i1 - - Hayward loses out in struggle atBP

tunate necessity of his departure, rather than News analysis clamouring for him to leave. Svanberg likely to As one person close to the stay on as chairman company put it: "Up until April 19 [the day before the to lead search for a Deepwater Horizon explo­ new chief executive, sion], his performance was excellent. " writes Ed Crooks Appointed in 2007 to rec­ tifY BP's terrible fmancial For the past few weeks and operational record in Carl-Henrie Svanberg (left). Tony Hayward and Bob Dudley leave the White House after meeting President Obama Reuters Tony Hayward and Carl- the final years of his prede- Hennc :::>vanberg have been cessor Lore! tsrowne, he locked in a battle for sur­ seemed to have set the com­ he has had to go, however, BP still believes it has a had to resolve the chair­ However, his performance vival. pany on the right course. seems to be that he has lost future in the US, in spite of manship first. on June 16 at the White BP's chief executive and Profits rose sharply relative the confidence of the US the spill, and it would have Mr Svanberg's perform­ House to negotiate BP's chairman have both been to BP's peers and the shares public and politicians. been impossible to sustain ance during the crisis was payment of $20bn for vic­ savagely criticised for their outperformed. Meanwhile, A succession of perceived its presence there with Mr attacked by several of BP's tims of the spill, when he roles in the Gulf of Mexico measured indicators of gaffes in interviews made Hayward as chief executive. leading ' investors, who felt seems to have struck up a crisis, Mr Hayward most safety improved. him, in the words of the While his departure was he had not been sufficiently good working relationship strongly in the US, Mr Even before any of the New York Daily News, "the unavoidable, the timing of engaged or doing enough to with President Barack Svanberg by UK sharehold­ investigations into the dis­ most hated and clueless it was still up for debate. help and supervise Mr Hay­ Obama, has counted in his ers. aster have concluded, there man in America". In British corporate gov­ ward. favour. Among BP's investors has been some evidence to Another person close to ernance, the prime job of Some of his defenders Now it looks as though he there has been an expecta­ suggest that that improve­ BP said the prime criterion any chairman is to hire have said "he has not done will be allowed to stay on to tion that both would have ment in safety had not sunk for decisions about manage­ and, if necessary, fire the anything wrong", to which lead the succession. to lose their jobs, so that as deeply into the company ment was not past perform­ chief executive. his critics might retort that That does not look diffi­ the company could begin to as Mr Hayward had hoped. ance, but ability to lead the Before BP could make a he has not done much right, cult. The Mississippi-raised look to the future. The central reason why company in the future. decision on Mr Hayward, it either. Bob Dudley, who has been Among BP's board and its helping to restore BP's advisers, however, there image in the US with his have been deep concerns Dudley w111 'need his quiet steeliness and experience as a tough arbiter performance as the new about the idea of changing head of the company's both the top jobs at the Bob Dudley will nl$:! more operational culture and owned by BP and Russian Mr Dudley was forced to response to the spill, is the company simultaneously, than his fabled calmness survive as an ' independent billionaire shareholders. flee Russia. He cited a obvious candidate. leaving BP with a double under fire - strenuously business. Supporters say he had campaign of harassment. BP While the leaking well in transition to new leadership tested in a shareholder Mr Dudley. BP's managing been a tough arbiter of said this was orchestrated the Gulf is not yet perma­ when ,it is in a vulnerable dispute in Russia - if he director for the Americas diverging shareholder by the Russian shareholders. nently sealed, but merely position. succeeds Tony Hayward as and Asia. has improved the interests as chief executive which they denied. fitted with a temporary cap, In effect, that has meant BP's chief executive. company's image since he since it was founded in He began his career with it might still be too early that either Mr Hayward or write Brian GrOom and was put in charge of co­ 2003. BP's Russian partners. Amoco in 1979. moving to for Mr Dudley to take over. Mr Svanberg would have to Catherine Belton. ordinating its Gulf of Mexico however. accused him of BP when it took over Amoco He runs the risk of hav­ go first. It is that battle that The American will need to clean-up and compensation running the company only in in 1998. At BP he was an ing his reputation tarnished Mr Svanberg appears to convince investors and efforts a month ago. In BP's interests as they executive assistant to Lord right at the outset if some- have won. , lawmakers that BP can meet 2008. he won plaudits from sought more control. Browne. the former chief thing goes wrong. That Many of BP's sharehold­ its $40bn-plus liabilities, BP colleagues for his quiet As pressure mounted with executive. and oversaw might be the single best j ers have been very support­ come through an array of steeliness in handling the investigations into labour law operations in Russia before reason for BP's board to ive of Mr Hayward. They investigations, transform its dispute at TNK-BP. 50:50 violations and visa problems. heading TNK-BP. give Mr Hayward just a lit- were resigned to the unfor- tle longer. I Simon Boxall of the UK's report by the American News analysis National Oceanography Bird Conservancy, a conser­ Centre at Southampton