BP unveils safety shake-up after oil disaster

29th September 2010, Comments 0 comments

BP will create a powerful safety division in a major shake-up after the Gulf of Mexico oil disaster, the British energy giant said on Wednesday as it prepares for life under new chief executive Bob Dudley.

BP said in a statement that it would also restructure its upstream division into three separate units -- exploration, development and production -- and review how it manages third-party contractors.

And the group will launch a separate assessment of how it motivates its staff, in trying to improve safety and risk management.

"These are the first and most urgent steps in a programme I am putting in place to rebuild trust in BP -- the trust of our customers, of governments, of our employees and of the world at large," Dudley said in the statement.

"That trust is vital to the restoration of shareholder value which has been so adversely affected by recent events.

"The changes are in areas where I believe we most clearly need to act, with safety and risk management our most urgent priority."

This Friday, Dudley replaces under-fire BP boss Tony Hayward, who resigned in July after he was widely criticised over his handling of the oil leak that triggered an environmental catastrophe and battered the group's market value.

Earlier this month, BP sought to spread the blame for the oil spill as it defended itself against tens of billions of dollars in potential fines and legal liabilities.

"The decision to establish the new (safety) function follows the Deepwater Horizon accident in the Gulf of Mexico and BP's investigation into the disaster," the group added on Wednesday.

It continued: "The Safety & Operational Risk function will have authority to intervene in all aspects of BP's technical activities."

The Gulf of Mexico oil disaster was triggered by an explosion on the Deepwater Horizon rig -- leased by BP and operated by Transocean Energy -- that killed 11 workers on April 20.

The accident broke pipelines between the rig and the ocean floor, spewing massive amounts of oil into Gulf waters, exposing the wildlife-rich region's vulnerability to deep sea drilling.

The leak was plugged earlier this month but not before a busted undersea well gushed about 4.9 million barrels of oil into the Gulf, the largest maritime spill in history.

As expected in the findings of its own inquiry, BP did not admit "gross negligence" for the explosion.

The disaster was the result of a "sequence of failures" BP said, as it exonerated its well design and apportioned a large share of the blame to mistakes made by rig owner Transocean and contractor Halliburton, which cemented the well.

According to BP, the disaster has so far cost the British group about 9.5 billion dollars (7.3 billions euros). The company has forecast that the catastrophe will eventually cost it a total of about 32.2 billion dollars.

Additionally, BP's stock market value has fallen by tens of billions of dollars owing to a crash in its share price.

On Tuesday, BP reportedly raised 3.5 billion dollars on the corporate bond market, but added that this was not related to the spill costs.

© 2010 AFP

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