Concern over BP’s South African image
While British Petroleum’s public relations nightmare has not, according to the South African head office, had any effect on sales at the pumps, some BP service station owners in South Africa have indicated they are worried that customers may wage an unofficial boycott.
The continued leaking of millions of gallons of oil into the Gulf of Mexico from a BP offshore well since an explosion on April 20 caused what some commentators have described as a environmental disaster of ‘biblical proportions’.
The market reaction has resulted in a 36 percent drop in BP’s share price during May, according to Bloomberg, with the company experiencing an estimated $70billion loss in market capitalisation.
But “there has been no drop in sales (of fuel) in South Africa”, said BP South Africa head of external affairs Joe Mahlo this week.
Mahlo said he was not concerned about future sales and, “as for the share price, investors will interpret what is happening in the US and make up their own minds. Obviously it would be better if the share price was up”.
Yet some BP fuel station managers contacted said they were concerned motorists would fill up elsewhere.
“Its (potential for a drop in future sales) something I’m concerned about,” said Dirk van Zyl, general manager for Malmesbury and Atlantis BP filling stations. He said he was worried about BP’s public image.
“I’d like to see them resolve the issue,” he said.
A station in Gordon’s Bay and on Koeberg Road said business had been quieter of late, and many stations declined to comment, diverting queries to the head office.
However, one station manager said he had an increase in sales over the past month.
“The sales have gone up,” said Zirkie Schroeder, bookkeeper for the BP Sandown Service Station in Bloubergstrand.
Schroeder said she believed the public image of BP in South Africa was disconnected from the global brand. “I don’t think people really connect the incident (in the Gulf of Mexico) with BP South Africa,” she said.
John, who refused to give his surname, from Durham Station in Salt River, felt it was too early to tell whether the station would feel a knock. However he remarked that winter in Cape Town is historically a low time for businesses. As for BP’s image, “mistakes happen and people understand that”, he said.
Bloomberg this week reported a 10-20% chance of the company being taken over after becoming an acquisition target although found it more likely that it would sell off its biggest assets in order to foot the potentially tens of billions of dollars it will cost in terms of capping and cleanup operations. – West Cape News