Uni­ vation charity, found that True consequences versity. in some cases BP was look­ for the environment The Coast Guard broadly ing for the oil in the wrong agreed, although Mr Jindal places. It found that many may not be known noted that still left 1.59m of the booms and ski=ers for months, write barrels of crude in the Gulf, being used were ineffective, where it continued to and said it had seen BP Harvey Morris and threaten the coastline of clean-up operators miss out Fiona Harvey Louisiana and its neigh­ on large areas where there bours. was still oil on the surface With oil no longer flowing The decision last Thurs­ of the sea. into the Gulf of Mexico and day by Jane Lubchenco, Visible oil is only part of with BP on the way to shut­ head of the National Oce­ the problem, moreover. ting down permanently its anic and Atmospheric Studies of undersea pollu­ ill-fated Macondo well, sci­ Administration (NOAA), to tion have been under way entific assessments are reopen a third of the SO,ooo since May to establish the under way to determine the square miles of federal existence of vast plumes of full extent of the environ­ waters previously closed to oil identified by some aca­ mental consequences of the fishermen reflected a per­ demic teams as potentially 87-day leak. ception of a diminished threatening marine life The answer, which may threat in at least some hundreds of metres beneath not be known for months, areas of the gulf. the surface of the gulf. will inevitably fall some­ "When you fly over the "What we found was that .., where between the wilder Gulf of Mexico you see a there were certain indica­ z claims that the massive dramatic change," Mr Sut­ tors of oil and that it z;I> spill would annihilate tles said. was highly dispersed," said n marine life in the world's However, many environ­ Larry Mayer, a New Hamp­ :;; ninth largest sea and the mental groups are sceptical shire University oceanogra­ r­ -f early judgment of Tony of this sanguine attitude. A pher. When it came to the ,..,3: Hayward, chief executive of quantities of oil found - VI BP, that the impact would studies showed traces of s:: be "very, very modest". between one to seven parts o z Complicating the issue is per million - he said it was o a single question: where is too early to gauge the ;I> -< the oil? impact. '­c The Financial Times put Another issue is the dis­ ~ the question to Doug Sut­ persants used to clean up N a> tles, BP's chief operating the spill, which some scien­ N officer, when he visited an tists fear could end up hav­ o undersea robot co=and A brown ing a worse effect on sea o vessel in the Louisiana oil pelican on life than the oil. Martin town of Port Fourchon. the Florida Preston, a marine chemist "The oil has gone to a coast at the University of Liver­ number of places," he said. pool, said the effects of the "About 1m barrels was col­ dispersants were still lected and a quarter of a unknown, as their use in million barrels burned. It's this manner was "unprece­ a very light oil, so lots of it Kill delayed dented". evaporated." Some local experts in Mr Suttles noted there BP's operations to kill its Louisiana say the wetlands had been a dramatic Macondo well have been have suffered decades of oil decrease in quantities of delayed by seven to nine pollution since the industry surface oil since the leak days after a storm alert in began there, and that the was capped. Last Wednes­ the Gulf of Mexico forced latest damage to marshland day, before tropical storm an evacuation of vessels, is much less than that Bonnie interrupted the writes Harvey Morris. already suffered as a result clean-up effort, only 56 bar­ Engineers are planning a of ill-conceived water­ rels of oil-water mix were "static kill" of the well by management projects, ski=ed compared with up pumping drilling mud dredging of oil pipeline to 25,000 barrels a day pre­ down it and plugging it canals and hurricanes. viously. with cement. A relief we ll Evidence of the spill's When Mr Hayward made that will permanently impact on wildlife has also his remark about the spill's resolve the crisis is also been inconclusive. "modest" impact, BP was nearing completion. Although the spectre of still insisting that only 5,000 Vessels began returning oiled brown pelicans barrels a day were escap­ to the well site on enraged the public, the ing. Calculations by govern­ Saturday as tropical storm breed - once almost extinct ment scientists have now Bonnie was downgraded to as a result of run-offs of the put that figure as high as a tropical depression. now banned pesticide DDT 60,000 barrels a day for the Retired Admiral Thad - still thrives along the gulf duration of the leak. Allen, federal co-ordinator coastline. That amounts to 5.4m for the disaster response, As of July 23, 1,403 birds barrels of oil, as Bobby Jin­ said surveillance was of all species had been col­ dal, Louisiana governor, under way yesterday to lected visibly oiled and a noted last week, quoting a see if the adverse weather third released to the wild Coast Guard report. This had moved floating oil after being cleaned. A fur­ upper estimate is equal to closer to the coastline. ther 1,149 were found dead a day's US crude produc­ Jane Lubchenco, head and visibly oiled. tion. The report said 2.6m of the National Oceanic The total of oiled sea tur­ barrels of the oil had evapo­ and Atmospheric tles located, the overwhelm­ rated or otherwise biode­ Administration, said the ing number still alive, graded. weakened system, with amounted to 189. "A lot of the oil is being winds of up to 30 miles evaporated and broken up. an hour, could help to The battle for survival The conditions in the Gulf disperse surface oil. at the top of BP, are favourable to this," said Page 16 World news

