- Associated Press - Wednesday, September 29, 2010

LONDON (AP) — BP's incoming CEO fired the executive responsible for deep water wells like the one that blew out in the Gulf of Mexico and announced a new unit to police safety practices throughout the company.

Bob Dudley took the steps Wednesday to start work on repairing the company’s battered reputation, two days before officially taking over as CEO from Tony Hayward.

Mr. Dudley said Andy Inglis, BP's chief executive for exploration and production, would be standing down and his divisions would be broken up into three parts.

Mr. Inglis, who earlier this month was dropped from the board of BP's Russian joint venture, will be leaving the main board “by mutual agreement,” BP said.

The new safety organization will be headed by Mark Bly, who led the team which produced BP's report on the causes of the disastrous blowout of the Macondo well in the Gulf of Mexico.

That blowout led to widespread scrutiny and criticism of BP's safety practices, but Mr. Bly’s report earlier this month laid much of the blame on two contractors: Transocean Ltd., which operated the Deepwater Horizon rig, and Halliburton, which was in charge of cementing the well.

“This is a deeply challenging time for BP. The Macondo incident was a tragedy that claimed the lives of 11 people, caused injury to many others and had a widespread environmental impact,” Mr. Dudley said in a message to BP staff.

“Our response to the incident needs to go beyond deepwater drilling. There are lessons for us relating to the way we operate, the way we organize our company and the way we manage risk.”

BP shares jumped 2.8 percent higher to 416.8 pence following the announcement, but then retreated.

The Safety & Operation Risk unit will have the authority to intervene in all of BP's technical activities, the company said.

“It will have its own expert staff embedded in BP's operating units, including exploration projects and refineries. It will be responsible for ensuring that all operations are carried out to common standards, and for auditing compliance with those standards,” the announcement said.

Mr. Dudley, an American, was formerly in charge of BP's North American operations. He stepped up as the company’s public face in the United States following a series of public relations blunders by Chief Executive Tony Hayward.

“As I take up my new role I am aware of two things,” Mr. Dudley told the staff.

“First, there is a pressing need to rebuild trust in BP around the world. Second, BP's people have both the commitment and the capability to rebuild that trust.”

Mr. Dudley announced that Mr. Inglis would step down as head of the upstream division, leaving the board on Oct. 31 and the company by the end of the year.

The new upstream organization is to be led by three executive vice presidents: Mike Daly at Exploration, Bernard Looney for Development and Bob Fryar for Production.

They will work with Andy Hopwood, who becomes executive vice president for strategy and integration in a management team reporting to Mr. Dudley.

Mr. Dudley said he was not setting out to change everything at BP.

“We have great strengths that are important to maintain,” he said.

“We have a high quality portfolio of assets. We have a sound financial footing on which to build. We have good technology… Most importantly, we have great people.”