TONY HAYWARD got his life back yesterday.
BP’s chief executive had infuriated the families of 11 men who were killed when BP’s Deepwater Horizon oil rig exploded on April 20th by telling a television interviewer, “I would like my life back”. When BP yesterday announced Mr Hawyard’s demotion and replacement by Robert Dudley, the first American to head the former state-owned British Petroleum, several US commentators joked that Mr Hayward had been banished to Siberia.
Mr Hayward will become a non-executive director of TNK-BP, the company’s joint venture with a group of Russian billionaires. He said he was stepping down “for the good of BP, and particularly the good of BP in the US”.
"You know your company is in a hole when . . . the next chief executive is lauded for his twang," the Wall Street Journalquipped regarding Dudley, who grew up partly in Mississippi. He began his career with Amoco in 1979 and moved to BP when it took over Amoco in 1998.
Analysts said Mr Dudley’s appointment showed the priority BP places on putting the oil spill behind it, and on restoring good relations with the US, where it does 30 per cent of its business and where 40 per cent of shareholders live.
BP faces a half dozen official inquiries, including a commission appointed by President Barack Obama, a criminal investigation by the justice department, a joint investigation by the coast guard and the mineral management service and several Congressional investigations.
BP has an abysmal safety record in the US: a fatal explosion at a Texas refinery in 2005 (which brought down Mr Hayward’s predecessor), an oil spill in Alaska in 2006 and now the worst environmental catastrophe in US history. Congress is eager to limit BP’s future activities in the US.
Second quarter results announced yesterday in London show it may be some time before BP gets itslife back. The company lost $17.5 billion, and said the oil spill has cost it $32.2 billion already, including the $20 billion compensation fund established at the demand of President Obama. Analysts say clean-up costs could eventually reach $60 billion. Since the spill, falling share prices cut $70 billion off BP's market value. To allay these costs, BP will sell up to $30 billion in assets next year. In recent weeks it sold $7 billion in assets to the Apache Corporation.
Speaking to ABC television on the 99th day of the oil spill yesterday, Mr Dudley promised that cleaning up the Gulf will be BP’s top priority. “I think sometimes events like this shake you to the core, the foundation, and you have two responses: one is to run away and hide, the other is to respond and really change the culture of the company and make sure all the checks and balances are there, just to make sure this does not happen again,” he said, predicting: “BP will be a slightly smaller company.” BP successfully installed a temporary cap on the leaking well 10 days ago. A tropical storm interrupted clean-up efforts at the weekend and tossed miles of petroleum-soaked boom into the Louisiana marshes.
Thad Allen, the retired coast guard admiral in charge of the US government response to the oil spill, said the two-part procedure to permanently seal the leaking well should begin next week.
On August 2nd, BP hopes to stage a “static kill”, in which mud and cement will be pumped into the top of the well to force oil and gas down. Around August 7th, BP plans to inject mud and cement into the bottom of the well, laterally from a relief well. The US estimates that the well has spilled between 2.3 million and 4.1 million barrels of oil into the Gulf.
- BP Plc and British officials have "stonewalled" attempts by the US Senate to examine whether the oil giant influenced the release of the Lockerbie bomber, Senator Robert Menendez said yesterday. The senator postponed a Senate hearing on the issue because key witnesses refused to appear. He said it would be rescheduled.