The beleaguered energy giant BP unexpectedly named a successor on Friday for its chief executive, John Browne and said Browne would step down more than a year earlier than expected.
BP, the world's third-largest oil and gas producer after Exxon Mobil and Royal Dutch Shell, has been reeling from the fallout of a series of accidents and mishaps. In one particularly damning recent revelation, a US safety panel found in late October that BP knew about problems at its Texas refinery before 15 people were killed in an explosion in 2005, but did not fix them.
Tony Hayward, BP's head of exploration and production, will take Browne's place when he retires in July. Browne had been expected to stay until the end of next year, when he turns 60, BP's mandatory retirement age.
Analysts and investors said that market pressure drove him out early. Since the beginning of August, BP has lost nearly ?20 billion (US$39 billion) in market capitalization as its stock plunged.
In addition to the Texas explosion, the company has been criticized for a leak, caused by corrosion, that shut its Alaska pipeline last year and US regulators threatened last month to press civil charges against BP after an investigation into allegations of manipulation of the gasoline futures market.
BP is also more exposed than its rivals to Russia, through a joint venture, at a time when that country is taking back control of its natural resources. Market opinion reached a new low last week after the company said on Tuesday that production in the fourth quarter of last year was down 5 percent, worse than market expectations.
"There has been a lot of disappointment" for investors, said Mark Lovett, head of British and European equities for RCM, a division of Allianz Global Investors. The most powerful way to gauge the market impact of the company's problems is to "put Exxon's chart against BP," he said.
"Both companies have the same production issues," he said, "but Exxon has hugely outperformed BP."
BP's stock shot up on the New York Stock Exchange after the announcement was made and was up 4.95 percent, or US$3.05, for the day, closing at US$64.64.
Browne was widely credited with transforming BP into a global energy colossus through a string of deals and paying heed to the environment long before any of his oil and gas peers.
He is "the greatest British businessman of his generation," Peter Sutherland, BP's chairman, said in a statement. "His vision, intellect, leadership and skill will be difficult to follow."
During Browne's tenure, BP's profits and market capitalization grew fivefold and its share price increased 250 percent.
Many analysts and investors view the company's recent problems as an unfortunate end to what was a stellar career, but the series of problems have also raised questions about how well Browne was actually managing the company that he built.
Browne's successor, a BP veteran, was widely praised on Friday.
"He's one of the brightest sparks at BP," said Fadel Gheit, Oppenheimer's oil and gas analyst in New York, who said he had recently spent time with Hayward at BP's operations near the Caspian Sea. "He's extremely smart and very diplomatic," Gheit said.
He added that Hayward was "going to be a breath of fresh air, after the unfortunate incidents over the past few years."
Hayward has been with BP since 1982 and was the group's global treasurer before becoming chief executive of exploration and production. He was not available to comment on the move.
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