Chief executive of BP expected to step down
Monday, July 26, 2010
As the first reports of the Gulf of Mexico oil-rig explosion trickled in to BP's London headquarters in April, BP chief executive Tony Hayward wondered whether to fly immediately to the United States.
One veteran of the company advised Hayward to keep his head down, saying, "There's no sense being Napoleon unless you can be certain of victory."
Hayward went anyway. In the end, it was a battle he couldn't win, but one he couldn't avoid, either. The oil spill has inflicted severe damage on the gulf, financial blows to BP and mortal wounds to Hayward's career.
On Monday, BP's board is expected to announce that Hayward, 53, will step down on Oct. 1. The departure, say people close to the company, will be his decision as much as the board's. Hayward, a geologist who has spent his entire career working for BP, is said to recognize that he has become a liability as the company tries to move forward.
The board will probably turn to Robert Dudley, who grew up in Mississippi and who joined BP from Amoco after the two firms merged. Dudley would be the first American to run the company once known as British Petroleum.
The real battle for Hayward had been lost earlier: the battle to change BP's corporate culture and improve safety. In 2005, two years before he became chief executive, cost cuts and sloppy procedures led to an explosion at BP's Texas City refinery, killing 15 people. The Chemical Safety and Hazard Investigation Board's lead investigator blamed a "history of budget cuts and underfunding." Lax maintenance also led to pipeline leaks in Alaska's North Slope.
Although BP's prior lapses were well known, fixing them was another matter.
Hayward tried to send the right signals when he took charge in 2007. He wrote an e-mail to employees saying that BP executives needed to listen better. He renovated BP headquarters, shrinking the chief executive's office to less than half the size of the palatial quarters of his predecessor, John Browne.
Hayward reshuffled the middle management ranks. And he vowed to focus "like a laser beam" on safety, a phrase that members of the House Energy and Commerce Committee threw in his face during a June 17 hearing.
Yet interviews with consultants and with former and current BP employees suggest that Hayward failed. The firm stressed, often to a comic extent, personal safety while not paying enough attention to safe processes.
Robert Bea, a professor and oil industry expert at the University of California at Berkeley, remembers a meeting at a Normandy resort in May 2008. Earlier, BP had hired Bea to write a report about the human element in safety. But BP boiled down his observations to a skit, which was performed by a dozen actors.