Workers hired by BP pick up oil on the beach in Gulf Shores, Alabama, and (right) a satellite shows a dark streak of oil in the Gulf of Mexico AP

• P ••••••••••••••• ••••••.•.•.• 'f . •••••••• t • 5.4m 34.6m 1.84m •••... it 20,000 4,303 barrels of oil gallons of oily water gallons of ..... tonnes of sand used active spilled in the gulf recovered dispersants . ! .,. by Louisiana National response used in total :. Guard to fill coastal gaps vessels in total ... , ...... 2.6m 11.14m 11,500km 114 41,000 barrels of oil either gallons of boom aircraft personnel involved evaporated or biodegraded oil burned deployed in response in total

••••••••••••••••••••• 0 ••••••••••• Sources: Deepwater Horizon Response, Louisiana Governor ' 5 Office 'as of July 21 Clive Crook, Page 7

l Tony Hayward. BP chief executive. left. and Bob Dudley. his likely successor. after meeting Barack Obama. US president. last month Reuters Hayward set to quit as chief of BP

By Ed Crooks and Fiona Harvey ward remains the chief execu­ Carl-Henric Svanberg, chair­ Browne. The favourite to replace in London tive and has the full support of man of BP, has also been Mr Hayward is Bob Dudley, the the board and senior manage­ strongly criticised, particularly managing director for the Amer­ Tony Hayward, the embattled ment." by BP's shareholders, but will icas and Asia who joined the BP chief executive of BP, is set to However, the company's have the final say on Mr board in February 2009. Raised announce his departure, shareholders and advisers have Hayward's future. in Mississippi, in the Gulf of possibly as early as today, come to believe that he will Reports over the weekend sug­ Mexico region, he has been over­ according to poople close to the have to go because of the dam" gested that there were discus­ seeing BP's response to the spill UK oil company. age done to his standing in the sions under way over Mr Hay­ since last month. However, Mr Hayward is US. He was vilified by the Amer­ ward's pay-off, but there is little Mr Dudley is the former chief likely to ·stay on until the leak­ ican media and politicians for leeway for the board in agreeing executive of TNK-BP, the ing well in the Gulf of Mexico seeming to play down the the terms of his departure. group's 50 per cent owned has been permanently sealed. significance of the spill. He is likely to be owed a Russian joint venture, but was The board is meeting this year's salary, which was forced to leave the country afternoon to make a final deci­ £l.045m (€1.25m) in 2009, and during the dispute with the Rus­ sion, as it prepares for BP's sec­ A significant pay-off take a pension pot accrued over sian shareholders in 2008. ond-quarter results announce­ would be likely to 28 years at the comPillY, worth A tropical storm has forced ment tomorrow. £10.84m at the end oflast year. BP to suspend operations on The company is expected to provoke criticism from A significant pay-off would be capping the spill, but these are make a provision of $25bn-$30bn US politicians who likely to provoke criticism from expected to resume within the to cover the costs of its massive US politicians who have focused next few days. oil spill in the Gulf of Mexico, have focused their their anger over the spill on the the largest such incident ever in anger on Hayward 53-year-old who took on the Oil sleuths. Page 3 US waters. chief executive's role in 2007, Battle for survival, Page 16 BP said yesterday: "Tony Hay- after the departure of Lord www.ft.com/bp Monday, July 26, 2010 THE WALL STREET JOURNAL. 3 NEWS One crisis eclipses Hayward's career

