Mandel Ngan/AFP/Getty Images
Bob Dudley replaced Tony Hayward as CEO of BP.
Bob Dudley replaced Tony Hayward as CEO of BP. Mandel Ngan/AFP/Getty Images
Steve LeVine is the author of The Oil and the Glory and a longtime foreign correspondent.
BP appears prepared today to answer its very American problem with a very American solution — replacing its decent and gentlemanly, yet deeply British and culturally tin-eared CEO, Tony Hayward, with Bob Dudley, who grew up in Mississippi and is demonstrating a knack with American public relations. That's the strength and also the weakness in the choice of the 54-year-old Dudley — he'll do as well as anyone toward getting BP back on track with Washington, and limiting the political fallout of the April 20th Gulf of Mexico oil spill. But whether he's the type of personality who can turn around Wall Street, and battle successfully for assets around the world, are other matters entirely.
The whys of the timing of Hayward's departure are obvious — today, BP will report its second-quarter earnings, and the company has been using the date as a tactical bookend to present good news to investors. The plug of the Macondo well still appears to be holding, so that's one great bit of news. But there was the remaining matter of who was going to take the fall for the catastrophe, and when. Hayward's days were clearly numbered, so with his announced departure, BP can declare an effective clean break, and hope that Wall Street responds by rebuying BP shares.
The United States is crucial to BP's survivability — the country accounts for about 40 percent of BP's business — so in that sense Dudley is less an inspired choice than the one that would be difficult not to make. "Dudley is a thoughtful capable man with a demonstrated ability to operate under pressure," Robin West, chairman of PFC Energy, a Washington consultant firm, told me in an email. In other words, naming him "is a start," West adds.
But Dudley didn't provide an exemplary showing in his other recent big experience in the limelight — his 2008 dust-up with four Russian oligarchs who are BP's partners in TNK-BP, a Russian company that accounts for some 20 percent of BP's global oil production and more than 10 percent of its profit. Dudley was CEO of TNK-BP when a dispute with the oligarchs broke out in 2008, and he ended up leaving Russia to what was politely called seclusion in an undisclosed location. More bluntly, Dudley fled and was hiding out. Early this year, the partners attempted to explain away the row as just one of those things — a warm spin on events described by the Wall Street Journal's Greg White — but the CEO doesn't go incommunicado for several months in a normal business disagreement.
So one is pressed to ask: Does Dudley now possess the intangibles to keep BP's important Russia operation going? Can he impress and inspire Wall Street, all the while figuring out how to square the high cost of the Gulf spill and the challenges of being a super-major in the first half of the 21st century?
One answer is that he isn't being selected as a visionary. Yet, that is what BP — and the rest of Big Oil — needs.