BP to get rid of Hayward? | The Mesh Report

BP to get rid of Hayward?

the Mesh Report Staff July 26, 2010 0

By Matt Krantz and Rick Jervis, USA TODAY

Oil giant BP, already under intense scrutiny over its handling of the Gulf of Mexico spill, faces more heat this week as its board meets today and releases earnings on Tuesday, and officials deny reports swirling over who will lead the company.
BP (BP) said Monday that “no final decision” has been made about management changes, which reportedly include the departure of Tony Hayward as chief executive in an effort to mend the company’s image after the Gulf of Mexico oil spill.

The oil company said its board would meet Monday evening, a day before it announces earnings for the second quarter.

“BP notes the press speculation over the weekend regarding potential changes to management and the charge for the costs of the Gulf of Mexico oil spill. BP confirms that no final decision has been made on these matters,” the company said in a statement to the London Stock Exchange.

Shares were up 2.2% at $6.31 in early trading in London.

British media reported over the weekend that Hayward was negotiating the terms of his departure ahead of its second quarter results announcement on Tuesday. A U.S. government official also said on condition of anonymity that Hayward is on his way out as CEO.

However, the Financial Times reported Monday that he was likely to stay on for two more months while BP continues work on drilling relief wells, seen as the permanent solution to the leak.

The BP board would have to approve a change in company leadership.

Citing unidentified sources, the BBC and Britain’s Sunday Telegraph said detailed talks regarding Hayward’s future had taken place over the weekend.

Citing a senior U.S. government official familiar with the decision as its source, the Associated Press reported, Hayward, is being replaced.

Hayward, who has led the company since May 2007, could be replaced as early as today but possibly on Tuesday, when BP is expected to report a quarterly profit according to earlier reports from Bloomberg News, who quoted two people familiar with the matter. USA TODAY could not confirm Hayward’s replacement.

Hayward has incensed many of those affected by the spill with comments such as saying he wanted his life back and describing the spill as “relatively tiny.” Hayward was also criticized for attending a yacht race while the catastrophe was ongoing.

Company spokeswoman Jessie Baker says Hayward remains CEO and declined to comment further. BP is expected to report a quarterly profit, before charges, of $4.7 billion, Thomson Reuters says, up from the $4.4 billion it earned in the same period a year ago because of stronger oil prices.

Press reports and analysts suggest Hayward’s likely successor would be Robert Dudley, who has headed BP’s unit in charge of managing the cleanup.

Removing Hayward is a way for BP to show it is taking the disaster seriously, says Fadel Gheit, analyst at Oppenheimer. “Hayward has become the sacrificial lamb,” says Gheit, who says the company is acting too rashly. Trying to clean the Gulf and fix BP’s reputation may be like drinking from a “poison chalice” for Hayward’s successor, says Pavel Molchanov, analyst at Raymond James.

Gulf Coast officials, though, are pleased with reports BP might oust Hayward. “The guy had no compassion, no sense of urgency. He was in denial the whole time,” says Billy Nungesser, president of Plaquemines Parish in Louisiana.

And in Grand Isle, news that Hayward might be replaced was met with “jubilation” among locals, Councilman Jay LaFont says. Weeks ago, residents erected street signs painted with caricatures mocking Hayward, calling him “Tony Baloney.”

“That statement he made really impacted and got to a lot of people here,” LaFont says. BP has “a long way to go to improve public relations — but it’s a start.”

Contributing: The Associated Press

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