BP replaces CEO Hayward, makes record loss

“I think we have a lot to offer in the United States to the oil and gas industry and getting this right, working in the U.S., meeting those commitments and cooperating with officials is vital to BP’s future success in America,” he said.

Currently BP’s managing director, Mr. Dudley grew up partly in Hattiesburg, Mississippi, and has so far avoided any public missteps. He spent 20 years at Amoco Corp., which merged with BP in 1998, and lost out to Mr. Hayward on the CEO slot three years ago.

Mr. Dudley will return to London when he takes up his appointment and will hand over his present duties coordinating the spill response to Lamar McKay, the chairman and president of BP America.

Executives stressed BP’s strong financial position despite a $17 billion net loss for the April to June quarter — its first in 18 years — compared with a profit of $4.39 billion a year earlier.

Revenue for the quarter was up 34 percent at $75.8 billion, and underlying replacement cost profit — the measure most closely watched by analysts — was $5 billion when adjusted for one-off items and accounting effects. That compared favorably with a $2.9 billion profit for the second quarter of 2009.

Mr. Hayward, who will stay on BP’s board until Nov. 30, said the company had reached a “significant milestone” with the capping of the leaking well 12 days ago.

Over the next few weeks, BP will move ahead in parallel with so-called static kill and bottom-kill operations — blasting in mud and cement from the top of the well and from deep underground — and the company said it anticipates the first relief well will be completed during August, subject to weather delays.

Charles Stanley analyst Tony Shepard, who has a “hold” recommendation on the stock, said the successful permanent blocking of the leak and some good asset disposals could give more relief to the share price.

“But the longer term effects of the disaster are still unclear and when BP returns to paying dividends, we do not anticipate such a high payout,” he added.

Mr. Svanberg said the board was “deeply saddened” to lose Mr. Hayward, 53, who spent almost 30 years at the company, praising his success in streamlining and boosting profits at the bloated company he inherited as CEO three years ago.

In a mark of faith in its outgoing leader, the company said it planned to recommend him for a non-executive board position at its Russian joint venture, TNK-BP.

Mr. Hayward remains well-regarded in Europe and his appointment would be a benefit for Mr. Dudley, who, as the former head of TNK-BP, was forced to flee Russia in 2008, running the company in absentia until that became untenable, after a row with Russian shareholders.

Mr. Hayward, who paid the price for a series of gaffes, including the comment “I’d like my life back,” will receive a year’s salary of 1.045 million pounds ($1.6 million) as part of his severance package. He will also be entitled to draw an annual pension of 600,000 pounds from a pension pot valued at around 11 million pounds and retains his rights to shares under a long-term performance program which could eventually be worth several million pounds if BP’s share price recovers.

Mr. Hayward said it was right that BP embark on its next phase under new leadership, and expressed his condolences for the families of the 11 workers who were killed in the explosion.

“The Gulf of Mexico explosion was a terrible tragedy for which — as the man in charge of BP when it happened — I will always feel a deep responsibility, regardless of where blame is ultimately found to lie,” he said.

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