Asia-Pacific

BP confirms Hayward departure as CEO

(Agencies)
Updated: 2010-07-27 15:11

LONDON - BP PLC said Tuesday that embattled Chief Executive Officer Tony Hayward will step down on October 1, to be succeeded by American Robert Dudley, and that it has set aside $32.2 billion to cover the costs of the Gulf of Mexico oil spill.

In a statement accompanying its quarterly earnings update, in which BP reported a record quarterly loss, the company said the decision was made by mutual agreement. In a mark of faith in its outgoing leader, it said it planned to recommend Hayward, 53, for a non-executive board position at its Russian joint venture.

"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," BP Chairman Carl-Henric Svanberg said in a statement.

Related readings:  BP CEO Hayward to step aside  BP says no plans to issue statement on CEO  BP says 'no final decision' on replacing Hayward  Official: BP CEO being replaced over spill

Svanberg said the explosion of the Macondo well on the Deepwater Horizon platform run by BP in the Gulf of Mexico has been a "watershed incident" for the company.

"BP remains a strong business with fine assets, excellent people and a vital role to play in meeting the world's energy needs," he said. "But it will be a different company going forward, requiring fresh leadership supported by robust governance and a very engaged board."

Svanberg described Dudley, 54, who was thrown out of Russia after a battle with shareholders in the company's TNK-BP joint venture, as a "robust operator in the toughest circumstances."

BP said that the $32.2 billion charge for the cost of the spill led it to record a loss of $17 billion for the second quarter.

The company said it planned to tell analysts in an update later Tuesday that it will sell assets for up to $30 billion 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."

That would leave the company with a smaller, but higher quality Exploration & Production business, it said.

The company said that Dudley will be based in London when he takes up his appointment and will hand over his present duties in the United States to Lamar McKay, the chairman and president of BP America.

Hayward will remain on the board until November 30.