Support Marketplace

BP's Hayward likely on the way out

Bob Dudley, the Executive Director of BP, arrives at their headquarters in London -- July 26, 2010

MORE: Dudley solid to replace Hayward, but not scandal-free

TEXT OF INTERVIEW

Bill Radke: BP's chief executive Tony Hayward has gotten some negative grades for his handling of the oil spill in the Gulf. Today, there are reports that BP's board is meeting to discuss his fate. And for more now, we turn to Marketplace's guy in London, Stephen Beard. He joins us live. Hi Stephen.

Stephen Beard: Hello, Bill.

Radke: Is Hayward out?

Beard: It looks like it. I mean BP hasn't confirmed it, but they have not denied the very widespread reports that Hayward is on the way out. It would be extraordinary if he survived, frankly.

Radke: Well it's not like he personally caused the oil spill. Why is Hayward apparently walking the plank?

Beard: Because of his handling of the crisis -- his PR gaffes, his poor performance before Congress. Nick Macgregor, who's an oil analyst with Brokers Redmayne and Bentley, says Hayward's departure has been in the cards for at least a couple of months:

Nick Macgregor: You know, I think it happened on May the 27, when Barack Obama said if he worked for me I'd sack him. Basically at that point, Barack Obama destroyed what little credibility he had left, and made it a matter of time rather than a maybe.

So this move is designed, really, to placate the U.S. I mean the U.S., after all, is one of BP's most important markets. But over and above that, the key point is that Hayward's international credibility has been destroyed by his gaffes in the U.S.

Radke: So who would replace him?

Beard: It looks as if it's going to be an American: Bob Dudley, who's currently in charge of operations in the Gulf. To an extent, it's coincidental that he's an American, although it will help. Analysts say he's probably the best man for the job anyway.

Radke: So I think the question Americans have on their minds, Stephen: What will become of poor Tony Hayward?

Beard: Well he won't be poor, he won't leave the company empty-handed. It's said his pension alone will pay him three-quarters of a million dollars a year, and there will be an additional lump sum to ease the pain of departure.

Radke: Marketplace's Stephen Beard in London. Thank you, Stephen.

Beard: OK, Bill.


TEXT OF STORY

Steve Chiotakis: Now the person who's expected to replace Hayward is Bob Dudley. He's got 30 years' experience in the industry -- he's currently BP's managing director. But he's not entirely free of scandal either. We continue our coverage from London, and the BBC's Rebecca Singer reports.


Rebecca Singer: Bob Dudley's been running BP's day-to-day response to the oil spill since June. He grew up in Mississippi, and the company says he has a "deep appreciation and affinity for the Gulf Coast."

Charlie Parker of the news service Citywire says he would also be a strategic choice for BP:

Charlie Parker: If they want an American business, they want to ever drill again, they ever want again to be treated kindly by Congress, they need a change at the top and they probably need an American.

But Dudley's most high-profile role has been as boss of a joint venture between BP and a group of Russian billionaires. It all ended badly, though, when the partners accused him of favoring BP and his visa wasn't renewed. Sandy Lamb is a small BP shareholder:

Sandy Lamb: I find Bob Dudley a strange choice, given the events that happened when he was in charge of TNK-BP, a joint venture with three Russian oligarchs. They hounded him out of Russia.

Dudley will need all the diplomatic skills he has to repair BP's reputation.

In London, I'm the BBC's Rebecca Singer for Marketplace.

About the author

Stephen Beard is the European bureau chief and provides daily coverage of Europe’s business and economic developments for the entire Marketplace portfolio.

Comments

I agree to American Public Media's Terms and Conditions.
With Generous Support From...