From finances at BP to changing reader attitudes, we are experiencing a transition period

BP ENDED its own annus horribilis this week by reporting its first loss in almost 20 years. The oil giant fell £3.1 billion into the red for 2010, compared with profits of £8.7 billion in the previous year.

The cost of the Deepwater Horizon explosion, which left 11 workers dead and led to the worst environmental disaster the United States has suffered, has now been put at more than £25 billion. But if the road to financial stability looks a big climb, the effort to restore its shattered reputation will be even steeper.

BP began taking tentative steps toward burnishing its name with the announcement that it would resume dividend payments, suspended last year in the face of the wrath of the White House over its inability to cap the leaking oil well in the Gulf.

It was a tentative step though. The payout of 4.36p a share was half the amount the company was paying out before the disaster and even BP’s harshest critics can’t escape the fact that BP dividends make up a large part of UK pension fund income.

There was a feeling in the results that BP, under new management after the departure of gaffe-prone Tony Hayward, was clearing house.

Among the assets that have been disposed of was the Texas City refinery, where an explosion in 2005 claimed the lives of 15 workers.

The company has also outlined its vision for long-term growth through new exploration partnerships, although an agreement with the Russian firm, Rosneft, faces opposition from its other Russian partners.

Nothing it seems, runs smoothly for BP these days.

Bob Dudley, the chief executive, described the company as one in “transition”. BP, he said, would “emerge from this episode . . . safer, stronger, more sustainable, more trusted and also more valuable”. That is quite a goal, given the year BP has had.

But for all the gloom in the figures, at least the company is still here to report its financial results. There was a while, as the Gulf oil spill controversy raged, that real doubt existed as to whether BP could even survive as an independent company.

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IT EMERGED last week, in a tweet from one of the judges, that the panel awarding this year’s Man Booker Prize, the most important literary prize in Britain and Ireland, would be getting Kindle e-readers to plough through the submitted titles in electronic form.

At the same time, Amazon announced that sales of digital books had overtaken sales of paperbacks on its US site for the first time. Reading habits have been slower to change so dramatically in the UK, but it has now become commonplace to see commuters on the London Tube clutching an e-reader.

Manufacturers were heavily promoting the devices over Christmas and it was recently forecast that electronic and physical print in Britain could reach parity as early as 2014.

So the question arises, where does that leave the sole remaining British high street book chain, Waterstone’s? The answer is in a perilous state.

It was reported a few weeks ago that suppliers to the HMV Group, which owns Waterstone’s, had been denied credit insurance – a sure sign of fears for the health of the company.

It wasn’t so long ago the British high street had several big chains, but gradually they have all disappeared. Even before the electronic book, they were under pressure, from Amazon and from supermarkets that heavily discount blockbuster titles.

The market, experts now forecast, will split in two – into commodity titles that readers buy for their Kindles and premium books they want for their shelves or to give as gifts.

Few expect there to be a significant chain left on high streets within five years.

The one positive outcome for book lovers is that we could see a renaissance among the independent bookshops that have been dwindling in the face of the once mighty chains.

David Teather writes for the Guardiannewspaper in London