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Archive for Monday, June 21, 2010

BP changes gears on spill oversight

June 21, 2010

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— BP’s new strategy to clean up its image and the Gulf Coast is to hand the job from its British CEO, widely criticized for tone-deaf comments and yachting amid the crisis, to one of its top-ranking Americans.

BP Chief Executive Officer Tony Hayward, left, and BP Managing Director Bob Dudley, right, arrive with other BP executives at the White House in Washington in this June 16 file photo.

BP Chief Executive Officer Tony Hayward, left, and BP Managing Director Bob Dudley, right, arrive with other BP executives at the White House in Washington in this June 16 file photo.

Bob Dudley is no stranger to tough situations, having protected his company’s interests in rough dealing in Russia even after he was barred from the country. Perhaps most important, he is a fresh face for the oil giant as it attempts to fix the spill and protect its future.

Dudley will take over as BP’s point man on the spill response, reporting to CEO Tony Hayward. Company officials have variously put the time frame at anywhere from immediately until after the spill is plugged, which isn’t likely to happen until August.

Hayward’s gaffes include saying, “I’d like my life back,” and most recently enjoying a yacht race off the coast of England on Saturday while oil spill relief workers sweated it out. BP officials, however, say the switch is intended to allow Hayward to focus on running the company, rather than an attempt to bounce back from bad publicity.

Dudley, BP’s managing director, spent part of his boyhood in Hattiesburg, Miss., an easy drive from the coast. The 54-year-old spent two decades climbing the ranks at Amoco Corp., which merged with BP, and lost out to Hayward on the CEO’s slot three years ago.

Analysts say Dudley’s job will involve nothing short of rehabilitating the environment, compensating everyone who has suffered a loss and generally salvaging BP’s global image.

Dudley has plenty of experience protecting BP’s interests under great pressure. As chief of TNK-BP, a joint venture with a consortium of Russian billionaires, he steered the firm through a series of politically explosive disputes that saw one employee charged with espionage, the company’s offices raided by Russian intelligence, an investor boycott and a barrage of tax and labor investigations.

In the teeth of a Russian effort to remove him from office, Dudley clung on until 2008, at one point running the company from abroad after Russian authorities barred him from the country. Despite fears that BP’s partners would expropriate the British company’s share of the venture, BP has managed to keep its cut of TNK-BP’s multibillion-dollar profits.

Managing Siberian energy fields and containing the 65 million- to 125 million-gallon Gulf slick aren’t quite comparable, though the situations do have parallels, said Amy Myers Jaffe, an energy studies fellow at Rice University’s public policy institute. Both involve a “complex situation involving multiple parties that might sue each other and multiple levels of government.”

“I do think he did a good job in Russia, under the circumstances,” she said.

Dudley also has shown a steady hand in his limited public appearances since the April 20 oil rig explosion that killed 11 workers and triggered the Gulf spill. He was the one tapped to make the rounds of the Sunday morning shows at the end of May when BP’s latest bid to stanch the flow fell short.

“We failed to wrestle this beast to the ground,” he said matter-of-factly.

A week later, he struck a conciliatory note as he toured the Louisiana coast with Gov. Bobby Jindal, saying he was frustrated and saddened by what he saw. He was there to promise that BP would fund state efforts to build sand berms to protect barrier islands from the oil.

“We understand the importance of this,” he said. “We are deeply sorry.”

BP did not respond to a request from the Associated Press for an interview with Dudley.

Industry insiders such as former Shell Oil President John Hofmeister have argued that BP from the start should have made an American the public face of its spill recovery efforts.

“I’ve been saying for weeks that Tony Hayward ought to pass this over to his top American executive,” Hofmeister said Sunday. “He has completely competent people in the U.S. that can represent him in every instance.”

Hofmeister said Dudley has been involved in the Gulf oil spill recovery effort from the start, and he expects no changes in BP’s approach once he takes over.

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