As expected, BP has named Bob Dudley, currently the head of its clean-up efforts in the Gulf of Mexico, to be its new CEO, replacing Tony Hayward, effective Oct. 1.
In a statement, BP chairman Carl-Henric Svanberg said "the tragedy of the Macondo well explosion and subsequent environmental damage has been a watershed incident."
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.
We are highly fortunate to have a successor of the calibre of Bob Dudley who has spent his working life in the oil industry both in the US and overseas and has proved himself a robust operator in the toughest circumstances.
Holly Pattenden, a risk analyst with Business Monitor International, told NPR's Don Gonyea that the change has "already had quite a positive impact on the shares, [which] were up five percent on Monday, on rumors that it was going to happen."
Patience Wheatcroft, a columnist for The Wall Street Journal, is critical of how BP handled the change: "...instead of a well-orchestrated announcement of Mr. Hayward's resignation, allowing him to leave with a degree of dignity and the board to look as if it was in control of the situation, BP's headquarters has proved to be leaky as its Gulf of Mexico oil well," she writes.
The discussion over money should have been brief. Mr. Hayward has been well-rewarded during his time with BP and there can be no quibbling over the accrued pension package that he would take with him. It may be generous but it is his. That, though, is surely where the generosity should stop. Although Mr. Hayward was lauded for his cost-cutting, he leaves with continuing question marks over the safety regime, a slashed value of the business and investors deprived of dividends. His brand has become toxic in the crucial U.S. market.
In an article today, The Journal details Dudley's "daunting to-do list," which includes "overhauling a U.S. operation badly tainted by the Gulf of Mexico oil spill; mending fences with perturbed U.S. government officials; and possibly making further executive changes at the top of his own company."
According to Pattenden, Dudley will have to guide the company through a radical transformation, principally because "there's a cultural problem within BP that safety hasn't been taken seriously enough."
The Washington Post's Steven Mufson and Debbi Wilgoren say that, "in some ways, picking Dudley is like reaching back to the past to move into the future."
He worked for Amoco (Formerly known as Standard Oil Co. of Indiana) for nearly 20 years in the United States, Britain and Russia. When BP bought the company in 1998, Dudley, then Amoco's general manager for strategy, made the leap to BP.
BP also announced its second quarter 2010 results today. Because of the oil spill, the company lost some $17 billion.
The New York Times reports "BP set aside $32.2 billion for costs related to the spill, including $20 billion for an escrow fund announced earlier."
To help cover the costs, the company plans to sell assets worth $30 billion over the next 18 months. The sales would leave BP with a smaller exploration and production operation, it said.
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