BP’s account $32.2b in the red after oil spill

Oil giant BP plunged into the red for the first time in 18 years as it racked up a huge 32.2 billion US dollar (£20.8 billion) bill for the Gulf of Mexico spill.

BP, which also confirmed the departure of chief executive Tony Hayward, posted a loss of 17 billion dollars (£11 billion) for the April-June period following the Deepwater Horizon tragedy.

The firm is replacing Mr Hayward with US citizen Bob Dudley and also announced a shake-up of its portfolio including up to 30 billion dollars (£19.3 billion) in asset sales over the next 18 months.

Mr Hayward – who has committed a series of PR blunders since the crisis began – leaves with a pay-off of one year’s salary – £1.045 million – and an £11 million pension pot. He will step down on October 1 but remain on the BP board until the end of November and has been put forward as a non-executive director of the firm’s TNK-BP Russian joint venture.

BP chairman Carl-Henric Svanberg said the firm was “deeply saddened” to lose a chief executive whose success “was so widely and deservedly admired” but he added that the Deepwater Horizon explosion – which left 11 workers dead – had been a “watershed incident”.

Mr Hayward first joined the company in 1982 and has been chief executive since 2007. Before the spill he had been credited for reviving the fortunes of the oil giant.

He said: “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. BP will be a changed company as a result and it is right that it should embark on its next phase under new leadership.”

Mr Svanberg said the company’s estimate of the costs associated with the spill was based on BP’s belief that it was not guilty of gross negligence and he said the decision to part with Mr Hayward was a mutual one, taken because the company needed to rebuild its reputation.

Asked if the company’s investigations led it to believe it would not be found grossly negligent and would thus escape harsher penalties, Mr Svanberg replied: “That is our belief, yes.”

He defended Mr Hayward’s severance package, saying: “There is nothing in this package that is awarded as a result of his departure apart from the 12 months (salary). He has accumulated his pension like any other employee.”

Source: Press Association

Leave A Reply

Your email address will not be published.