New BP chief: Priority is plugging well for good

By Mark Daniels
globalpoliticalawakening.blogspot.com

Well, we won't be missing Tony Hayward as he departs the United States.  Unfortnately, it won't do much to solve the problems created by these big oil companies.  It's just another ploy to distract attention away from the fact that "we the people" will be left holding the bag once again.

Tony Hayward's expected departure from BP applauded in US• 'Most hated man in America' has to go, say commentators

• Gulf oil spill gaffes by chief executive fuelled anger

• 'Top kill' seen as only way to salvage BP's reputation

Andrew Clark in New York
guardian.co.uk
Monday 26 July 2010 18.43 BST
Article History


There won’t be any tears shed over Tony Hayward’s departure in the US, where “good riddance” was the overriding sentiment in response to news that the BP boss is walking the plank.
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From Washington to the Gulf Coast, attitudes to Hayward are resoundingly hostile, with anger fuelled by the BP boss’s early attempts to play down the environmental scope of the Deepwater Horizon spill and by his stonewalling in response to questioning in Congress.

Tyson Slocum, director of energy campaigns at the Washington-based pressure group Public Citizen, described Hayward’s departure as “the minimum” needed from BP to begin restoring public confidence: “This company has to show the American public and lawmakers that there is going to be accountability. The buck has to stop somewhere and in a corporation, it stops with the CEO.”

BP chief executive Tony Hayward, left, and managing director Bob Dudley, who is tipped to take over, leave after a meeting with President Barack Obama at the White House. Photograph: Jim Young/Reuters

One tabloid paper, the New York Daily News, described Hayward as the “most hated – and clueless – man in America” and described his departure as “a BP top kill that works”. Rosabeth Moss Kanter, a management expert at Harvard Business School, published a list of leadership “anti-rules” modelled on Hayward including advice to minimise problems, emphasise your own importance, never apologise and “don’t even pretend to learn from your mistakes”.
Dan McGinn, a communications expert at Washington-based TMG Strategies, said Hayward had misjudged the public mood from the start of the crisis: "He stumbled out of the box, fell behind badly in the race and could never catch up."

A change at the top, McGinn suggested, could begin to turn around perceptions. He said: "The question people are asking BP is: 'Do you get it? Do you understand why people are so angry and frustrated?' What they're going to think is: 'It's late - but they've got it.'"

The White House refused to be drawn on Hayward's position, describing it as "a decision for BP's board". But the Obama administration has attracted criticism in conservative circles for being too overtly aggressive towards BP's management. Ben Ferguson, a right-wing radio host, said he found it "scary" that BP was severing ties with a chief executive partly because of political pressure: "The government should not be involved in any aspect of this settlement and they obviously are."

Hayward's apparent successor, Bob Dudley, has been praised as "calm, cool and collected" by Kenneth Feinberg, the influential claims administrator appointed by the White House to arbitrate on compensation disputes arising from the oil spill.

Among people struggling for their livelihoods on the front line of the environmental disaster, the departure of Hayward prompted shrugs. Chris Foss, a boat captain from Port Sulphur, told the Associated Press that it didn't matter much: "Whatever happens with the corporate dudes is irrelevant. The only thing that matters is what they are going to do about this mess."

New BP chief: Priority is plugging well for good

NEW ORLEANS – The newly named CEO of BP says his top priority is sealing its blown oil well for good and cleaning and restoring the Gulf of Mexico.

Reuters – BP Plc (British Petroleum) Executive Vice
President for the Americas and Asia Robert Dudley speaks at …

Bob Dudley said on ABC's "Good Morning America" on Tuesday he does not expect any more oil to gush into the Gulf as BP PLC moves to permanently plug the well with cement after capping it nearly two weeks ago.

Dudley is taking over Oct. 1 from Tony Hayward, who was forced to go by public and political anger in the United States over the spill.

Dudley, who grew up partly on the Gulf, will be the first American to lead London-based BP.

He told ABC he plans to change the company culture and make sure checks and balances are in place to prevent a repeat of the disaster. It started with an April 20 explosion that destroyed the leased oil rig Deepwater Horizon, killing 11 workers.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.

LONDON (AP) — BP's embattled Chief Executive Officer Tony Hayward will be replaced by American Robert Dudley on Oct. 1, the company said Tuesday, as it reported a record quarterly loss and set aside $32.2 billion to cover the costs of the devastating Gulf of Mexico oil spill.

BP said the decision to replace Hayward, 53, with the company's first ever non-British CEO was made by mutual agreement. In a mark of faith in its outgoing leader, BP said it planned to recommend him for a non-executive board position at its Russian joint venture and will pay him 1.045 million pounds ($1.6 million), a year's salary, in lieu of notice.

"The BP board is deeply saddened to lose a CEO whose success over some three years in driving the performance of the company was so widely and deservedly admired," BP Chairman Carl-Henric Svanberg said in a statement accompanying the quarterly earnings update.

Svanberg said the April 20 explosion of the Macondo well on the Deepwater Horizon platform run by BP in the Gulf of Mexico has been a "watershed incident" for the company.

