After Hayward, What's Next For BP?
BP announced Tuesday that CEO Tony Hayward will step down from his position on Oct. 1. Oil industry analyst Holly Pattenden discusses the future running of BP and what it will mean for the company once Hayward is replaced.
RENEE MONTAGNE, Host:
This is MORNING EDITION from NPR News. Good morning, I'm Renee Montagne.
DON GONYEA, Host:
Here's BP's Chairman Carl-Henric Svanberg talking to the BBC.
CARL: This was a mutual decision by the board and Tony Hayward. And we all came to the conclusion that in order to rebuild the reputation, in order to rebuild the leadership position, we needed fresh leadership and that's what we're announcing today.
GONYEA: For some analysis, we turn to Holly Pattenden. She follows the oil and gas industry for the risk consulting firm Business Monitor International, and joined us from London. Welcome to the program.
HOLLY PATTENDEN: Thank you.
GONYEA: So what impact will Tony Hayward's departure as CEO have on BP itself?
PATTENDEN: There will be a lot of discussion over his severance package. But apart from that, it's good news all round.
GONYEA: Why October 1st? Why not immediately?
PATTENDEN: Interesting question. I think they want Tony Hayward to take the rap for this awful set of financial results that are coming out. And I think they need to make sure that the whole disaster is finished and that the well is plugged and absolutely completed before he leaves, because otherwise it looks as though he's leaving while the work is left undone. So I think they need a clean break and they've chosen October as the date.
GONYEA: So what can you tell us about his replacement, Bob Dudley? Seems significant that label, American, is attached to his name. But beyond that, who is he? What's his reputation?
PATTENDEN: But in general, I think it's a very good decision to bring him in. And I think his diplomacy and tact will work in BP's favor.
GONYEA: And quite aside from all the work that's obviously going on in the Gulf, I understand he's already been working on restoring the image of the company.
PATTENDEN: Yes, he has. His official title at the moment is managing director for the Americas and Asia, but that's quite a broad rim. And his role certainly been more that of being like a secretary of state. So, you know, really trying to help build up BP's reputation and leverage his diplomatic skills to BP's advantage.
GONYEA: And you mentioned BP's stock value was improving again. What's that based on?
PATTENDEN: The market capitalization of BP has plunged 40 percent since the disaster. They've now made proper provision for what costs they're expecting from the cleanup costs and compensation. And the situation is just much clearer now. I think there's quite a lot of room for the share prices to appreciate more in coming days and weeks.
GONYEA: What are the major challenges still ahead for this company? I mean the worst may be over in terms of oil gushing into the Gulf, but there's a lot of hard road ahead.
PATTENDEN: So there's a hard road ahead, absolutely. But I think BP is well-positioned because of its asset base and its managerial skills across the company, to weather this storm and to come out better and stronger.
GONYEA: Holly Pattenden analyzes the oil and industry for the risk analysis firm Business Monitor International. She spoke to us from London. Thanks for being here.
PATTENDEN: Thank you.
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