London, UKA long-rumored development in the saga of the BP oil spill may come to pass in a matter of hours with the expected ouster of British Petroleum CEO Tony Hayward, according to a Reuters report this morning in the New York Times. Hayward's handling of the Gulf of Mexico oil spill, together with published comments that have enraged Americans affected by the disaster, are thought to have moved the BP board away from their previously unfaltering support of the CEO.
Sources have told Reuters that the board of directors of BP Plc will be meeting this evening (UK time) to discuss the details of Hayward's departure, prior to installing a new CEO and announcing its Q2 performance tomorrow. The actual figures are not known, but analysts speculate that BP Plc will report a loss for the second quarter of $13 billion, in spite of an expected 77 percent increase in underlying profit.
The anticipated $13 billion is assumed to be part of BP's provisional machinations to achieve the $25 billion capitalization required for the cost of the oil rig spill.
The other big news is the rumored installation of an American as Tony Hayward's replacement. Reuters was reporting this morning that Bob Dudley, who is managing the response operation in the Gulf of Mexico, will be given the nod as the new BP chief.
It would be an historic move. Dudley would be the first non-Brit in BP history to land the top job, and as a Mississippi native, he may help soften the criticism of the worst oil spill in US history.
One analyst quoted in the Reuters report explained that the expected replacement of Hayward could be one of the reasons why BP is expected to post what has been described as an "eye-popping" loss when its Q2 number are released on July 27.
"In order to give the new CEO a fighting chance, we expect BP to write down the $20 billion clean-up costs this quarter," Arbuthnot analyst Dougie Youngson told clients in a communiqué. "We therefore anticipate that the company will post a loss in the order of $15 billion this quarter."
Other analysts say $13 billion.
Oil Well Capped, but Frustration Remains
It appears as if BP has turned the corner on the massive Gulf of Mexico oil spill, thanks to the successful installation of a cap that has apparently succeeded in stemming the flow since July 15. Improved weather in the Gulf is allowing equipment to return in an effort to complete work on a relief well and seal the problem well for good.
While that's the best news anybody has had in weeks, it does little to make up for the nearly three months that oil spilled into the Gulf practically unabated, killing wildlife, negatively impacting habitats and sensitive ecosystems, and threatening the lives and livelihoods of thousands of Americans.
Hayward, a 53-year-old geologist by trade, has drawn the ire of the world for the way he handled the spill and the various comments he has made along the way, particularly when he said he "wanted his life back" literally weeks after the Deepwater Horizon exploded.
BP has not said outright that it is replacing Hayward. According to Reuters, it is what has not been said that appears to be tipping their hand.
In a statement on July 26, BP dropped its previous language insisting that Hayward remained chief executive officer with the full support of the company's board and management: "BP notes the press speculation over the weekend regarding potential changes to management and the charge for the costs of the Gulf of Mexico oil spill. BP confirms that no final decision has been made on these matters."
Sources close to BP told Reuters that Hayward is a good as gone.
Terms of his contract will see him exit with a severance of one-year's salary of £1.045 million, or US $1.6 million. He could also be in line for additional payouts under the company's incentive scheme, which awards shares options.
And he would keep his pension entitlements, which were worth £10.8 million at the end of last year. Hayward's pension benefit alone would translate to US $16.7 million.
Despite BP's recent successful capping of the leak and the installation of an American CEO, US citizens directly affected by the BP crude oil spill will be hard-pressed to acknowledge without anger the financial perks accorded to the man who watched over the worst Gulf of Mexico oil spill in history.
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