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BP positions for fresh start

Wed., July 28, 2010

New CEO, leaner company first steps

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. “There’s no question we are going to learn things from this investigation of the incident,” he said.

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, BP’s managing director and current point man on oil spill recovery, defended his company’s 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 isn’t fair,” he said, but he conceded that wasn’t the point. “BP cannot move on in the U.S. with me as its leader.”

The White House was not impressed with Hayward’s comments.

“What’s not fair is what’s happened on the Gulf,” press secretary Robert Gibbs said. “What’s 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 BP’s market value.

“We are taking a hard look at ourselves, what we do and how we do it,” BP Chairman Carl-Henric Svanberg said.

Svanberg said the company’s 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.

Dudley, who will be based in London, will hand over spill response coordination to Lamar McKay, the chairman and president of BP America.

Dudley spent some of his childhood in Mississippi and worked for 20 years at Amoco Corp., which merged with BP in 1998. He lost out to Hayward on the CEO slot three years ago.

“I think you will find I listen hard and carefully to people and have worked with restructuring organizations to achieve change,” he said. “I did not seek out this job. I was asked to step into these shoes, and I firmly and deeply believe that BP is a company made up of great people and great businesses.”

Meanwhile, a barge slammed into an abandoned well near a Louisiana bay already fouled by the Gulf spill, sending natural gas and oil spewing into the air. Officials said the breach created a mile-long slick but that it was minimal compared with the gusher in the Gulf.

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