Oil giant BP launched a plan to repair its battered image in the US yesterday, ditching its gaffe-prone chief executive and promising to slim down by trebling an asset sale target to US$30 billion.
However, the company, the target of public anger over its Gulf of Mexico oil spill, tempted further ire by denying it needed cultural change and offsetting the costs of the spill, including expected fines, against its taxes.
The tax move will cost the US taxpayer almost US$10 billion.
PHOTO: REUTERS
BP said Tony Hayward would stand down in October, to be replaced by American Bob Dudley, as it unveiled a US$17 billion quarterly loss beause of the costs of the biggest oil spill in US history.
“I believe that it is not possible for the company to move on in the United States with me remaining as the face to BP,” Hayward told reporters on a conference call. “So I think that for the good of BP, and particularly for the good of BP in the United States, it is right for me to ... step down.”
BP chairman Carl-Henric Svanberg said the company would take a “hard look” at itself in the aftermath of the spill.
BP “will be a different company going forward,” he said.
However, Dudley denied BP’s culture contributed to the disaster in the Gulf of Mexico and said the company would continue to target the industry’s harder projects.
Analysts say BP’s culture encourages greater risk-taking than some rivals, contributing to a more entrepreneurism and higher returns, but critics have also blamed this culture for the explosion on the Deepwater Horizon, which killed 11 workers and led to the spill.
“A total change in the culture of this company is necessary,” Democratic Representative Ed Markey, head of the House of Representatives’ Committee on Energy Independence, said on CBS’s The Early Show on Monday.
Svanberg said he had no intention of resigning and that no one on the board had suggested he should, despite some investors claiming he did too little to help defend BP against critics.
BP said it planned to sell assets worth up to US$30 billion over the next 18 months, generating cash to pay for its liabilities and also creating a leaner company with the potential for higher growth.
Hayward will receive one year’s salary or £1.045 million (US$1.61 million) and be appointed a director at BP’s Russian joint venture TNK-BP. He will also keep his pension of about £11 million.
The surprise send-off to Siberia, where BP has a share in the huge Kovykta field, has an added twist because Dudley was the chief executive of TNK-BP before he was forced out of the country by the Kremlin two years ago in a dispute over control of the company.
BP says Hayward rebuilt bridges with the Russian authorities and he could help smooth any tensions with Moscow caused by putting Dudley at the top of the group.
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