New BP boss launches safety crackdown after oil disaster

29th September 2010, Comments 0 comments

New BP chief executive Bob Dudley on Wednesday launched a major shake-up in the wake of the Gulf of Mexico oil spill disaster, creating a powerful safety division and overhauling the group's structure.

Dudley, who officially starts his job in two days, described the drastic restructuring as the "first and most urgent" move for the company, which faces an uphill battle in restoring its reputation after the Gulf catastrophe.

"BP is to create a new safety division with sweeping powers to oversee and audit the company's operations around the world," the firm said in a statement.

Additionally, it will restructure its upstream division into three new separate units -- exploration, development and production.

As a result, the current head of exploration and production, Andy Inglis, will leave BP. Inglis held the post when the Deepwater Horizon rig exploded in April, sparking a huge oil leak and causing BP's share price to collapse.

The embattled group will meanwhile launch a separate assessment of how it motivates its staff in trying to improve safety and risk management, and will also review how it manages third-party contractors.

"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 shares.

Earlier this month, BP defended itself against tens of billions of dollars in potential fines and legal liabilities, saying others also bore responsibility for the disaster.

"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 said.

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

Mark Bly, who led BP's internal probe into the causes of the oil spill disaster, will head the new safety division.

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 broken well was eventually plugged but not before it 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 allegedly made by rig owner Transocean and contractor Halliburton, which cemented the well.

In a separate message to BP workers on Wednesday, Dudley told staff that BP must now change the way it operates.

"This is a deeply challenging time for BP. The Macondo incident was a tragedy that claimed the lives of 11 people, caused injury to many others and had a widespread environmental impact.

"Our response to the incident needs to go beyond deepwater drilling. There are lessons for us relating to the way we operate, the way we organise our company and the way we manage risk."

According to BP, the disaster has so far cost it 9.5 billion dollars (7.3 billion euros) and the bill could ultimately rise to 32.2 billion dollars.

BP's stock market value has fallen by tens of billions of dollars owing to the crash in its share price as a result of the disaster.

© 2010 AFP

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