BP Plans to Replace CEO Tony "Wayward" Hayward with American

BP is expected to replace its CEO and walking public-relations nightmare, Tony Hayward, with American Robert Dudley, who grew up in Mississippi and has quickly gained a reputation for competency and credibility as head of BP's oil-spill cleanup operation in the Gulf of Mexico.

Hayward won't walk away empty-handed. Among top corporate executives, even failure has its rewards. Hayward (nicknamed "Wayward Hayward" by environmentalists and the media because of his frequent PR gaffes) is reported to be negotiating with BP's board of directors for a severance package that could be worth up to $18.5 million. Other news agencies are reporting that Hayward may be assigned to another BP venture in Russia.

In its official response to media queries, BP is saying that Hayward is still CEO, but the company is expected to confirm Hayward's departure on Tuesday, either in conjunction with the announcement of its second-quarter earnings. On Monday, rumors of Hayward's pending resignation resulted in a 4.6 percent increase in the price of BP shares, which have lost 40 percent of their value in the three months since the oil spill began. On Tuesday, BP is expected to report a $13 billion loss as the company starts to factor in the cost of the oil spill that, according to current estimates, could be as high as $30 billion.

The oil had hardly started flowing from the ruptured underwater well in late April before Hayward started saying and doing things that made him a lightning rod for public and political animosity over the disastrous oil spill and turning him into "the most hated man in America."

It was bad enough when Hayward said in media interviews that the oil spill was "relatively tiny" compared to the "very big ocean" and that environmental damage from the spill would be "very, very modest."

"The Gulf of Mexico is a very big ocean," Hayward said in a May 14 interview with The Guardian. "The amount of volume of oil and dispersant we are putting into it is tiny in relation to the total water volume." That quote came back to haunt Hayward repeatedly as official estimates for the amount of oil flowing into the Gulf were repeatedly challenged and revised upward and BP kept failing to stop the leak.

And in a May 18 interview with Sky News, Hayward said, ". . . everything we can see at the moment suggests that the overall environmental impact will be very, very modest." That statement now seems either laughably naïve or like a sinister and cynical attempt to downplay the growing disaster.

But Hayward's worst misstep came about two weeks later, on May 30, when he told a group of reporters in Louisiana that "there's no one who wants this over more than I do. I'd like my life back." Hayward made the comment as part of an apology to Gulf residents whose lives and livelihoods have been disrupted by the oil spill, but the comment immediately brought to mind for many people the 11 workers who permanently lost their lives when the Deepwater Horizon offshore oil rig exploded and caught fire on April 20.

On June 19, about two months after the oil spill began and with oil still gushing into the Gulf, Hayward continued his series of PR gaffes by taking part in yacht race around the Isle of Wight--on "Bob," his $270,000 racing yacht--which prompted Emanuel Rahm, President Obama's chief of staff, to observe, "I think we can all conclude that Tony Hayward is not going to have a second career in PR consulting." BP defended Hayward's decision, saying that it was his first day off with his family since the oil spill began, but many Gulf Coast residents were angered by Hayward's apparent lack of concern for their plight.

"Man, that ain't right," said Bobby Pitre, 33, a small-business owner in Louisiana in an interview with ABC News. "None of us can even go out fishing, and he's at the yacht races. I wish we could get a day off from the oil, too."

If BP chooses Dudley to replace Hayward, it would be an historic move--the first time a non-British citizen, let alone an American, has led the giant energy company formerly known as British Petroleum. It could also be a smart move, because a third of BP's revenues come from its U.S. operations, and 40 percent of its shareholders are Americans.

Dudley, 54, is a chemical engineer by training. He joined Amoco in 1979 and joined BP in 1998 when it acquired Amoco. Most observers see Dudley as a genuine leader with a track record of solid performance untainted by BP's questionable safety record.

"He is basically a guy with a clean slate," said Fadel Gheit, a veteran oil analyst at Oppenheimer & Company, in an interview with The New York Times.

Whether Dudley can keep his slate clean if he accepts the top spot at BP, or reverse the fortunes of his beleaguered company, remains to be seen.

_{Photo of Tony Hayward by Win McNamee/Getty Images}

Also Read:

• BP Stops Oil Leak, Starts Critical Test
• BP Aims to Stop Leaking Oil Well and Falling Stock Price by July 27
• 10 Things You Need to Know About the Deepwater Horizon Oil Spill
• The 10 Worst Oil Spills in History
• How Do Oil Spills Damage the Environment?