Connect with us

Hi, what are you looking for?


BP Boss Hayward steps down

LONDON, July 27 – 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 dollars after causing a record quarterly loss.

Hayward, whose PR gaffes made him a target of US fury, will be succeeded by Bob Dudley, who is currently in charge of BP\’s Gulf clean-up operations and vowed to "change the culture" of how the company tackles safety issues.

BP made a record 16.9-billion-dollar loss in the second quarter, and will sell 30 billion dollars 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 dollars (24.7 billion euros) set aside to pay for the costs of the spill — which was the worst environmental disaster in US history.

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 US 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 October 1, and will remain a BP board member until November 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.

Advertisement. Scroll to continue reading.

"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," said Dudley.

He added that his top priority was to permanently seal the Gulf well, contain the crude spill and to clean up and restore the area\’s beaches. The group had 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 the group\’s market value. BP shares rose 0.20 percent to 417.8 pence in Tuesday afternoon trade.

"As expected, BP reported the worst figures in UK 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 years\’ 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.

Hayward added: "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."

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.

Advertisement. Scroll to continue reading.

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.

The catastrophe has destroyed vital tourism, fishing and oil industries in the five US Gulf coast states and left BP facing soaring clean-up 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.

Advertisement. Scroll to continue reading.
Click to comment

More on Capital Business

Executive Lifestyle

NAIROBI, Kenya, Mar 12 – The country’s super wealthy individuals are increasing their holding of bonds, gold and cash, a new report by Knight...

Ask Kirubi

NAIROBI, Kenya, Mar 9 – Businessman and industrialist Dr. Chris Kirubi has urged members of the public to exercise extreme caution when making any...

Ask Kirubi

NAIROBI, Kenya, Mar 24 – Businessman and industrialist Dr. Chris Kirubi is set to own half of Centum Investment Company PLC, following a go-ahead...

Ask Kirubi

It is without a doubt that the COVID-19 pandemic has caught the whole world by surprise. Although its full impact is yet to be...


NAIROBI, Kenya, Mar 18 – Commercial Banks have been ordered to provide relief to borrowers on their personal loans, with loans eligible from March...


NAIROBI, Kenya, Jun17 – Kenya’s tea leaves manufacturer Kericho Gold, has been awarded the Superbrands Seal by Superbrands East Africa for their quality variety...


NAIROBI, Kenya, Apr 13 – As the local telecommunications industry gears up to roll out 5G networks in the country, the Communications Authority of...


NAIROBI, Kenya, Mar 22 – Airtel Kenya is offering free internet access for students in order to enable continued learning at home in the...