Top Sohio Officers Fired as BP Takes Direct Control

Top management at Standard Oil of Ohio was fired in a surprise move Thursday as dissatisfied British Petroleum, owner of 55.5% of the Cleveland-based oil giant, took direct managerial control for the first time.

The British concern said it wanted “the best possible professional leadership” at the helm of the world’s 10th-largest oil company as the industry heads into a “critical” period of collapsing oil prices.

Analysts said BP was unhappy with Standard’s record in finding new oil and with the outcome of its 1981 purchase of Kennecott, the copper firm. Standard wrote off that investment as part of a $1.15-billion charge against earnings in 1985’s fourth quarter.

Moreover, Standard is regarded as especially vulnerable to the decline in crude oil prices because of its huge Alaskan reserves.

Ousted were Alton W. Whitehouse Jr., 58, chairman and chief executive, and John Miller, 48, president and chief operating officer.

The new chairman and chief executive is Robert B. Horton, 46, a managing director of BP. Frank E. Mosier, 55, a Standard executive vice president, was named president and chief operating officer. Two other BP officers, E. John P. Browne, 37, and J. Colin E. Webster, 49, were installed as executive vice presidents.

“This is a critical time for the oil industry and especially for Standard Oil,” BP Chairman Sir Peter Walters said. “BP believes it is also an appropriate time to strengthen Standard Oil’s management to cope with the difficult environment ahead.”

The lengthy statement contained none of the customary thanks to departing executives for a job well done. Analysts said the drop in oil prices brought to a head BP’s dissatisfaction with Standard’s performance.

A separate statement from Standard’s board said BP wanted “a management team in which they had more confidence.”

Whitehouse, a lawyer, took over as chairman in 1978 after 10 years at the firm. Miller, a career Standard man, became president in 1980.

Standard Oil became the world’s biggest copper producer with its $1.7-billion purchase of Kennecott. But the copper unit subsequently lost about $100 million a year.

Expensive Dry Hole

“It was a disaster,” said oil analyst Elmer L. Meszaros of Roulston & Co. in Cleveland. But he said the firings were a surprise because “it hasn’t been BP’s style” at Standard Oil. “They’ve been very low key and usually accomplish what they want quietly.”

Standard has had a below-average record of exploration. It sank $430 million into the most expensive oil well ever drilled--at Mukluk Island in Alaska--that turned out in 1984 to be a dry hole.

“Suffice it to say that BP has not been completely satisfied,” said analyst M. Craig Schwerdt of Morgan, Olmstead in Los Angeles.

The housecleaning at Standard Oil came two days after the company announced that it was dropping the “Ohio” from its name. It was one of the companies formed in 1911 as part of the court-ordered breakup of John D. Rockefeller’s Standard Oil empire.

Majority Ownership in 1978

BP bought 25% of the firm in 1969 because it needed a refining and marketing outlet for its newly discovered Alaskan reserves. It became a majority owner in 1978.

After the $1.15-billion special charge in the fourth quarter, Standard Oil earned $308 million for the year, compared to $1.49 billion in 1984.