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Britain: UPDATE: BP shares rise as Dudley expected to replace Hayward

https://www.chemnet.com   Jul 27,2010
BP's shares rose in early trade Monday following widespread reports that
the embattled oil major plans to name Robert Dudley, the current head of its
US spill response, to succeed Tony Hayward as the company's chief executive.


The change is seen as a key move to help restore BP's US position, with
Hayward having been heavily criticized for his handling of the Gulf of Mexico
spill.


BP's shares rose by up to 3% after trading opened in London and were 2.1%
higher at 407.15 pence by 10:40 GMT.


Speculation has been rife in the British media that Hayward would quit as
CEO of the London-based company once the leak from the blown-out Macondo well
in the US Gulf is plugged.


British newspapers including the Sunday Telegraph, the Sunday Express and
the Independent on Sunday all reported that Hayward was poised to quit ahead
of Tuesday's half-year results.


In a statement early Monday, BP said it has not yet reached a final
decision on potential changes in management. BP's board of directors is to
meet late Monday ahead of the release of the company's second-quarter report
on Tuesday as is customary, when Hayward's tenure will also be discussed, a
company spokesman said.


HAYWARD'S GAFFES


Since the Gulf disaster started unfolding in April, Hayward has taken
personal charge of the company's response for most of the time, basing himself
in Houston.


But Hayward has made a string of gaffes, including saying he wanted his
"life back" and calling the spill "relatively tiny" in a "very big ocean." US President Barack Obama said he would have fired Hayward and the New
York Daily News said Hayward was "the most hated--and clueless-- man in
America."


Last month BP formalized a new business unit to handle the spill
response, putting senior executive Bob Dudley--the former head of BP's Russian
venture TNK-BP, who was forced out in a leadership dispute a year ago--in
charge and effectively removing Hayward from day-to-day management of the
incident.


Dudley, 54, was born in New York and grew up in Mississippi, part of the
Gulf Coast region suffering environmental and economic damage from the spill.
He later gradated with a degree in chemical engineering from the University of
Illinois.


Dudley has spent about 30 years in the oil industry, joining the former
Amoco Corporation in 1979, for whom he worked until its merger with BP in
1998.


Last year, Hayward has described Dudley as being "the management team's
foreign secretary or secretary of state in American terms."


Hayward, 53, has worked for BP for more than 28 years and is expected to
receive a single payoff equivalent to his annual salary, which stood at more
than GBP1 million in 2009, plus a pension pot valued at GBP10.8 million ($16.7
million) at the start of the year.


ASSET SALES, WELL KILL DELAYED


On Tuesday, BP is expected to report that its profit on a
replacement-cost basis rose to $5 billion in the second quarter, from $3.14
billion a year earlier, helped by higher oil prices and stronger refinery
earnings.


BP has said, however, that the figure will not include the $4 billion
already spent over the spill, with the Gulf costs dealt with as a
non-operating, identified item on a separate income statement.


UK daily The Times also reported Monday that BP is considering the sale
of some of its assets in Russia as it looks to raise cash for a $20 billion
fund to help to pay for the Gulf of Mexico oil disaster.


BP is understood to be considering the disposal of part or all of its
stake in TNK-BP, the Russian joint venture in which it holds a 50% share with
a group of oligarchs, the AAR consortium, the newspaper reported without
citing sources.


BP agreed its first major asset sale to help meet the costs of its
massive spill in the Gulf of Mexico last week, covering $7 billion worth of
upstream assets in the US, Canada and Egypt to US independent Apache.


BP announced plans in June to sell at least $10 billion worth of non-core
assets by the middle of 2011 as part of efforts to strengthen its balance
sheet to cover the potentially huge liabilities and damages associated with
the Macondo blowout.


BP's share price appeared to turn a corner in mid-July after a new
containment cap was installed on the failed blowout preventer on the blown-out
Macondo well, fueling hopes that the 13-week old spill would soon be over.


On Sunday, National Incident Commander Thad Allen said efforts to kill
the Macondo well in the Gulf have been pushed back to the week of August 1
because of delays caused by Tropical Storm Bonnie.


Ships have begun moving back to the site of the well, which began leaking
after an April 20 blowout, but has been capped since July 15.
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