BP chief Hayward forced out over Gulf oil disaster

27th July 2010, Comments 0 comments

BP's vilified chief executive Tony Hayward resigned on Tuesday as the energy giant announced that the devastating Gulf of Mexico oil disaster will cost 32.2 billion dollars and caused a record quarterly loss.

Hayward, whose PR gaffes handling the oil spill made him a target of US fury, will be succeeded by American executive Bob Dudley, who is currently in charge of Gulf clean-up operations.

BP said it had made a record 16.9 billion dollar loss in the second quarter and that it will sell 30 billion dollars of assets over the next 18 months as it seeks to streamline operations and return to profitability.

It was pushed into the red by the 32.2 billion dollars (24.7 billion euros) set aside to pay for the disaster costs.

"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.

BP and Hayward in particular have been mauled by the US government 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 US Gulf coast.

"BP today announced that, by mutual agreement with the BP board, Tony Hayward is to step down as group chief executive with effect from October 1," it said, adding he will be nominated as a non-executive director of TNK-BP, a Russian joint venture.

The worst environmental catastrophe in US history has been a public relations disaster for BP.

Its share price has plunged about 40 percent since the explosion. In morning trade, it edged 0.02 percent higher to 417.05 pence.

"From day one, I decided that I would personally lead BP's efforts to stem the leak and contain the damage, a logistical operation unprecedented in scale and cost," Hayward said.

"We have now capped the oil flow and we are doing everything within our power to clean up the spill and to make restitution to everyone with legitimate claims.

"I would like to thank all of the BP people involved in the response and the many thousands of others along the Gulf Coast who have joined us in our efforts.

"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."

He added: "I am sorry that achievement has been overshadowed by the tragedy in the Gulf of Mexico."

Under his contract, Hayward will receive one year's salary, worth 1.045 million pounds (1.245 million euros, 1.620 million dollars). He also has a pension pot totalling 11 million pounds.

BP added that Dudley will move to London and hand over his present duties to Lamar McKay, chairman and president of BP America.

"In this change of roles, I particularly want the people of the Gulf Coast to know that my commitment to remediation and restitution in the region is not lessened," Dudley said.

"I gave a promise to make it right and I will keep that promise," he vowed, adding that he would aim to place BP back "on the road to recovery".

BP said it would announce its 30 billion dollar asset selloff plans later. It said they would be "primarily in the upstream business, and selected on the basis that they are worth more to other companies than to BP.

"This portfolio high grading will leave the company with a smaller but higher quality exploration and production business."

It has taken more than three months to stem the Gulf of Mexico oil flow. Up to four million barrels (170 million gallons) of crude has escaped into the sea.

The catastrophe has destroyed vital tourism, fishing and oil industries in the five US Gulf coast states and left BP facing clean-up and compensation costs running into tens of billions of dollars.

Hayward, 53, had already handed over day-to-day management of the crisis in June to Dudley, as criticism mounted.

His long line of gaffes stretches back to the weeks after the BP-leased Deepwater Horizon exploration rig exploded and sank.

He enraged residents of the stricken US Gulf states when he said in a May 18 interview: "I think the environmental impact of this disaster is likely to be very, very modest."

Then on May 30 he was seen as particularly 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".

BP finally stopped oil gushing into the Gulf on July 15.

© 2010 AFP

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