BP's Hayward to step down in October

The oil giant's beleaguered chief executive will be replaced by an American.

BP has announced this morning that its beleaguered chief executive, Tony Hayward is to step down as group chief executive with effect from October 1. He will be succeeded by another BP director, the American Bob Dudley, who is currently running the unit responsible for clean-up operations and compensation programmes in the Gulf of Mexico after the disastrous oil spill that followed the explosion on one of the company's rigs in April. At the same time the oil giant revealed it has taken a pre-tax charge of US$32.2 billion for the Gulf of Mexico oil spill, including the $20bn compensation fund previously announced. It said its headline loss for the second quarter of this year was $17bn, after taking in all costs including those of the Gulf of Mexico disaster. Underlying profit was $5bn, however, up from $2.9bn in the second quarter of 2009. Second-quarter operating cash flow, excluding Gulf of Mexico oil spill costs, was $8.9bn, up 31 per cent compared with the same quarter last year. BP also said it plans to sell assets for up to $30bn over the next 18 months, primarily in the upstream business, "and selected on the basis that they are worth more to other companies than to BP". Mr Hayward's position has looked untenable since the explosion at one of the company's wells in the Gulf of Mexico and the subsequent oil leak, the worst environmental disaster in the history of the United States. BP's chairman, Carl-Henric Svanberg said: "The BP board is deeply saddened to lose a CEO whose success over some three years in driving the performance of the company was so widely and deservedly admired. "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. "We are highly fortunate to have a successor of the calibre of Bob Dudley who has spent his working life in the oil industry both in the US and overseas and has proved himself a robust operator in the toughest circumstances," Mr Svanberg said. Mr Dudley, 54, joined BP from Amoco after the merger of the two companies in 1998. He was president and chief executive of BP's Russian joint venture, TNK-BP, until 2008. He was born in New York and grew up in Hattiesburg, Mississippi. BR said that when he takes up the role of chief executive he will be based in London and will hand over his present duties in the US to Lamar McKay, the chairman and president of BP America. Mr Hayward will remain on the BP board until November 30, 2010. BP also plans to nominate him as a non-executive director of TNK-BP. He 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. BP said that under the terms of his contract Hayward would receive a year's salary in lieu of notice, amounting to £1.045 million. [e-mail]