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Archive for Wednesday, July 28, 2010

BP hopes to turn page with new CEO

July 28, 2010

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— Battered BP began reinventing itself in the shadow of the Gulf of Mexico oil spill Tuesday, naming its first American CEO as it reported a record $17 billion quarterly loss. Its outgoing chief miffed the White House anew with his parting comments.

Robert Dudley, who will replace Tony Hayward on Oct. 1, promised changes in light of the environmental disaster. “There’s no question we are going to learn things from this investigation of the incident,” he told reporters by phone from London after the announcement was made.

One certain change is that BP will become smaller. It announced it will sell $30 billion in assets and has set aside $32.2 billion to cover costs from the largest offshore oil spill in U.S. history.

Dudley, BP’s managing director and current point man on oil spill recovery, defended his company’s record and that of the embattled chief executive he will replace.

Hayward, whose verbal miscues intensified the anger Gulf Coast residents already felt, will leave BP with benefits valued at more than $18 million. He told reporters he had been “demonized and vilified” but had no major regrets about his leadership.

“Life isn’t fair,” he said, but he conceded that wasn’t the point. “BP cannot move on in the U.S. with me as its leader.”

The White House was not impressed with Hayward’s comments.

“What’s not fair is what’s happened on the Gulf,” press secretary Robert Gibbs said. “What’s not fair is the actions of some have caused the greatest environmental disaster that our country has ever seen.”

BP PLC announced the move Tuesday with an air of making a fresh start, nearly 100 days into a catastrophic mile-deep blowout that killed 11 workers, spewed 94 million to 184 million gallons of oil and sapped 35 percent, or $60 billion, of BP’s market value.

“We are taking a hard look at ourselves, what we do and how we do it,” BP Chairman Carl-Henric Svanberg said during a webcast presentation on the company’s earnings.

Svanberg said the company’s priority was to stop the Gulf leak permanently, clean up the spill and compensate people whose livelihoods have been lost. But he added that the company was determined to restore value to shareholders, whose dividends were axed by BP under U.S. political pressure.

Company shares dropped 65 cents, or about 1.7 percent, to close at $38 in Tuesday trading in New York.

BP said it would become a leaner, higher-quality business through its planned sale of $30 billion in assets. 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.

Svanberg said the planned asset sales did not necessarily reflect a fear that spill costs could soar above the $32.2 billion set aside by the company.

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