BP Chief Resigns Abruptly Over Relationship Furor

BP chief executive John Browne resigned yesterday following revelations in a London newspaper about a four-year relationship he had with a Canadian man and a British judge's assertion that Browne had lied to the court during a bid to block publication of the story.

The resignation, effective immediately, brings an abrupt end to Browne's 41-year career at BP. He joined British Petroleum as a university apprentice and as chief executive transformed it into a "supermajor" oil company by buying big U.S. oil companies Amoco and Arco and establishing an exploration venture in Russia. And he rebranded the firm as BP for an environmentally conscious era "beyond petroleum."

Under pressure recently over a deadly refinery explosion and Alaska pipeline leaks, Browne had already accelerated his departure date and was scheduled to leave his post at the end of July. BP said that by making his resignation effective immediately, Browne would lose $7 million in salary and bonus and possibly as much as $24 million in stock benefits.

"For the past 41 years of my career at BP I have kept my private life separate from my business life," Browne said in a statement yesterday. "I have always regarded my sexuality as a personal matter, to be kept private. It is a matter of personal disappointment that a newspaper group has now decided that allegations about my personal life should be made public." A BP spokesman said Browne did not want to elaborate on his statement.

In an article on the Web site of a British tabloid, the Mail on Sunday, Browne's former companion Jeff Chevalier alleged that Browne had used company "resources" to help him. He said Browne sent BP staff members to give him cash, let him use BP computers and technical support, and helped him set up his own company.

The article also described Browne's apartment in Venice; conversations Browne allegedly had with British Prime Minister Tony Blair about Blair's plans for when he steps down from office; a conversation Browne allegedly had about E.U. policy with Peter Mandelson, the E.U. commissioner, and bodyguards Browne allegedly took on a pair of business trips to Libya.

Browne, 59, fought in court for four months to block publication of the article, saying that it violated his right to privacy and that its allegations were false. In his statement yesterday, Browne said: "These allegations are full of misleading and erroneous claims. In particular, I deny categorically any allegations of improper conduct relating to BP."

BP sources said that Browne had disclosed the allegations of misusing company resources to BP's board two months ago. Documents released by the court show that Browne's earlier departure announcement came a week after the Mail on Sunday contacted BP about its story. Yesterday, BP board chairman Peter Sutherland said that the board reviewed the allegations and decided they were "unfounded or insubstantive."

Justice David Eady wrote in a ruling released yesterday that Browne "quite deliberately, and casually, chose to lie" to the High Court.

Browne acknowledged making a false statement to the court, but he said that it was only about how he had met Chevalier. He told the court that they had met by chance while he was exercising in Battersea Park in London; in fact, a source close to Browne who insisted on confidentiality to protect their friendship, said yesterday that the two had met through an escort service.

Browne said the false account was "prompted by my embarrassment and shock at the revelations." He added it "is a matter of deep regret. . . . I have apologized unreservedly, and do so again today."

The source said the BP executive had used the Battersea explanation of how he and Chevalier had met in conversations with friends. Browne made little effort to hide his relationship from friends and close aides.

A graduate of Cambridge University and Stanford University's business school, Browne has never been married and lived with his mother in an apartment near the Thames until her death in 2000. She was a Jewish survivor of the Holocaust. Browne's father was a former British military officer who went to work for BP and served for many years in Iran. As chief executive, Browne would occasionally bring his mother to meetings or dinners with other executives.

Before Browne took over as chief executive, British Petroleum was a lackluster oil company. He bolstered its holdings in the Gulf of Mexico, bought up the half interest in Standard Oil Co. (Ohio) that BP did not already own, and then swallowed up Arco and Amoco. When he was done, BP was second in size among the world's nongovernment oil companies, after Exxon Mobil.

In 1997, Browne gave a landmark speech at Stanford calling for "precautionary action" on climate change when most companies were denying its existence. "We must now focus on what can and what should be done, not because we can be certain climate change is happening, but because the possibility can't be ignored," he said. He added that "to be sustainable, companies need a sustainable world."

Paul Bledsoe, who was then working at the Interior Department, said that Browne's speech "marked a key turning point in industry attitudes, legitimizing the notion that business interests could to some extent coincide with climate action, especially regarding energy efficiency and corporate reputation."

But the past two years have been troubled ones for Browne. A BP refinery explosion in Texas City, Tex., killed 15 people in May 2005, and maintenance lapses led to a series of Alaska pipeline leaks last summer that sharply curtailed production at the largest U.S. oil field. Delays have also plagued the launch of a production platform in the Gulf of Mexico.

Tony Hayward, already slated to replace Browne on Aug. 1, will take over immediately, BP said.