BP replaces CEO Hayward as point man for oil spill response
Embattled BP Chief Executive Tony Hayward, who endured a ferocious daylong grilling this week on Capitol Hill, was replaced Friday as the point man for the day-to-day response to the gulf oil disaster, a move that drew praise from BP critics and suggested the company was growing increasingly concerned with damage to its image.
BP’s chairman, Carl-Henric Svanberg, told Sky News television in Britain that Hayward was handing over daily operations to managing director Robert Dudley, a Mississippi native who started his career at Chicago-based Amoco Corp., which BP bought in 1998. Dudley has handled sensitive international assignments for BP in Russia and Africa.
Hayward, a soft-spoken British geologist, has been a lightning rod for criticism of BP since the April 20 Deepwater Horizon rig explosion in the Gulf of Mexico. Under questioning in Washington on Thursday, members of Congress accused him of “stonewalling” and “insulting our intelligence.”
Hayward also has been pilloried for several rhetorical missteps that critics interpreted as signs of callousness and detachment. His comment last month that “I’d like my life back” — an inartful attempt to underscore his desire to move quickly to cap the well — sparked a firestorm from those who said it showed BP’s disregard for the suffering of people in the gulf region.
“It is clear Tony has made remarks that have upset people,” Svanberg told Sky News on Friday, explaining the decision.
Earlier this month, BP had announced that, after the spewing well was capped, Dudley would take over management of the long-term response and sought Friday to downplay the move. Hayward retains his position as CEO, and Dudley will report to him.
But Svanberg’s decision to relieve Hayward of those duties on the heels of the CEO’s congressional testimony, analysts said, reflected BP concern that Hayward was no longer effective in the role of primary spokesman. At the hearing, Hayward angered lawmakers by stressing that he wasn’t involved in key decisions before the deadly explosion of the rig and refused to comment on possible causes of the accident.
“Unfortunately in most cases, he did not have good answers — or give any answers,” said Fadel Gheit, an analyst at Oppenheimer & Co. in New York. “He obviously was unprepared and ill-equipped to go through this inquisition.”
Svanberg said he will assume a more public role. But he also suffered a verbal gaffe this week by saying BP cares about the “small people” hurt by the crisis. BP had to backpedal, attributing the remark to a cultural misunderstanding.
The decision to replace Hayward was welcomed by many lawmakers still seething from the CEO’s testimony.
“I have absolutely no confidence that Hayward can respond to this crisis,” said Rep. Cliff Stearns (R-Fla.), among Hayward’s critics. “I hope that Mr. Dudley will be more forthcoming in explaining how BP plans to cap the oil well and address the huge and severe environmental and economic damage in the gulf region.”
Rep. Charlie Melancon (D-La.) said BP should fire Hayward, arguing that “as long as Mr. Hayward remains at the helm of BP, it will be impossible for the people of Louisiana to trust anything the company says.”
Rep. Bart Stupak (D-Mich.), chairman of the House Energy and Commerce Subcommittee on Oversight and Investigations that held the hearing, said he expected Dudley to take a “much more cooperative and open approach to answering our questions and responding to the needs of the gulf region. If not, his tenure will likely be as short-lived as Mr. Hayward’s.”
BP has received the cold shoulder publicly from other oil companies, and on Friday, Anadarko Petroleum Corp., a Texas company that owns 25% of the leaking BP well, said it wasn’t responsible for any of the costs related to the explosion because “mounting evidence clearly demonstrates that this tragedy was preventable and the direct result of BP’s reckless decisions and actions.”
In a statement, Anadarko Chairman and Chief Executive James Hackett said he was “shocked” that information revealed during congressional hearings “indicates BP operated unsafely and failed to monitor and react to several critical warning signs.”
Meanwhile, Kenneth Feinberg, who has been appointed by President Obama to oversee the $20-billion fund BP set aside to pay claims arising from the spill, said in an interview Friday that he gave BP “a lot of credit” for trying to make timely payments, but acknowledged the oil company’s efforts were falling short.
“It is clear that they’re not processing the claims fast enough. There isn’t enough transparency in providing claimants with information about when they can expect their check,” he said. “We’ve got to come up with a much more transparent system.”
Feinberg said he will rely on state law in determining the validity of claims, adding that he would probably consider, among other claims, those made by out-of-work fishermen for health premiums and other expenses they are currently not able to pay.
In the gulf Friday, Coast Guard Adm. Thad Allen said BP now estimates that the amount of oil it is collecting from two containment systems on the broken well has increased to 25,000 barrels a day. The current collection rate is about a 25% increase from efforts earlier in the week.
By the end of the month, Allen said, it could reach as high as 53,000 barrels a day.
At that time, BP will face a decision on whether to replace the existing system with one capable of harnessing even more oil and better able to weather a hurricane.
Tentative plans call for replacing the broken bit of pipe, or riser, now sticking above the well with a more robust and flexible production system.
BP earlier sheared that same broken pipe and installed the existing temporary containment system over it. The next step would require removing the pipe entirely from its base and bolting a new cap over the hole. The cap would attach to a flexible tube and to two floating risers suspended from buoys. Oil could then be funneled by two routes to storage and production facilities at the water’s surface.
The switch might be risky, Allen acknowledged. The existing containment system is the only one that has worked. But the new system would allow BP to collect more oil and also make it easier for boats to unhitch quickly during a storm, Allen said.
Whether BP decides to replace the existing collection system depends on several factors, including how much oil is really leaking.
Allen said new scientific estimates of the leak are as high as 60,000 barrels of oil a day, but that Coast Guard experts believe the actual number is probably lower — maybe 35,000 barrels. But he added that even if the existing containment system is able to capture all the leaking oil, the hurricane-safety advantage of a new cap might outweigh the risks.
To meet cleanup demands, Allen said workers have begun to construct new skimmer boats in Port Fourchon, La. Coast Guard officials are also reviewing U.S. Navy resources and scouring the rest of the country in an effort to bring more boats and skimming equipment to the region, he said.
Dudley, the new BP point person for the spill, is the head of BP’s Gulf Coast operations and has won guarded praise for his public remarks thus far in the crisis. In numerous television appearances, he has defended BP’s strategy in dealing with the spill.
One of the few Americans in the top ranks of BP, he grew up in Hattiesburg, Miss., about 80 miles north of the Gulf Coast, and spent summers in Gulfport and other coastal communities. At BP, he was handed several tough assignments, including head of BP’s TNK-BP unit in Russia during a tense standoff between the company and its Russian partners.
Dudley and Louisiana Gov. Bobby Jindal recently walked together on an oil-covered beach. “What I saw was painful and emotional and shocking,” Dudley said.
Times staff writer Jill Leovy in Los Angeles and Richard Simon and Kathleen Hennessey in the Washington bureau contributed to this report.
