BP replaces CEO Tony Hayward as point man

Published 12:05 am Saturday, June 19, 2010

NEW ORLEANS (AP) — BP’s chairman said Friday that CEO Tony Hayward is on his way out as the company’s point man on the Gulf oil spill crisis, a day after Hayward enraged members of Congress by offering few answers about how the environmental disaster happened. Other BP officials, however, said the switch had been previously announced and will not take place for some time.

BP Chairman Carl-Henric Svanberg told Britain’s Sky News television on Friday that Hayward “is now handing over the operations, the daily operations to (BP Managing Director) Bob Dudley.” BP had said this month that Dudley would take over the long-term response to the spill once the leak was stopped, but millions of gallons continue to spew and that milestone remains months away.

Svanberg’s statement sowed confusion, with other BP officials saying Hayward remains in charge.

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“Until the acute part of this crisis is over, until the leak is capped, Tony Hayward is still very much in charge in the response of this crisis,” BP spokesman Robert Wine said.

Wine said Hayward “will at some point hand over the management of the aftermath,” and that Dudley is putting together a team that will “make sure that the long-term impacts are met with as well as the legal, political repercussions from this crisis.”

There is no date for the handover, Wine said, because “clearly the well is still leaking.”

The chairman’s comments overshadowed some positive news in the cleanup effort. Coast Guard Adm. Thad Allen announced earlier Friday that a newly expanded containment system is capturing or incinerating more than 1 million gallons of oil daily, the first time it has approached its peak capacity.

And the system will soon grow. By late June, the oil giant hopes it can keep nearly 90 percent of the flow from hitting the ocean.

But the massive leak, set off by an oil rig explosion that killed 11 workers nearly two months ago, will not be stopped completely until at least August. BP has been hammered for its response, in part because of comments by Hayward that Gulf Coast residents horrified by the spill consider insensitive.

Hayward shocked residents in slick-hit Louisiana by saying, “I would like my life back.” The Briton was quoted by the Times of London suggesting that Americans were particularly likely to file bogus claims – a statement that gained significance Friday when a House committee said BP has paid less than 12 percent of claims submitted. President Barack Obama has suggested he would fire Hayward if he could.

On Thursday, Hayward told lawmakers on a U.S. House investigations panel that he was out of the loop on decisions surrounding the blown well. Both Democrats and Republicans were infuriated when he asserted, “I’m not stonewalling.”

“It is clear that Tony has made remarks that have upset people,” said Svanberg, who made a misstep of his own this week when he said BP cares “about the small people.” But he added that Hayward “is also a man who has probably been on 100 hours of TV time and maybe 500.”

Dudley, an American-born oil man with more than 30 years in the industry, has been BP’s managing director since 2009. His responsibilities include broad oversight of the company’s activities in the Americas and Asia, and earlier this month he was named head of the company’s disaster management unit.

The company said in a June 4 news release that Dudley would manage the long-term day-to-day operations of the oil spill response “once the spill was over,” and that he would report to Hayward. BP said then that the shift was being planned because it wants Hayward to focus on running the company and Dudley to focus on managing “the reputational impact, the financial obligations and restore trust and confidence of BP in America.”

Svanberg told Sky News that no matter who is heading BP’s oil spill response, “as long as we don’t close the well and take care of this, there will be criticisms about many things.”

Many Gulf Coast residents and business owners who have been economically devastated by the spill are still waiting for compensation from BP. The House Judiciary Committee said data it has collected shows that BP has paid $71 million out of an estimated $600 million in outstanding claims as of Tuesday. It based the figure on data it collected from BP’s daily reports to the Coast Guard on claims and on discussions with BP.

The committee said not one of the 717 claims for bodily injury, or the 175 claims for diminished home property value, have been paid.

“I remain concerned that BP is stiffing too many victims and shortchanging others,” said the committee’s chairman, Michigan Democrat John Conyers.

