Chairman who brought BP through the 1975 oil crisis OBITUARY SIR DAVID STEEL:

Thursday, Aug 12, 2004

Sir David Steel, the former chairman of BP who has died at the age of 87, steered the oil group through one of the most turbulent periods in its history when it faced disruptions to its crude supplies abroad and political interference at home.

Sir David, a war hero, took over the chairmanship in 1975 when BP was still struggling to adjust to the Opec oil crisis, which had cut crude supplies, pushed prices to new highs and hit the company's refinery business as demand for downstream products slumped.

Admittedly, BP was poised to bring on new supplies from its Forties field in the North Sea. But that too was fraught with problems - albeit of a different kind.

Tony Benn, the Labour leftwinger, was energy secretary and Sir David warned that the government was likely to treat the North Sea oil bonanza as "a political football". Mr Benn was thwarted in his initial desire to bring BP under state control - though only after the company produced the original Treasury letter of 1914 spelling out the limits of the government's power over BP.

Mr Benn still kept up the pressure. Sir David later recalled his frequent meetings with the energy secretary. "I could always tell when he was going to twist my arm," he said, "because he would say: 'Oh David, have a whisky' - and he would get a little bottle out of a cupboard somewhere."

Sir David showed characteristic calmness, courtesy and steely determination in his dealings with Mr Benn and by 1977 things were looking up for BP. The Forties field was producing 500,000 barrels a day and, after many problems, the Trans-Alaska Pipeline started shipping crude from Prudhoe Bay where BP had a large stake.

Sir David was able to tell shareholders that the BP group had added 1m barrels a day to the oil supplies available to the world.

But the rollercoaster ride on the wave of world oil shocks was not over yet. The following year saw another Opec oil crisis plus the fall of the Shah of Iran and the nationalisation of BP's Nigerian assets. "The people who used to sell our oil have suddenly had to become pretty expert at buying," remarked Sir David, at the time with what was seen as masterly understatement.

Oil prices started soaring towards Dollars 40 a barrel - equal to Dollars 80 a barrel in today's terms, which puts the current price rises in the shade. Yet it was the vast increase in prices that enabled BP to carry on making profit despite lower volumes.

What Sir David had done was to steer the group back to stability. It was not the first time he had shown coolness under fire.

Born in 1916, David Edward Charles Steel, the son of a senior civil servant, was educated at Rugby and then read law at Oxford. On the outbreak of the second world war, he was commissioned in the 9th Queen's Royal Lancers and was sent to France where he became the youngest subaltern to win the DSO.

He was mentioned three times in dispatches and won the Military Cross. He was regarded as fearless, though he rarely spoke of his exploits and insisted that he had just been lucky.

After the war, he qualified as a solicitor and joined Linklaters and Paines before going into the legal department of the Anglo-Iranian Oil Company - soon to become BP.

He stood down from the BP chairmanship in 1981 and became, for the next seven years, chairman of the Wellcome Trust. Despite some opposition, Sir David decided the trust would benefit from having its pharmaceutical business floated on the Stock Exchange in 1986.

The business expanded - so much so that the trust became the richest charitable concern anywhere.

In 1956, David Steel married Ann Price, a Canadian, who died in 1997.

The couple had a son and two daughters.

Sue Cameron

By SUE CAMERON