BP CEO Tony Hayward nears exit as spill work resumes
BP has decided CEO Tony Hayward should step down over his handling of the Gulf of Mexico oil spill.
London: BP Plc has decided Chief Executive Tony Hayward should step down over his handling of the Gulf of Mexico oil spill and his departure could be announced in the coming days, sources close to the company said on Sunday.
The Wall Street Journal, citing people familiar with the matter, reported that if BP`s board approves Hayward`s departure as expected, managing director Bob Dudley would be named to replace him as CEO.
As the boardroom drama intensified, clearing weather in the spill zone allowed work to resume on drilling a relief well to plug the leak that has been spewing oil into the Gulf for some three months.
A Transocean Ltd. rig was reconnecting equipment, a BP spokeswoman said. Other vessels that had left the region late Friday to get out of the path of what was Tropical Storm Bonnie were also returning.
BP`s board will discuss the timing of Hayward`s exit when it meets on Monday to review BP`s second-quarter results ahead of their release on Tuesday, the sources said.
"The details are being worked out," one source said.
The London-based company could announce on Tuesday that Hayward will stand down in the months ahead, after a handover period, the sources said.
However, the company is also mulling whether to hold off on announcing Hayward`s departure until the Macondo well, which has been sealed with a temporary cap after leaking up to 60,000 barrels per day into the sea, has been shut off for good.
A BBC news report said Hayward has been negotiating the terms of his exit and a formal announcement was likely within the next 24 hours. The Wall Street Journal said the decision to move toward Hayward`s departure was "mutual."
BP, which has lost 40 percent of its market capitalization since the blast that prompted the spill, would not comment on the reports and said Hayward remained the CEO, with the full support of the board and management.
But a BP spokesman declined to repeat the company`s statements from last week that the board was not even discussing Hayward`s future.
Hayward has become a lightning rod for public anger in the United States due to the spill and public relations gaffes such as saying on television that he wanted his life back and later going sailing in the middle of the disaster.
Investors fear Hayward`s continued presence at the company will make it harder for BP to rebuild its reputation in the United States, where 40 percent of its assets are based.
A relief well, which should permanently plug the well, is expected to be completed in the coming weeks. BP will finish placing the last bit of pipe sometime in the next week, the top U.S. official overseeing the spill response said.
As remnants of Bonnie dissipated over the Gulf on Saturday, retired Coast Guard Admiral Thad Allen, head of the US spill response, said a "static kill" operation to plug the well by pumping in heavy drilling mud and possibly cement could start in three to five days.
"The static kill could go very quickly," Allen said.
Although vessels were returning to the site on Sunday, Allen said the storm could push back BP`s mid-August target date for completing it by seven to nine days.
Though toothless in the end, Bonnie had prompted oil and natural gas producers to evacuate many offshore workers, halting more than half of the oil production in U.S.-regulated areas of the Gulf and about 25 percent of gas output.
BP sealed the leak July 15 with a tight-fitting containment cap, choking off the flow of oil for the first time since an April 20 rig explosion killed 11 workers and sent crude spewing into the Gulf, soiling coastlines in five U.S. states and devastating tourism and fishery industries.
As the bad weather passed, the independent administrator running a $20 billion fund set up by BP to compensate people for financial losses from the spill said the energy giant was holding up payments to economic victims.
"I have a concern that BP is stalling claims. ... I doubt they are stalling for money. It`s not that. I just don`t think they know the answers to the questions" from claimants, Kenneth Feinberg told reporters on Saturday in Alabama.
Thousands of businesses in Gulf Coast states have been crippled by the spill, the worst in U.S. history. BP agreed to set up the $20 billion fund under pressure from President Barack Obama.
At a town hall meeting in southern Alabama, fishermen and other business owners told Feinberg of their frustration and anger at what they said was a slow and complex claims process that lacks transparency.
"After today there will be no more business as usual. I learned today the depth of frustration in people here on the coast," Feinberg told the meeting.