NEW ORLEANS Battered BP began reinventing itself in the shadow of the Gulf of Mexico oil spill Tuesday, naming its first American CEO as it reported a record $17 billion quarterly loss. Its outgoing chief miffed the White House anew with his parting comments.
Robert Dudley, who will replace Tony Hayward on Oct. 1, promised changes in light of the environmental disaster.
Theres no question we are going to learn things from this investigation of the incident, he said to reporters by phone from London after the announcement was made.
One certain change is that BP will become smaller. It announced it will sell $30 billion in assets and has set aside $32.2 billion to cover costs from the largest offshore oil spill in U.S. history.
Dudley, BPs managing director and current point-man on oil-spill recovery, defended his companys record and that of the embattled chief executive he will replace.
Hayward, whose verbal miscues intensified the anger Gulf Coast residents already felt, will leave BP with benefits valued at more than $18 million. He told reporters he had been demonized and vilified but had no major regrets about his leadership.
Life isnt fair, he said, but he conceded that wasnt the point. BP cannot move on in the U.S. with me as its leader.
The White House was not impressed with Haywards comments.
Whats not fair is whats happened on the Gulf, press secretary Robert Gibbs said. Whats not fair is the actions of some have caused the greatest environmental disaster that our country has ever seen.
BP PLC announced the move Tuesday with an air of making a fresh start, nearly 100 days into a catastrophic mile-deep blowout that killed 11 workers, spewed 94 million to 184 million gallons of oil and sapped 35 percent, or $60 billion, of BPs market value.
We are taking a hard look at ourselves, what we do and how we do it, BP Chairman Carl-Henric Svanberg said during a webcast presentation on the companys earnings.
Svanberg said the companys priority was to stop the Gulf leak permanently, clean up the spill and compensate people whose livelihoods have been lost. But he added that the company was determined to restore value to shareholders, whose dividends were axed by BP under U.S. political pressure.
Company shares dropped 65 cents, or about 1.7 percent, to close at $38 in Tuesday trading in New York.
BP said it would become a leaner, higher-quality business through its planned sale of $30 billion in assets. The company already has made a start with the $7 billion sale of gas assets in the United States, Canada and Egypt to Apache Corp.
Svanberg said the planned asset sales did not necessarily reflect a fear that spill costs could soar to more than the $32.2 billion set aside by the company.
Analysts were disappointed that BP intended to sell so many assets.
Oppenheimer & Co. analyst Fadel Gheit said BP should be a 10 percent smaller company after its planned sales but that BP should remain the top oil and gas producer in the U.S., unless it sells off a large portion of its Alaska assets. The company reportedly was considering the sale of its stake in the Prudhoe Bay oil field to Apache Corp., but instead sold Apache properties in Texas and New Mexico, as well as Egypt and western Canada.
BP said Tuesday it will not sell its assets in La Plata County.
BP said the U.S. is home to 40 percent of BPs assets and one-third of its worldwide oil and gas reserves.
Before the Gulf incident, BP said its exploration activities were focused around Angola, Egypt, the deepwater Gulf of Mexico, Libya, the North Sea, Oman and onshore U.S.
Analysts also said BPs estimate of spill costs was on the conservative side. Gheit predicts BP eventually will pay between $30 billion and $60 billion.
Based on the upper estimate of oil spilled so far, BP could be fined up to $4.8 billion under the Clean Water Act, or up to $18.8 billion if it is found to have committed gross negligence or willful misconduct. BPs estimate assumes it would not get the harsher penalties.
Any fines would be on top of the compensation BP has agreed to pay to thousands of people harmed by the spill. Under U.S. government pressure, it set up a $20 billion escrow fund to pay all claims, including environmental damages and state and local response costs.
Dudley pledged that his company will remain committed to the Gulf region even after the busted well is sealed for good something that may happen soon. A temporary cap has held back the oil for nearly two weeks, a static kill effort to plug the well from above is to begin Monday, and the permanent fix a relief well could begin sealing the well from the bottom for good with mud and cement days after that.
Dudley was brought in to oversee the spill response after Hayward was vilified for a series of gaffes, including minimizing the spills impact, saying that he would like his life back and attending a yacht race off the coast of England as Gulf residents struggled to cope with the spill.
In a mark of faith in its outgoing leader, the company said it planned to recommend Hayward for a non-executive board position at its Russian joint venture, TNK-BP.
The British CEO remains well-regarded in Europe, and his appointment would be a benefit for Dudley, who, as the former head of TNK-BP, was forced to flee Russia and run the company in absentia after a flap with shareholders in 2008.
Hayward has some sympathy in his native Britain, where many pensions rely on BP stock and some consider U.S. outrage at the company to be over the top. A recurring theme in newspaper editorials and discussions among many Britons is that there simply wasnt much one man could do in the face of relentless American wrath.
BP sends Tony Hayward to Siberia to appease US, read a headline in the Guardian.