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BP boss Hayward to get job in BP-Russian venture

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BP boss Hayward to get job in BP-Russian venture
BP boss Tony Hayward resigns

Tuesday, July 27, 2010

BP says CEO Tony Hayward will step down on October 1.

He’ll be succeeded by American Robert Dudley.

It is understood he will be offered a job on the board of the companies Russian arm.

BP is jettisoning CEO Tony Hayward, whose verbal blunders have made the oil giant’s image even worse as it struggles to contain the Gulf of Mexico oil spill, and will assign him to a key job in Russia, a person familiar with the matter says.

Hayward is set to step down in October and take a post at TNK-BP, the company’s joint venture in Russia, a source told the Associated Press on Monday, speaking on condition of anonymity because an official announcement had not been made by the British company’s board.

Other news reports said Hayward could be cut loose by the British energy giant as early as Tuesday, when BP announces its quarterly earnings and battles to rebuild its reputation amid the worst environmental disaster in U.S. history.

Hayward could get a payoff and pension package worth about $18.67 million, The Times and the Financial Times newspapers reported in London.

His reported payoff would be the equivalent of one year’s salary plus a guaranteed pension for the 53-year-old who started his career with the firm 28 years ago and took over as chief executive in 2007.

According to the BBC, Hayward will get an immediate annual pension worth about $1.614 million when he leaves in October.

BP said, however, there was no decision on Hayward, whose string of public relations gaffes during the crisis include telling reporters ‘I want my life back’ and joining a yacht race as Gulf residents battled the massive oil spill.

‘BP confirms that no final decision has been made on these matters,’ a spokesman for the energy giant said on Monday.

‘Any decisions will be announced as appropriate.’

BP’s board met on Monday, and a statement was expected early Tuesday, when the company files its second quarter results – which are expected to reveal a $30 billion provision for funding the disaster.

Hayward is expected to be replaced by Bob Dudley, who grew up in Mississippi and is now in charge of the oil cleanup operation.

BP has said Dudley has a ‘deep appreciation and affinity for the Gulf Coast’.

Hayward left BP’s headquarters after Monday’s board meeting without speaking to reporters.

His silver Lexus was mobbed by photographers, who chased the car down the street in central London.

Hayward has drawn criticism in recent months from U.S. President Barack Obama – who said he would have fired him – and other senior U.S. figures and Gulf residents over his handling of the aftermath of the disaster.

The White House Monday warned BP that any decision to replace Hayward would not change its obligation to clean up the Gulf of Mexico and compensate victims.

In Washington, a key Democratic congressman called on BP to withhold any big payouts to the chief executive.

‘BP should be dedicating its resources to compensating the residents of the Gulf Coast who are the victims of this tragedy, not handing out multi-million-dollar golden parachutes,’ Representative Ed Markey said.

‘At a time when BP should be devoting every possible resource to ending the spill, cleaning up the Gulf and fully compensating the residents who have had their livelihoods impacted, I find it extremely troubling that BP’s board would consider providing such a large severance package to Mr Hayward,’ he added.

BP has already agreed to set up a $20 billion fund to pay for the Gulf clean-up and compensation, as it works to plug the BP well that ruptured in the April explosion and sinking of its leased Deepwater Horizon rig that killed 11 workers.

Coast Guard Admiral Thad Allen, who is leading the U.S. government’s response to the oil spill, said on Monday that efforts to kill the damaged well for good would not likely start before next week.

Originally expected as early as Tuesday, Allen said BP had given a ‘refined and revised’ timeline as it redeployed vessels and personnel following a recent storm in the region.

Even if BP then manages to kill the well, Allen warned there was ‘the possibility that shore will be impacted I guess for the next four to six weeks.’

The ruptured wellhead was sealed on July 15 with a giant cap, which for the first time in three months halted the flow of oil into the sea. But up to four million barrels of crude is already estimated to have spewed into the Gulf.

Toxic crude has washed up on the shores of all five US states on the Gulf Coast and vital tourism, fishing and oil industries in the region have been hit hard.

BP faces hundreds of pending lawsuits into the cause of the April 20 rig blast that should determine eventual liability.

It’s not yet clear what Hayward’s role will be with TNK-BP, but the job suggests BP still holds more faith in Hayward than much of the U.S. public and political establishment do.

Analysts consider the Russian venture one of BP’s crown jewels; it accounts for a quarter of the company’s production.

Repeated calls to TNK-BP‘s offices in Moscow went unanswered on Monday.
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