BP spokesman Scott Dean said in an e-mail that the company had paid out $95 million as of Friday, and it had written about 30,000 checks to settle about half the 63,000 claims it has received.

The chief of the Independent Claims Facility – the newly created office charged with distributing $20 billion in compensation from BP – said a plan to handle the remaining damage claims will be in place in 30 to 45 days. Kenneth Feinberg said he hopes to have a program going forward that would provide payment within 30 to 60 days of someone submitting a new claim.

Those pledges don’t mean much to Jerry Forte, who filed a business claim with BP more than a month ago and hasn’t seen a dime. His seafood processing business on the docks in Pass Christian, Miss., used to bring in more than $1 million a year but now is practically shuttered.

“I’m 99 percent down. They took all the shrimp boats. I don’t have anybody shrimping,” Forte said Friday. “My bank accounts are all going down to nothing because we’re spending it all on bills, just waiting on BP.”

The slow claims process is just one of many criticisms lawmakers and the public have had with BP’s response to the spill – and many of the toughest complaints have been directed at Hayward.

Rep. Bart Stupak, D-Mich., said the CEO’s “evasive and obstructive” responses during Thursday’s congressional testimony further damaged BP’s reputation.

“Whether this change in Gulf leadership for BP will be productive remains to be seen,” Stupak said in a statement. “I expect that Mr. Dudley will 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.”

Also Friday, an oil company that owns a quarter of BP’s blown-out oil well, blasted BP for “reckless decisions and actions” that led to the well’s explosion.

Anadarko Petroleum Corp. Chairman and CEO Jim Hackett’s statement came after some elected officials said Anadarko should help pay for the massive cleanup and spill-related claims. Company spokesman John Christiansen said the comments were in response to “a week’s worth of testimony” and other information and data compiled on the disaster.

The recent oil containment efforts are a rare bit of good news for BP and suggest that its engineers are getting better at trapping oil after a two-month string of failures with equipment that clogged, proved ineffective or was simply abandoned.

“This is a significant improvement moving forward,” said Adm. Allen, the top federal official in charge of the spill.

But there’s still much that can go wrong, from strained hoses breaking to ships colliding in the crowded seas over the leak. A bolt of lightning hit a drill ship this week, starting a fire and halting oil collection for hours.

Stopping the leak will require a pair of relief wells that are not expected to be ready until August, although drilling has gone faster than expected.

“Certainly stopping it is the first step and the important thing anyone can do,” said Ed Overton, a professor of environmental studies at Louisiana State University. “Mother Nature can handle a lot of insult. It’s just when you pile it and pile it and pile it.”

Even if the new containment systems are a success, it could take months for those living along the Gulf Coast to notice any improvement. Experts say oil could be washing up for another six months, and it may take years for wildlife populations harmed by the spill to rebound to levels seen before the leak.

To collect oil, BP now has a containment cap sitting over a well bore that is siphoning oil and gas to a drill ship on the ocean surface. Separate lines are pulling oil and gas from beneath a stack of pipes above the seafloor to a drilling rig where the flow is burned. Engineers have been working since Wednesday to bring that system to full speed. The ability to contain oil should grow as BP and the federal government move toward getting oil-trapping equipment in place that could better withstand Gulf hurricanes. In addition, BP wants to take off the existing cap in July and replace it with one of three possible designs that would offer a tighter seal and siphon oil to two ships waiting above.

Cutting back on the flow would give cleanup crews some breathing room.

For example, the Coast Guard has put an emphasis on skimming the heavy oil as close to the damaged well as possible, before it breaks into thousands of smaller, unpredictable slicks that meander with the weather and can elude or outpace skimmers as they are pushed to shore.

But if the oil flow was substantially reduced, about 15 offshore skimmers could start chasing ribbons of oil – sometimes as long as 60 miles – that spread away from the leak site, said Coast Guard Rear Adm. James Watson, who coordinates day-to-day oil spill operations.

Watson wasn’t ready to make any plans just yet.

“I’ve tempered my optimism over time with this spill,” he said.