BP warns of Iraq war fall-out

Oil giant BP today warned its shareholders that the company faced a year of volatility and uncertainty due to global economic and political turbulence.

Speaking at BP’s annual meeting in London, chairman Peter Sutherland said: “It is an understatement to say that these are troubled times.”

But he added it was a measure of BP’s long-term performance that it had delivered a higher rate of return to shareholders against the market over the past decade than any of its competitors in the energy industry.

The meeting was marred by demonstrations outside the Royal Festival Hall on London’s South Bank. Shareholders were greeted by protesters including the climate change group Rising Tide outside the meeting.

Inside the Hall, BP directors said it remained to be seen whether the company would have any involvement in Iraq after the US-led military intervention.

Mr Sutherland said: “It is not part of our current strategy, and what I will say is that there will be no involvement without the support of an Iraqi government recognised by the world community and the Iraqi people.”

BP’s board largely escaped the predicted shareholder revolt against the remuneration package proposed for chief executive Lord Browne.

Mr Sutherland said the war in Iraq had provided BP with a “tremendous challenge” due to the volatility of global oil prices which fluctuated between lows of 19 US dollars and highs of 34 dollars during the past 15 months.

Looking ahead, BP warned that 2003 could see further fall-out from the war in Iraq, uncertain economic prospects and low growth rates.

“Current events have clearly damaged consumer and business confidence,” the company added in a statement.