Russia’s second richest man with a fortune estimated at nearly $18 billion). When I ask what today’s oligarchs are like, Browne namechecks other wealthy friends like Viktor Vekselberg and German Khan. “They didn’t just sit there and take money, they took huge risks. They were very tough indeed but insightful, although their system of patronage is not something we would be comfortable with.”

Shouldn’t companies like BP make a principled stand if leaders like Putin behave in a beyond-the-pale fashion? Browne admits he “didn’t like” Putin’s recent introduction of anti-gay laws, “but I didn’t think a boycott would do a thing – he would have just thought ‘People like that are doing exactly what I want to stop.’” So, what is the solution? “Slow pressure changes things. I would remind you a quarter of a century ago that the UK Parliament passed a very similar law.” (Indeed: he is referring to the infamous “Section 28,” which outlawed “the promotion” of homosexuality).

BP, Browne says adamantly, “has to stay out of politically partisan activity. We have a very clear business agenda and that never changed. Companies have one responsibility: they either stay or go. They cannot intervene bit by bit.”

In Europe, more energy sources would prevent such a harmful reliance on Russia, which is one reason Browne is pro-fracking. “I think it can be done safely and securely.” If fracking doesn’t cover the landscape with wells and is “very careful with water tables,” Lord Browne deems it safe and secure. "It’s a very important addition to Europe’s energy balance." Fracking, he is fond to remind people, is not a new invention: it first took place after the Civil War with a certain Colonel Roberts’s Torpedo Company.

His book, he hopes, combines science, geopolitics, and larky history. The first nuclear reaction took place on a doubles squash court, which the Russians misinterpreted as taking place in a pumpkin field. While carbon is Browne’s favorite element, silicon is his second - not just because of all the technological innovation centered around it, but also because he and his partner Nghi (pronounced “knee”) Nguyen own a lot of treasured glass, including a collection of glass elephants.

The most harrowing part of Browne’s research took place in Hiroshima when he was writing about uranium. “There as a very good reason the bomb was dropped, but the consequence was that thousands of people died. When you go to a place of death you think of all the people it represents.”

Browne was known as a  “green” CEO, looking to fund sustainable new energy sources and to curb environmental damage. “We were in a very strange place. We were in the business of hydrocarbons and everybody wanted hydrocarbons, but knew we might face a situation of no hydrocarbons in the future. But you can’t just turn a switch and change. It’s all about ingenuity.” As for climate change, “Everyone knows the right answer is if we put the right price in carbon we will surely produce the right incentives to reduce the use of carbon.” But the time to do this is not when “everyone feels poor.” But in a world of cutbacks and recessions, when will “we” feel any different?

Browne admits the book is a testament to his inner science geek. He recalls that aged 10 he read, and was fascinated by–despite it being printed on “really cheap wartime paper”–Concerning The Nature of Things by Sir William Bragg. Browne’s father was a British army officer and his mother a Hungarian Auschwitz survivor. “The Britain of the 1950s was an uncomfortable place for a foreigner to be. ‘Foreigner’ was almost a pejorative. It was all England for England."

When his father worked for Anglo-Persian Oil, later to become BP, the family moved to Iran. “When you’re an only child, you’re very self-sufficient and you take care of yourself, and you’re social – you get to know a lot of people.” He thought about becoming a doctor, but “all the blood didn’t suit me well.”

A love of math, and an extraordinary teacher of the same, opened up science for him. In 1966 Browne joined BP as an apprentice; his postings with them bought him to the US. In the early 1970s, arriving for the first time in New York in the middle of a garbage strike,he recalls sackfuls of trash piled up and frozen. In San Francisco he discovered the gay epicenters of the Castro and Polk Street.

This was Browne’s first substantive opportunity to explore his homosexuality and meet men. He’d realized he was gay at 13 and while he desired other boys at his English private school “it was remarkably devoid of sexual activity, even though everyone assumes they’re hotbeds. I kind of realized I was different, but wasn’t quite sure what to do about it – and I couldn’t talk to anyone about it.”

Today he notes he was coming to terms with being gay at a time of the Wolfenden Report, which recommended decriminalization of homosexuality, and the eventual passage of the 1967 Sexual Offences Act, which decriminalized male homosexuality between two people over the age of 21 (lesbian sexuality was never outlawed in the UK; Queen Victoria famously didn’t believe it existed).