By PAUL SONNE the company's Texas City refinery that left 15 people dead. LONDON-In three short months, Although he 53-year-old Mr. Hay­ , BP PLC Chief Executive Tony Hay­ ward brought in a system to enforce r ward learned what it meant to be­ safety standards across the com­ come the face of disaster. pany just months after becoming Until this spring, Mr. Hayward CEO, his vision did not always was a brainy geologist leading a trickle down. The company saw con­ seemingly successful turnaround cif tinued leaks in its pipeline iin BP's sluggish operations and posi­ Alaska, and problems persisted wi1th tioning it to compete more effec­ pressure-relief valves at its refinery tively with rivals such as Royal in Toledo, Ohio. I Dutch Shell. BP has said that Mr. Haywardl's But that fell by the wayside on cost-cutting drive-$4 billion in r'e­ April 20, when the Deepwater Hori- duced costs in 2009 alone-allowed zon oil rig, drilling a well for BP, the company to put more resources exploded and sank, sending hun­ into operations, including safety, but dreds of millions of gallons of oil critics have asked whether it nur­ spewing into the Gulf of Mexico. tured a culture of cutting corners. Eleven workers died in the catastro­ Mr Hayward rejected that criticism Iphe. during an acrimonious Congressio­ nal hearing last June. An "ouster is way overdue. He's He was making headway on lost his legitimacy to lead," says Jef­ frey Sonnenfeld, a professor at the cutting costs and improving Yale School of Management. safety at BP, but he failed to By most accounts, it was Mr. Hayward's inability to generate connect with the people of much empathy from the U.S. public the Gulf Of Mexico region that led to calls for his ouster. He helped fuel that perception with a when the oil spill struck. number of gaffes, such as his initial description of the spill as "relatively tiny," and his decision to attend a BP CEO Tony Hayward discusses recovery operations abgard a drill ship in the Gulf of Mexico on May 28. Now, as BP board meets Monday yacht race in June, even as the oil to decide Mr. Hayward's fate, his slick continued to spread across the to be able to come from the heart world testing rocks for oil-from But three years on, Mr. Hayward story has become a cautionary tale Gulf of Mexico. and make these people feel that Papua New Guinea to Northern Ye­ finds himself in the midst of a dif­ to CEOs everyWhere of how a single Robbie Vorhaus, a crisis expert there is a connection." Mr. Vorhaus men. ferent kind of scandal. mishandled crisis can eclipse an en­ at Vorhaus Communications Inc. in says that's where Mr. Hayward Mr. Hayward moved from spe­ "Maybe he would have had a tire career. Sag Harbor, N.Y., says that in such failed. cializing in science to understand­ chance if he had been' just really Mr. Hayward became CEO of BP crises CEOs face the task of becom­ Mr. Hayward had experienced lit­ ing business in 1990 when he be­ spectacular on his feet as the crisis a little over three years ago. He ing human. "All of a sudden you tle that would have prepared him to came the assistant to John Browne, manager, but he was so abysmal at promised to reverse the mistakes of have an event where you are now adopt the populist touch. He joined then head of exploration and pro­ that, there was no way out," says his predecessor John Browne, who standing in the spotlight among BP in 1982, not long after he re­ duction who five years later became Sydney Finkelstein, a professor at left amid personal scandal and left a shrimp fisherman and local politi­ ceived a PhD in geology from Edin­ CEO. the Tuck School of Business at legacy of lackluster performance cians and people who maybe make burgh University in Scotland. He Mr. Hayward eventually replaced Dartmouth College. and poor safety practices - the lat­ 20 or 30,000 dollars a year," Mr. worked as a rig geologist in the Mr. Browne, who left amid a scandal -Erin White and Guy Chazan ter thanks to the 2005 explosion at Vorhaus said. "A true leader needs North Sea, then flew around the connected to his personal life. contributed to this article. I -