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BP announces 'green' strategy
London: Oil and gas major BP has announced plans to spend up to US$8bn on developing alternative energy supplies in the next decade. The initiative comes in spite of continuing uncertainties regarding its flagship "clean" power station at Peterhead.

BP has said that it will create a separate business to deliver the renewables strategy, and that the new division will focus on the development of four sources of energy: solar, wind, hydrogen and cleaner gas-fired power.

The Peterhead plant - which could provide energy for one million homes when it comes on stream in 2009 - is set to be the world's first major hydrogen power station. The carbon dioxide it emits is to be put back into the North Sea's Miller field, one of the biggest examples yet of carbon capture.

BP executives however said the project was still facing "uncertainty" because of ongoing talks with the government over financial support. They also said that BP had yet to prove the technology.

On the launch of the new strategy, BP chief executive Lord Browne said: "We are now able to invest in this part of the business economically - able to grow revenues and profits ... The world will need hydrocarbons for some decades, but we need to look beyond that - to the future energy needs of the world.

He said the division had the potential to deliver sales of about US$7bn a year within a decade, although he added that a "step by step" investment process would be used depending on the progress of new technology.

BP's wind-farm investment will be injected chiefly into brownfield sites in the US - where the group owns swathes of land from disused mines. BP said the solar power market grew 30-40 per cent last year, while production costs have come down.
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Merck to slash 7,000 jobs over three years
New York: Merck, America's third-largest drugmaker has confirmed plans to cut 7,000 jobs - about 10 per cent of its workforce - over the next three years as part of a scheme designed to cut costs by up to US$4bn.

Earlier this year Merck was found liable for failing to provide sufficient warning about Vioxx's risks in a trial and told to pay damages of more than US$250mn. A second, similar lawsuit, however, was thrown out. The company has denied negligence in its handling of Vioxx.

Shares in Merck have fallen by nearly 50 per cent since it voluntarily withdrew Vioxx from sale last year. The company, which has recorded a drop in earnings for each of the past three years, expects restructuring charges of between $1.8 billion and $2.2 billion. It will also close or sell five of its 31 manufacturing plants.

Richard Clark, Merck's chief executive, said the job cuts announcement was a "first step" for the company, which is facing a further down-turn in revenues as key patents expire.

Merck expects the programme to lead to total savings of $3.5 billion to $4 billion from 2006 through 2010. The company is defending itself in approximately 6,400 legal cases brought since Vioxx was withdrawn last year.
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HSBC chairman Bond to retire May 2006
London: John Bond, who helped to build HSBC Holdings into one of the world's largest financial institutions, will retire from the chairman's post in May, HSBC said Monday.

His replacement will be the bank's chief executive, Stephen Green, a longtime HSBC banker.

Green, 57, is a former McKinsey consultant and also an ordained deacon who preaches in his local church in London.

Bond, 64, spent his entire career at HSBC, and investors and analysts attribute the bank's above-average performance to the risk-adverse, practical culture that he helped to create there. Bond spent most of his career in Asia, working there for 25 years, including a stint in Hong Kong as HSBC's head of commercial banking operations. He also ran HSBC USA in the 1990s.

With 250,000 employees and more than 100 million customers, HSBC is currently the world's third-largest bank by market value, behind Citigroup and just slightly behind Bank of America. The company has a market value of £105.9 billion, or US$182.5bn.

HSBC has successfully managed to avoid a lot of pitfalls that many of its contemporary institutions have fallen prey to, such as scandals stemming from trading violations, peddling over-hyped telecommunications stocks or aiding fraudulent corporate entities such as Enron. According to analysts Bond tenure has demonstrated that it is possible to run a global, world-class, successful banking organization with the highest standards of conduct.

In recent years, world's no.1 banking institution, Citigroup, has faced investigations over European bond trades and a lawsuit charging that it issued biased research, and had its private banking license suspended in Japan.

Bond's successor Green, a graduate of Oxford University with a master's degree from the Massachusetts Institute of Technology, took responsibility of HSBC's investment banking division in 1998. Michael Geoghegan, chief executive of HSBC's British operations, will become the chief executive of the parent company in May 2006, when Green steps into Bond's shoes.

Geoghegan joined HSBC Group in 1973 and since then has spent 12 years in North and South America, 8 years in Asia, 7 years in the Middle East and 3 years in Europe.

In Britain, the chairman decides the strategic direction of a corporation, while the chief executive focuses on the day-to-day operations.
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Lavagna, Argentina's finance minister forced out
Monterrey, Mexico: Roberto Lavagna, Argentina's economy minister, who led the country's rehabilitation in financial markets, was yesterday forced to resign, raising new doubts over the sustainability of the country's economic recovery.

Lavagna, who took over the economy at a stage when the country was still mired in crisis after its default and devaluation at the end of 2001, was asked to go by President Néstor Kirchner. Bond and share prices fell on the news, and the weak currency slipped further.

Friction between Lavagna and the President intensified in recent weeks, as Lavagna refused to participate in last month's legislative elections and, more recently, because of remarks he made last week. He said there had been over-pricing in public contracts to build roads, comments seen as an attack on Julio De Vido, planning minister and a confidante of the president.

Guillermo Nielsen, finance secretary, also stepped down yesterday, following Lavagna's resignation. Earlier this year he concluded the biggest sovereign debt re-structuring in history.

On the job, Lavagna posted record primary surpluses, before taking into account debt interest payments. He mentioned to a newspaper that he had done so by "saying no to the vested interests".

Government spending has risen 24 per cent this year, a jump that many associate with President Kirchner's long and expensive political campaign ahead of last month's elections. Kirchner's supporters in the centrist Peronist party scored a big victory at the polls.
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