Hayward makes way for new CEO; BP loss at $17 bn

Written by Reuters | London | Updated: Jul 29 2010, 04:15am hrs
BP Plc named American Bob Dudley as its next CEO on Tuesday, saying Tony Hayward would stand down after his gaffe-prone handling of the worst oil spill in the US history that triggered a $17-billion loss in second quarter.

Dudley, the US executive managing BPs response to the spill in the Gulf of Mexico, will get the top job on October 1, a move that could soften US criticism of the British oil major. I believe that it is not possible for the company to move on in the US 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 said it planned to sell assets worth up to $30 billion over the next 18 months and would cut its net debt to between $10 billion and $15 billion in that period.

The company said it would consider its position on future dividend payments at the time of its fourth-quarter results.

Analysts had expected BP to set aside tens of billions of dollars to cover the cost of the April 20 oil rig explosion that killed 11 people, ruined the Gulfs fishing and tourism industries, and polluted the Gulf shoreline with slimy goo.

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. However, Dudley denied BPs culture, which investors and analysts say encourages greater risk taking than some rivals, contributed to the disaster in the Gulf of Mexico.

Excluding a $32.2 billion charge for the oil spill and other non-operating costs, the replacement cost profit was $4.98 billion, in line with the average forecast from a Reuters poll of 11 analysts and up 77%on the same period of 2009.

Replacement cost profit strips out gains or losses related to changes in the value of fuel inventories and as such is comparable with net income under US accounting rules. BP shares, which lost more than $100 billion in value at the height of the crisis, eased 0.2% in early London trading.

Its basically a kitchen sink job and weve got the way forward, said Panmure analyst Peter Hitchens.

Theyve taken all the charges at once and were seeing the first way forward how theyre going to deal with the balance sheet which is the key thing ... I think its the board trying to wipe the slate clean.

BP could begin the final procedure to kill its leaking well late next week, the top U.S. spill response official said. That will involve pumping mud and cement through a relief well that has been drilled since May 2 to a spot close to the bottom of the damaged well.

The next thing that we need to do is get this well in the position where we can make the intercept and kill this well from the bottom, retired Coast Guard Admiral Thad Allen told reporters in Washington.

More than five million barrels of oil have spilled into the Gulf of Mexico since the undersea leak began, according to US government estimates. Some Gulf Coast residents, seething about damage from the spill and BPs compensation process, said they would be happy to see Hayward go.

Tony Hayward to be offered role at TNK-BPM

BP chief executive Tony Hayward is to be nominated for a board position at its Russian ventureTNK-BP when he steps down from his current role, Sky News reported, citing sources. TNK-BP declined to comment on the Sky News report when contacted by Reuters.