Tony Hayward out as BP CEO, US official says; shift removes a source of gaffes but not the oil
NEW ORLEANS – BP's Tony Hayward, whose gaffes added insult to oil-spill injury for the Gulf Coast, is on his way out as CEO, a U.S. government official said Sunday. Many residents found small comfort in that as BP's biggest mistake under Hayward continued to foul their waters, their beaches and their way of life.
A change in leadership will not change the mammoth tasks ahead of BP, from stopping the offshore oil gusher for good, to cleaning up the millions of gallons that have already leaked, to paying billions in claims — all while defending its stock price and repairing its battered reputation.
The senior U.S. official, who spoke on condition of anonymity because an announcement had not been made, was briefed on the decision by a senior BP official late last week.
The government official did not know who will replace Hayward or when it will happen.
One of the most likely successors is BP Managing Director Bob Dudley, who is currently overseeing the British company's spill response and would be BP's first American CEO if he is chosen. It is unclear if he would be juggling leadership of BP with oil-spill duties — just as Hayward once did — or whether he would delegate that duty to someone else.
Earlier Sunday, BP PLC spokesman Toby Odone seemed to downplay reports about Hayward's departure, saying he "remains BP's chief executive, and he has the confidence of the board and senior management."
BP's board would have to approve a change in company leadership. An official announcement could come as early as Monday.
It's been more than three months since an offshore drilling rig operated by BP exploded off Louisiana on April 20, killing 11 workers and setting off the spill. A temporary plug has stopped oil from gushing for more than a week now, but before that the busted well had spewed anywhere from 94 million to 184 million gallons into the Gulf.
Tropical Storm Bonnie forced ships fighting the spill to pull out, but crews returned quickly Sunday as the storm broke apart so they could resume work on a relief well, a permanent fix for the gusher.
Hayward, 53, was BP's most visible figure for weeks after the oil spill, but faded from the Gulf scene after several tone-deaf comments made people even angrier at the company than they had been. Possibly the most damaging comment came in late May, when Hayward told reporters, "I want my life back," as Gulf residents struggled with the effects of the spill.
He minimized the environmental effects of the oil spill, questioned the existence of oil plumes that scientists have identified and enraged members of Congress when he said he was out of the loop on decisions at the well before the explosion. Dudley took the lead on oil spill duties after Hayward was pilloried for going to a yacht race.
Plaquemines Parish President Billy Nungesser said Hayward's departure will be good for BP's image.
"I just hope they replace him with somebody who understands the situation, someone who will come down here and see what's happening on a regular basis, someone who will communicate with us," he said. "From the beginning it was obvious this guy was not the leader needed in this crisis."
But other Gulf residents shrugged upon hearing the news. The oil, they said, has already done its damage.
"It doesn't matter," said Chris Foss, a 39-year-old boat captain from Port Sulphur. "Whatever happens with the corporate dudes is irrelevant. The only thing that matters is what they are going to do about this mess."
Patrick Shay, 43, sat on a porch swing of his cottage in Grand Isle on Sunday, his front yard filled with small, white crosses, each bearing the name of sea life or ways of life the oil spill has killed.
"He seems like a pretty self-absorbed person, so I'm not surprised to hear he would walk away in the middle of all this," he said of Hayward. "If anything it will help. They need to get him out of the way and get this cleaned up."
David Duet, 62, of LaRose, La., filled his ice chest at the grocery store in Grand Isle, where he brings his camper every weekend despite the oil.
"I don't think he's directly responsible for the spill, but he still had to answer for it," said Duet, who worked on oil rigs for more than 22 years. "I can understand the time it took to cap it. I know how hard things are out there."
New Orleans Mayor Mitch Landrieu said BP's attitude about making things right is more important than who is running it.
"BP, from I think everybody's perspective, made a very bad mistake," he said. "I think what the world expects from BP is an acknowledgment that something was done wrong. I think BP has a long way to go to gain the trust of the people."
Hayward joined BP in 1982 as a geologist, and currently makes 1.045 million pounds (US$1.6 million) a year as the company's head, according to their annual report. In 2009, he received a performance bonus of more than 2 million pounds (US$3.1 million) plus other remuneration, bringing his total pay package to more than 4 million pounds (US$6.1 million).
The company can terminate the contracts of directors "at any time with immediate effect on payment in lieu of notice equivalent to one year's salary," the report says.
Hayward also would receive close to 600,000 pounds (US$900,000) a year upon retirement.
Hayward "became a sacrificial lamb in a politically charged world," said Oppenheimer & Co. senior analyst Fadel Gheit.
Dudley would be well suited to take over, Gheit said, describing him as even-tempered and a good delegator. But he added, "I'm not sure if removing Tony Hayward is going to throw BP's problems away."
Plugging the leaky well for good would knock one of BP's biggest problems off the list, and the company was looking to rebound Sunday from the shutdown forced by Tropical Storm Bonnie.
A drill rig was expected to reconnect at around midnight to the relief tunnel that will be used to pump in mud and cement to seal the well, and drilling could resume in the next few days.
Completion of the relief well that is the best chance to permanently stop the oil now looks possible by mid-August, but retired Coast Guard Adm. Thad Allen, the government's point man for the spill, said he wouldn't hesitate to order another evacuation if there are forecasts similar to the ones for Bonnie.
"We have no choice but to start well ahead of time if we think the storm track is going to bring gale force winds, which are 39 mph or above, anywhere close to well site," Allen said.
Allen said officials will spend the next day determining how Bonnie, which did no real damage on shore, affected the area. Oil may have migrated north to Mississippi Sound, he said, and officials are checking to see if boom that was protecting sensitive marshlands was pushed ashore.
Experts had hoped the storm would break up and disperse the dwindling amount of oil visible on the ocean's surface, but Rear Adm. Paul Zukunft, the Coast Guard officer supervising day-to-day cleanup, said that didn't end up happening.
"We never had the high winds, the high sea states you get with a more slow-moving and more severe storm," he said during a flyover with reporters Sunday afternoon.
Zukunft said aerial surveillance of the Louisiana coast Sunday found just one patch of emulsified oil, appearing as a milky strip in the sparking blue water.
Since BP's well was capped July 15, the amount of oil skimmed from the surface has plunged from just over 1 million gallons a day to about 2,400 gallons on Thursday, Zukunft said.
Associated Press writers David Dishneau and Greg Bluestein in New Orleans, Mary Foster in Grand Isle, La., and Emily Fredrix in New York contributed to this report.
(This version CORRECTS Corrects that New Orleans Mitch Landrieu, not Sen. Mary Landrieu, made comment about BP's attitude about making things right is more important than who is running it in paragraphs 28 and 29. This story is part of AP's general news and financial services. AP Video.)