Political India: Engaging America

From The Hindu

In a bid to save what is left of its reputation, BP announced that its gaffe-prone British CEO, Tony Hayward would step down and be replaced by an American chemical engineer and head of mop-up operations in the Gulf of Mexico, Robert Dudley.

The company, which has not only come under scathing attacks for its role in the oil spill but also courted controversy relating to the release of convicted Libyan terrorist Abdel Baset al-Megrahi, said Mr. Hayward would stop functioning as group chief executive with effect from October 1, 2010.

Seeking to project the change in the leadership as a break from its past, BP chairman Carl-Henric Svanberg said, "The tragedy of the Macondo well explosion and subsequent environmental damage has been a watershed incident. BP... will be a different company going forward, requiring fresh leadership supported by robust governance and a very engaged board."

The announcement came even as BP admitted that it had made a record "replacement cost" loss during the second quarter of the year, amounting to a staggering $17 billion. The company said it was facing a charge of $32.2 billion, "to reflect the impact of the Gulf of Mexico oil spill, including costs to date of $2.9 billion for the response and a charge of $29.3 billion for future costs, including the funding of the $20 billion escrow fund".

Remarking on the financial results, Mr. Hayward said, "We expect we will pay the substantial majority of the remaining direct spill response costs by the end of the year. Other costs are likely to be spread over a number of years, including any fines and penalties, longer-term remediation, compensation and litigation costs."

On stepping into the shoes of Mr. Hayward, Mr. Dudley said that in the change of roles, he particularly wanted the people of the Gulf Coast to know that his commitment to remediation and restitution in the region was not lessened. "I gave a promise to make it right and I will keep that promise," he said.

In a comment that reflected the management’s commitment to those affected by the spill but equally to BP shareholders, Mr. Svanberg said, "We remain confident in our ability to meet our obligations to those on the Gulf Coast of the United States, other impacted parties and all our stakeholders... As we said last month, the Board remains strongly committed to the payment of future dividends and delivering long term value to shareholders."

Labels: BP, BP oil spill, Robert Dudley, Tony Hayward