To the young Browne homosexuality seemed “obviously dangerous. It led to deep frustration for many years.” He met “literally” one or two guys, “terrified,” until coming to New York and discovering Greenwich Village. “The Village was bohemian and being gay was a subset of that and terribly self-conscious. It wasn’t a way of life, it was a ghetto. It changed eventually, but at that stage it was still rather tentative, but terrific. You could meet people the same as you. It was a big eye-opener, they were quite normal. Some of them pretty repressed -repressed was the average at that time, but there was lot of them.”

Browne was climbing the BP corporate ladder, holding a number of executive positions, before heading to Cleveland, Ohio, for more executive office-holding at Standard Oil of Ohio. BP and Standard merged and in 1991 Browne joined BP’s board as Managing Director, becoming the Chief Executive in 1995. “I was very concerned about anybody discovering anything about my sexuality apart from those in my very small private life. I believed that it would get in the way in how I was treated by others - that’s important. There was a sense that because I kept it secret I wouldn’t be able to explain why I kept it secret. Having two lives early on seemed to be quite thrilling: that was the strange thing.”

In 2007 a British newspaper published a story alleging that Browne had paid a younger partner throughout their four-year relationship, as well as claiming he used BP resources to help his ex. Browne then lied in a court deposition about how he had met the former partner: he had originally said while exercising in a London park, but in fact it had been via a gay website called Suited and Booted. He said he had lied out of sheer panic at having his homosexuality exposed.

I ask whether he would have come out had the scandal not forced him to. “I don’t know – that’s a tough hypothetical to answer,” says Browne. “I was very used to living two lives, and I suppose you think to yourself, ‘This is normal.’" I wonder if it became debilitating as he became older. “It must do,” he said quietly. “I do think I would have come out in the normal course of events. I just don’t know when.” After retiring? I ask. “Probably. But the fact is I didn’t and created a lot of complexity around the process of not coming out. It certainly was complex running two separate lives. With a busy agenda, just keeping track of my diary alone was quite complicated.”

Browne was going to leave his job a year after he resigned anyway, but how did he cope leaving in the way he did? “'Not good’ is the answer. I did nothing to start with. I relied on my friends tremendously.” He had to hide from the paparazzi for four days, and then began to think about “how to start again.”

Corporate life, if you’re gay or straight, “squeezes everything out,” Browne says. His father died in 1980 and he was very close to his mother, a milliner, too. “She just didn’t want to know about this,” he says of addressing his sexuality with her. “I tried to tell her but she didn’t want to know.” She died, aged 83, in 2000 of cancer.

So the scandal, bruising at it was, was oddly liberating, I say. “Actually, it’s not ‘oddly.’ It was just liberating,” says Browne sharply. “It obviously changed my life, I like to think for the better. I’m a much happier person now. I have a great relationship (with Nguyen, a 40-year-old former Goldman Sachs banker, who he has been with for seven years). I have a great partner. I’m doing interesting things. I don’t think of myself as a businessman, pure and simple. There is balance in my life, and it can be rebalanced all the time.”

He and Nguyen met after the latter sent Browne a letter. “It was very old-fashioned and curious. I responded. One thing led to another.” They haven’t decided yet if they will marry; gay marriage is made officially legal in the UK this Thursday. Browne “did a lot of work” in the House of Lords to get the same-sex marriage legislation passed and “uncovered quite a lot of hidden prejudice” in so doing.

This May, Browne will publish another book, The Glass Closet, his version of the glass ceiling, which he says prevents out-gays from progressing in the field of business. The best way to effect change? “Just come out,” says Browne.“Remember you’re not alone.” The business world is “changing slowly, but it’s still behind. Life is full of the presumption of heterosexuality: wherever you go, it’s around. It’s sort of enhanced in business.”

Browne doesn’t think about ageing and retirement seems a “silly idea. As long as you’re healthy both in mind and body I think life has to contain work.” He would like to write more books, fiction perhaps, and doesn’t miss running BP one iota.  

Freud, Browne says, said life was love and work. His working life now settled, how about love then?Browne laughs. It is “very much important. I think I am beginning to get that sorted out.” He means with Nguyen? Is it the first time he has? “I think so,” he says. “It’s a very nice feeling. People say I’m much happier than I used to be. I smile much more, I laugh a lot and I like waking up in the morning and doing something creative and different.”

His basic advice to just come out matches the heroic, slain San Francisco city supervisor Harvey Milk’s, I say. “Sometimes the oldest advice is the best,” Browne says. You sense he wished he’d heeded it years before the decision was taken so dramatically out of his hands.

Seven Elements That Changed The World: An Adventure of Ingenuity and Discovery is published by Pegasus Books/W.W. Norton