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Question of the Day
NEW ORLEANS (AP) — Tony Hayward, who became the face of BP’s flailing efforts to contain the massive Gulf oil spill, will step down as chief executive in October and will be offered a job with the company’s joint venture in Russia, a person familiar with the matter said Monday.
The person spoke on condition of anonymity because an official announcement had not been made by the British company’s board, which was meeting Monday in London to decide Mr. Hayward’s fate. The decision is the board’s to make, and it was unclear whether it had done so formally.
It’s not yet clear what Mr. Hayward’s role will be with TNK-BP. He left the board meeting Monday without speaking to reporters, climbing into a silver Lexus that sped off.
BP owns half of the oil firm, which is Russia’s third-largest.
It was once run by American Bob Dudley, now the odds-on favorite to replace Mr. Hayward as BP CEO. After Mr. Hayward made a series of missteps, including telling reporters he wanted his life back as Gulf residents struggled to deal with the spill, Mr. Dudley took over as BP’s point man in dealing with it. He was in London on Monday with other board members.
Mr. Hayward was called back to London a month ago after a bruising encounter with a congressional committee and has since kept a low profile.
“We’re getting to the end of the situation,” said David Battersby at Redmayne Bentley Stockbrokers. “To draw a line under it, they need a new chief executive.”
In New York, BP shares rose almost 5 percent Monday as the stock market anticipated a formal announcement about Mr. Hayward. Shares of BP PLC rose $1.82, or 4.9 percent, to $38.68 in midday trading in New York. BP shares closed up 4.6 percent Monday at 416.95 pence in London.
The BP board would have to approve a change in company leadership, and there is persistent speculation that Chairman Karl-Henric Svanberg, who moved into the post on Jan. 1, is also likely to lose his job later this year.
The one-day board meeting comes a day before BP announces earnings for the second quarter. That report is expected to include preliminary provisions for the cost of the Gulf disaster, with analysts saying that could be as high as $30 billion.
“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 Monday to the London Stock Exchange before trading began.
Shares were up 2.6 percent at 408.95 pence ($6.33) in midafternoon trading in London.
Mr. Hayward, 53, who has a doctorate in geology, was a well-regarded chief executive. But his promise when he took the job in 2007 to focus on safety “like a laser” came back to haunt him after an April 20 explosion on the Deepwater Horizon rig killed 11 workers and unleashed a deep-sea gusher of oil.
Mr. Hayward’s early attempts to shift blame to the rig operator, Transocean, failed to take the heat off BP. Later remarks that the amount of oil pouring into the Gulf was “tiny” compared to its volume of water and Mr. Hayward’s whining that he would “like my life back” made him an object of scorn. That emotion turned to fury when Gulf residents heard, at the height of the disaster, that Mr. Hayward spent a day at a fancy English sailing race in which his yacht was competing.
David Cumming, head of U.K. equities at Standard Life Investments, said the board’s reported intention to remove Mr. Hayward is an act of “political appeasement.”
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