Click image to see photos of oil spill aftermath

"BP remains a strong business with fine assets, excellent people and a vital role to play in meeting the world's energy needs," he said. "But it will be a different company going forward, requiring fresh leadership supported by robust governance and a very engaged board."

Besides permanently plugging the oil leak and cleaning up the spill and the company's image, Dudley will oversee the sale of $30 billion in assets over the next 18 months to bolster the company's finances.

Hayward, who has a Ph.D in geology, had been a well-regarded chief executive. But his promise when he took the job in 2007 to focus "like a laser" on safety came back to haunt him after the explosion on the Deepwater Horizon rig killed 11 workers and unleashed a deep-sea gusher of oil.

He became the lightning rod for anti-BP feeling in the United States and didn't help matters with a series of gaffes, raising hackles by saying "I want my life back," going sailing, and what was viewed as an evasive performance before U.S. congressmen in June.

In a statement on Tuesday, Hayward said it was right that BP embark on its next phase under new leadership.

"The Gulf of Mexico explosion was a terrible tragedy for which — as the man in charge of BP when it happened — I will always feel a deep responsibility, regardless of where blame is ultimately found to lie," he said.

On top of the payout, Hayward retains his rights to shares under a long-term performance program which could eventually be worth several million pounds if BP's share price recovers. The stock has lost around 35 percent, or $60 billion, in market value to around $116 billion since the well explosion. It was marginally higher on Tuesday, up 0.4 percent at 418.7 pence in midmorning trade on the London Stock Exchange.

Hayward, who will remain on the board until Nov. 30, will also be entitled to draw an annual pension of 600,000 pounds from a pension pot valued at around 11 million pounds.

Svanberg described Dudley, 54, who was thrown out of Russia after a battle with shareholders in the company's TNK-BP joint venture, as a "robust operator in the toughest circumstances."

Currently BP's managing director, Dudley grew up partly in Hattiesburg, Mississippi, and has so far avoided any public missteps. He spent 20 years at Amoco Corp., which merged with BP in 1998, and lost out to Hayward on the CEO slot three years ago.

Dudley will be based in London when he takes up his appointment and will hand over his present duties in the United States to Lamar McKay, the chairman and president of BP America.

BP said the $32.2 billion charge for the cost of the spill led it to record a loss of $17 billion for the second quarter, compared with a profit of $4.39 billion a year earlier. It is the first time in 18 years that the company has been in the red. The charge includes the $20 billion compensation fund the company set up following pressure from President Barack Obama as well as costs to date of $2.9 billion.

But the company also stressed its strong underlying financial position — revenue for the quarter was up 34 percent at $75.8 billion — and Hayward said it had reached a "significant milestone" with the capping of the leaking well.

Crews were restarting work to plug the leaky Gulf well after the remnants of Tropical Storm Bonnie blew through, forcing a short evacuation. The U.S. government's oil spill chief, Retired Coast Guard Adm. Thad Allen, said Monday that the so-called static kill — in which mud and cement are blasted in from the top of the well — should start Aug. 2.

If all goes well, the final stage — in which mud and cement are blasted in from deep underground — should begin Aug. 7.

BP said the bottom kill could take days or weeks, depending on how well the static kill works, meaning it will be mid-August before the well is plugged for good.

Hayward said the company expects to pay the "substantial majority" of the remaining direct spill response costs by the end of the year.

"Other costs are likely to be spread over a number of years, including any fines and penalties, longer-term remediation, compensation and litigation costs," Hayward said.

BP said the sale of $30 billion in assets will come primarily from its $250 billion Exploration and Production portfolio and assets will be selected "on the basis that they are worth more to other companies than to BP." The company has already made a start with the $7 billion sale of gas assets in the United States, Canada and Egypt to Apache Corp.

In London, Greenpeace protestors closed more than 50 service stations in a protest timed to coincide with the company's earnings update. The environmental action group is calling on Dudley to focus the company on greener and renewable sources of energy.

Richard Hunter, head of U.K. Equities at Hargreaves Lansdown Stockbrokers, said that significant challenges remain for the company but it is "moving aggressively to position itself for the tough times ahead."

"The triple pronged approach of increased provisions, asset sales and a new CEO should be a potent mix in forming a strong future foundation," Hunter said. "Behind the obvious headlines, the underlying trading performance was robust with a significant improvement having been made on a like for like basis."

The company reported that underlying replacement cost profit — the measure most closely watched by analysts — was $5 billion for the three months between April and June when adjusted for one-off items and accounting effects. That compared favorably with a $2.9 billion profit for the second quarter of 2009.

"Outside the Gulf it is very encouraging that BP's global business has delivered another strong underlying performance, which means that the company is in robust shape to meet its responsibilities in dealing with the human tragedy and oil spill in the Gulf of Mexico," Hayward said.

Higher prices for oil and gas made up for slightly lower output and a loss in gas marketing and trading in Exploration & Production, while Refining & Marketing reported increased profits as a result of strong performance in the fuels value chains and the lubricants and petrochemicals businesses.

The company said it planned to reduce net debt to a range between $10 billion and $15 billion within the next 18 months, compared to net debt of $23 billion at the end of June, to ensure that it had the flexibility to meet its future financial obligations.

Capital spending for 2010 and 2011 will be about $18 billion a year, in line with previous forecasts.