BP: Hayward steps down amid £20bn Gulf bill
Updated on 27 July 2010
BP confirms chief executive Tony Hayward is to step down, as the company reports its first quarterly loss in almost 20 years. Channel 4's Who Knows Who looks at his journey from rig geologist to "most hated man in America".
The oil giant said it has taken a £20.8bn hit from the disaster in the Gulf, dragging it into a £11bn loss for the second quarter.
Mr Hayward will be replaced by BP's first American chief executive, Bob Dudley, who took charge of the oil spill in June.
BP also revealed plans today to shake-up its portfolio, selling up to £19.3bn of assets over the next 18 months.
The sell-off will focus on assets in the group's exploration and production businesses, which Mr Hayward said would "reshape the company".
The group confirmed previous plans to cancel shareholder dividends for the rest of the year, as it grapples with soaring costs and after agreeing to set up the escrow fund to compensate the victims of the oil spill.
BP boss exit plan: who knows Tony Hayward?
Born in Slough in 1957 Mr Hayward was the oldest of seven children. He is an amateur triathlon athlete.
He gained a PhD in geology at the University of Edinburgh (fellow alumni include Gordon Brown) in 1982 and in the same year began working for BP as a rig geologist.
Speaking at Stanford business school in 2009 he said: "BP makes its money by someone, somewhere, every day putting on boots, overalls, a hard hat and glasses, and going out and turning valves."
Hayward's connections range from James Bond-esque meetings to the pie queue at Upton Park.
In 2008 he is known to have held private talks with Igor Sechin, a former top figure in the Russian military and ally of Vladimir Putin. The two reportedly negotiated on BP's deals with Russia.
Prince Charles will also be in his contacts book - the pair have discussed environmental issues and Hayward took part in the Prince's Accounting for Sustainability Forum at Clarence House in 2008.
But he is more likely to find himself standing next to Russell Brand in the stands at the Boleyn Ground - both men are loyal West Ham fans and among the famous faces sometimes spotted at home matches.
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The £20.8bn hit includes the fund, clean-up costs to date of $2.9bn in the Gulf and charges of $29.3bn for future costs.
Mr Hayward said: "We expect we will pay the substantial majority of the remaining direct spill response costs by the end of the year. Other costs are likely to be spread over a number of years, including any fines and penalties, longer-term remediation, compensation and litigation costs."
The news came as environmental group Greenpeace attempted to shut down 50 BP service stations in central London this morning in a move to push the group "beyond petroleum" to adopt greener energy policies.
A BP spokesman said activists had managed to close down around a dozen service stations, adding that they would be reopened as soon as it was safe to do so.
He described the stunt as "an irresponsible and childish act which is interfering with safety systems".
After almost three decades as a BP 'lifer', BP chairman Carl-Henric Svanberg said he was "deeply saddened" to lose Mr Hayward.
However the group will put him forward for a non-executive role at the group's Russian joint venture TNK-BP – where Mr Dudley reigned as chief executive from 1998-2008.
Mr Hayward will receive a full year's salary in lieu of notice, of £1.045m, alongside his pension pot which after 28 years at BP will have swelled to an estimated £10.84m by the end of the year.
In an interview this morning with the BBC, Mr Svanberg defended Mr Hayward's pay off, saying: "There is nothing in this package that is awarded as a result of his departure apart from the 12 months (salary). He has accumulated his pension like any other employee."
More from Channel 4 News on the BP oil spill
- Megrahi inquiry 'is kicking BP while it's down'
- Obama: more work to do on BP oil spill
- Who knows who: Lockerbie, BP and those desert deals
- Who knows who: Tony Hayward
- Rivals, white knights or Libya: who wants BP?
- BP oil spill: timeline
Mr Hayward said: "The Gulf of Mexico explosion was a terrible tragedy for which - as the man in charge of BP when it happened - I will always feel a deep responsibility, regardless of where blame is ultimately found to lie.
"From day one I decided that I would personally lead BP's efforts to stem the leak and contain the damage, a logistical operation unprecedented in scale and cost. We have now capped the oil flow and we are doing everything within our power to clean up the spill and to make restitution to everyone with legitimate claims."
The group's shares warmed 5 per cent on the news of Mr Hayward's imminent departure yesterday, and held their position in early trading this morning.
Gulf costs aside, BP reported a 72 per cent rise in profits of £3.2bn, on the back of climbing oil prices.
Mr Svanberg said: "The tragedy of the Macondo well explosion and subsequent environmental damage has been a watershed incident. BP remains a strong business with fine assets, excellent people and a vital role to play in meeting the world's energy needs. But it will be a different company going forward, requiring fresh leadership supported by robust governance and a very engaged board."
Who is Bob Dudley?
Mississippi-raised Bob Dudley is expected to smooth over US outrage as BP's "fixer" with his softly spoken Southern accent. But Mr Dudley is no stranger to controversy himself, Channel 4 News reports.
Best known as former chief executive of BP's 50:50 Russian venture TNK-BP, Dudley was pushed out of Russia by the group's shareholders in 2008 – after suffering police raids, back-tax demands, legal action, office bugs and visa issues.
He exited the country steeped in scandal, blaming the dispute on a campaign waged by BP-TNK's billionaire oligarch shareholders. BP also accused its Russian partners of calling in the security services to target staff seen siding with the oil giant.
In the five years that Dudley led the TNK-BP formation however, the venture increased oil output 33 percent to 1.6 million barrels per day. Mr Hayward has previously described Dudley as "the management team's foreign secretary".
The son of a naval officer, Dudley started out as a field engineer with Amoco in Texas, later taking on roles in Scotland, Russia and China. He joined BP through its meger with Amoco in 1998. He is currently managing director of the BP Group, responsible for the company's activities in the Americas and Asia.
The 54-year old will become BP’s first non-British chief executive but will be based in London. The oil giant will be banking on Americans warming to Dudley's background – a thoroughly American childhood that led to a chemical engineering degree at the University of Illinois and an MBA at Southern Methodist University.
Mr Dudley said today he was honoured to be given the job but sad at the circumstances.
He added: "I do not underestimate the nature of the task ahead, but the company is financially robust with an enviable portfolio of assets and professional teams that are among the best in the industry. I believe this combination - allied to clear, strategic direction - will put BP on the road to recovery." He praised Mr Hayward for his "unremitting dedication" to the Gulf disaster.
The oil giant's shares rose around 5 per cent yesterday on the rumours of Mr Hayward's imminent departure, as analysts deemed the move to install Dudley in the top job a "sensible" one.
Howard Wheeldon, senior strategist at BGC partners, said: "They needed a new man at the helm. He is the one, as an American, who will lead the company forward for the next few years and they seem fairly content with that... I think it's a pretty sensible move."
