Gulf oil spill cleanup: BP’s Hayward out, Dudley in

Despite acknowledging responsibility for the Gulf oil spill and trying to show confidence, BP CEO Tony Hayward appeared to be an executive who could not effectively communicate empathy.

By MARK GUARINO | Christian Science Monitor
posted June 18, 2010 at 7:21 pm EDT

Chicago — With BP chief executive Tony Hayward stepping down from his role directing recovery efforts in the Gulf oil spill, questions are being raised regarding the approach and tone the company will adopt in continuing those operations.

Mr. Hayward is to be replaced by BP managing director Bob Dudley, whose arrival is at least two months ahead of schedule. The company reported in early June that Mr. Dudley would eventually take over operations once the oil leak ended. BP chairman Carl-Henric Svanberg made the announcement Friday to Sky News television in London.

Despite continued attempts to mitigate the leak, BP is drilling two separate relief wells it says will finalize the job. Those wells are expected to be completed by late August.

Ever since oil started escaping from the underground well eight weeks ago, Hayward has suffered as BP’s public face. Despite acknowledging responsibility for the disaster and trying to show confidence in a storm of uncertainty, he continued to project the image of an executive who could not effectively communicate empathy.

During congressional testimony Thursday, Hayward was criticized for insisting it was “too early” to say the company had cut corners on safety.

“If there’s any evidence that anybody put costs above safety, I will take action,” he said, according to Reuters.

“I can’t believe you said that,” retorted Rep. Henry Waxman (D) of California, chairman of the House Energy and Commerce Committee. “Of course there’s evidence.”

Hayward’s inexperience in the public spotlight probably became a source of fatigue, the evidence of which surfaced last month when The Times of London quoted him saying, “I want my life back.”

Mr. Svanberg defended Hayward, saying, “Here is also a man who has [been through] 100 hours of TV time and maybe 500 interviews,” adding that Hayward’s congressional appearance was “a very, very difficult hearing to go through.”

According to a nine-year veteran of BP who worked in the company’s US headquarters until recently but asked that his name not be used due to a company policy that he not speak publicly, Hayward was “shrouded in mystery” and did not play a visible role in US operations.

“He definitely was a bit more removed from things going on here in the US and not really in tune with the way things were run here,” this source says. “You always got that sense.”

The source adds that he was not surprised to hear Hayward’s complaint about wanting his life back, saying it reflected “so many layers of insulation” that separated BP’s top executives from operations on the ground.

“I don’t want to call it arrogance, but that might be the right term,” he says.

BP’s decision to replace Hayward following the company’s agreement Wednesday to set up a $20 billion escrow account for recovery claims suggests it is seeking to reverse its Wall Street ranking. BP’s US-listed shares have dropped 26 percent so far this month, making it the worst month for the company since October 1987, according to Reuters. The company is seeking $7 billion in bank loans.

Anthony Sabino, an oil and gas industry attorney in New York, says Hayward’s ouster was “an important first step in renewing confidence in BP as an entity” and will help the company jump-start its stock value.

“BP has to be saved. This is different from a bailout. You need to give BP some room because if they’re not around to clean up the mess, then who the heck will?” says Mr. Sabino. “The bottom line is it’s their mess. Which means you need to allow them to make some money.”

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