Three months on, the consequences of the Deepwater Horizon disaster are becoming clearer. BP has a new leader - a quiet American who, as head of TNK-BP, a joint venture in Russia, has already held one of the world's toughest jobs. The company is emerging from weeks of crisis conscious that much still needs to be done to clean up the gulf, and its damaged reputation. But the value of its assets, likely to be confirmed by Tuesday's announcement of $30bn (€23bn, £19bn) of planned disposals, suggests a company worth more than its depressed share price implies.
For the industry the immediate impact will be more regulation, and a requirement for detailed (and perhaps pre-funded) plans to deal with accidents. Costs will rise, but more importantly new deepwater developments - seen as the salvation of international companies squeezed between declining old resources in the North Sea and elsewhere, and inaccessible new resources in much of the Middle East, Russia and Venezuela - will be constrained. Market power will shift back to the Opec states, the only available and relatively low cost source of new oil to meet growing global demand.
The more profound conclusion from the past few months, however, is that the cool long-term rationalism and global mindset of oil company boardrooms is inadequate in the face of the rough and tumble of short-term local politics. Companies such as BP wanted to see the world as a single market, but in reality national interests still predominate. We are entering a new world in which success will go to those who move beyond old visions of monolithic, centralised global enterprises towards new approaches built on partnerships and joint ventures attuned to local needs.
Strategy at this level must start from reality. The industry must face up to renewed public and political hostility. There will be greater scrutiny, not just of its environmental record, but also pay and bonus levels, and its use of influence to win access to developing countries. The immediate focus has been BP's moves in Libya, but the spotlight could turn to Nigeria, Angola or Kazakhstan. The oil sector is now an easy target for any politician with a microphone.
Major oil companies, with BP prominent among them, have spent 20 years trying to demonstrate their social responsibility. For the moment negative images will predominate, particularly in the United States, a country going through a spasm of paranoid hostility to big business, and foreign oil companies in particular, comparable in intensity to the campaign that broke up Standard Oil a hundre years ago. Many companies, not just in the oil industry, are now nervous of doing business in the US. Just as BP has replaced its British CEO with an American, so another major player is reconfiguring its top team to ensure it has a more friendly American accent. Others are reconsidering routing their global profits through US companies, given the risk that a single accident could put such funds in jeopardy.
Important questions of size and culture also face the industry. The international oil majors pretend they are uniform global operations, but in truth they are conglomerates that mix largely disconnected business streams handling exploration, production, refining, trading and marketing. Each of these streams then works in multiple countries. To this complex mixture a decade of mergers and acquisitions have added problems of cultural and national diversity. The big companies have all stressed the appointment of local figures to important roles, while also trying to establish a global corporate culture. This push for local diversity is not simple political correctness, but a consequence of the strategic need to grow in previous unknown territories.
For investors, Deepwater Horizon raises serious questions about the ability of even the best companies to cope with different cultures. Measured on a ten year basis the value of shares in BP, Shell, and Total has fallen respectively by 28, 30 and 3 per cent. Over the same period Exxon, whose acquisitions have retained the cultural unity of the company, saw its share price rise by 134 per cent. The problem lies not in the pursuit of diversity itself, but failed attempts to marry this with a global corporate model in which all roads lead back to a head office in London or The Hague.
Political considerations are now encouraging a rethink of centralised structures. The industry needs access to the world's growth markets. Over the past three years oil demand in Europe and North America - home to most of the industry's existing refining and marketing base - has fallen. Yet Chinese demand rose by over 20 per cent last year. Demand in India is also growing rapidly, but neither country is likely to hand control to European or American companies.The result is that, from necessity, a new model is emerging with a patchwork quilt of activities in which smaller national and larger international oil companies must work together in new partnerships. The resulting new entities will be local in nature, but with access to global skills and capital. Many will be joint ventures, such as TNK-BP where BP's chief executive Tony Hayward will move as a non-executive director, held on a 50:50 basis between local investors and an international partner.
The next could be a deal between one of the majors and the Chinese, or an American partnership under which a US business takes a majority stake in some of BP's North American assets.
Each such venture will need to be of manageable scale, and be agreed with relevant governments. These political partnerships will ensure a degree of insulation from the type of problems that have befallen BP, while providing oil firms access to markets currently beyond reach. Such ventures will not be simple to run, and will not transform the reputation of the industry overnight. Yet the tragedy of the Deepwater Horizon may prove to be the catalyst which reminds the industry that to be successful it must be local as well as global.
