Bob Dudley is stepping up to take Tony Hayward’s role in managing the Gulf oil spill.Photo courtesy of BP
LONDON — BP’s vilified chief executive Tony Hayward resigned on Tuesday, as the British oil giant said the Gulf of Mexico disaster will cost it $32 billion after causing a record quarterly loss.
Hayward, whose PR gaffes made him a target of U.S. fury, will be succeeded by Bob Dudley, who is in charge of BP’s Gulf cleanup operations and who has vowed to “change the culture” of how the company tackles safety issues.
BP had a record $16.9 billion loss in the second quarter, and will sell $30 billion of assets over the next 18 months as it seeks to return to profitability, it said in a statement.
The troubled firm was pushed into the red by the $32.2 billion set aside to pay for the costs of the spill.
BP and Hayward have been mauled by Washington since the Deepwater Horizon rig exploded on April 20, killing 11 workers and unleashing millions of gallons of crude into the sea and onto the U.S. Gulf coast.
“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,” Hayward said Tuesday.
He will step down on Oct. 1, and will remain a BP board member until Nov. 30, but has meanwhile been nominated as a non-executive director of Russian joint venture TNK-BP.
Dudley will become BP’s first American chief executive following the resignation.
“I think sometimes events like this shake you to the core, the foundation, and you have two responses,” Dudley said in an TV interview with ABC News, in reference to the oil disaster. “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.”
Dudley added that his top priority was to permanently seal the Gulf well, contain the crude spill, and clean up and restore the area’s beaches. The company finally capped the leak on July 15.
BP’s share price has plunged about 40 percent since the explosion, wiping tens of billions of dollars off its market value. BP shares dropped 1.65 percent in afternoon London trading.
“As expected, BP reported the worst figures in U.K. corporate history,” said ETX Capital trader Manoj Ladwa. “Despite the company going through significant management and structural change, the future still remains uncertain for the oil giant and BP in a year’s time could be significantly different from the company today.”
The spill has been a public-relations disaster for BP, with Hayward making a long line of gaffes. On Tuesday, he stood by the company’s handling of the crisis. “I believe the decision I have reached with the board to step down is consistent with the responsibility BP has shown throughout these terrible events,” Hayward said.
Under his contract, Hayward will receive one year’s salary, worth $1.62 million. He also has a pension pot totalling $17.1 million.
BP added that Dudley will move to London and hand over his present duties to Lamar McKay, chairman and president of BP America.
It has taken more than three months to stem the Gulf of Mexico oil flow. Up to four million barrels of crude has escaped.
The catastrophe has destroyed vital tourism, fishing, and oil industries in the five U.S. Gulf coast states and left BP facing soaring cleanup and compensation costs.
“The tragedy of the Macondo well explosion and subsequent environmental damage has been a watershed incident,” said BP Chairman Carl-Henric Svanberg. “BP remains a strong business with fine assets, excellent people, and a vital role to play in meeting the world’s energy needs. But it will be a different company going forward, requiring fresh leadership supported by robust governance and a very engaged board.”
Hayward, 53, had already handed over day-to-day management of the crisis in June to Dudley, as criticism mounted over his handling.
Hayward enraged Gulf residents when he said in a May 18 interview that the environmental impact of the spill would be “very, very modest.” Then on May 30 he was seen as insensitive to the families of the dead rig workers when he said he wanted the disaster over with so he could have his “life back.”
“Hayward, by his own many gaffes, demonstrated that he was the wrong man for the job,” noted BGC Partners analyst Howard Wheeldon.
