BP Oil Disaster: Who is Responsible?
The Daily Beast examines disgraced BP CEO Tony Hayward and five other key players—and their role in "the worst environmental disaster America has ever faced."
After being grilled by Congressional Democrats on Thursday, BP's chief executive Tony Hayward is relinquishing his role as the head of day-to-day oil-spill operations and handing over the baton to Robert Dudley, the company's managing director since 2009. BP's chairman Carl-Henric Svanberg told Sky News, "It is clear Tony has made remarks that have upset people," adding that he will play a more visible role in managing fallout from the Gulf oil-rig disaster. "This has now turned into a reputation matter, a financial squeeze for BP, and a political matter and that is why you will now see more of me," he said. Svanberg admitted that BP had planned for Hayward to be the principal voice for the company, but that political circumstances had changed all that: "As this is now turning to a different type of crisis, that is where I come in."
The Daily Beast examines Hayward and five other key players and their role in “ the worst environmental disaster America has ever faced.”
BP CEO Tony Hayward got his job as the oil giant was still dealing with a criminal investigation into disaster—its Texas refinery exploded in 2005, killing 15 people. (His predecessor—who had long groomed Hayward as a successor—abruptly resigned amid unrelated legal trouble.) “It has obviously been a pretty challenging couple of years at BP,” Hayward told the Houston Chronicle. “You earn your reputation through performance, through being clear about what you're going to do and then doing it.” After the Deepwater Horizon rig exploded April 20, Hayward made himself the face of BP in America, starring in a $50 million ad campaign in which he promises to “make this right.” But some PR experts have said Hayward’s public role was a mistake, as his natural British accent is a reminder that BP is not an American company. And the exec made unforced errors, too, as when he said he wanted to stop the spill so he could “get my life back” and that the company was “not prepared” for the spill. Many are speculating the CEO will lose his job. Even President Obama said he would have canned the guy. Wednesday, Obama met with Hayward and BP chair Carl-Henric Svanberg, and Thursday Hayward endured an hours-long grilling by Congress. He was then relieved of his day-to-day duties in the Gulf. (He’s still CEO, though.) Svanberg said Hayward’s handling of the crisis had been disastrous for BP’s stock value—and its reputation.
Robert Dudley, Managing Director
Hayward’s replacement managing the oil spill is Robert Dudley, who was appointed two weeks ago to lead a separate organization to manage the company’s long-term cleanup work in the Gulf. Picking Dudley, BP’s managing director, was a smart choice, The Wall Street Journal says, because Dudley’s career has been marked by one of the fiercest corporate battles in recent history: fighting for control of the joint venture TNK-BP with Russian oligarchs. Dudley’s task is nearly inhuman—BP’s reputation is destroyed and faces a backlash from government and all kinds of organizations—but he’s probably the best man for the task. The exec is a soft-spoken American (none of Hayward’s pesky accent problems), born in New York and raised in Mississippi, with a rock-solid resume. (One failure: as CEO of BP’s joint Russian venture, though he greatly increased revenue, he lost the shareholder battle and was forced to flee the country when his visa was not renewed.) Dudley, 54, is widely respected within the oil industry and considered a possible successor to Hayward. But is subbing him in for the embattled CEO anything more than a cosmetic change? Dudley was behind the failed “top kill” attempt to plug the leak; on the other hand, he’s proven to be much more careful with his words than Hayward.
Lamar McKay, BP America chief
McKay was tapped to head up BP America just a year ago. Since the oil rig’s explosion, he’s spent some quality time with lawmakers, making several trips to Capitol Hill to face hostile questioning. McKay is controversial: He’s steadfastly insisted that his company would pay "all legitimate claims" resulting from the oil spill (critics bristle at the qualifier “legitimate,” taking it as a sign BP wants to get out of paying what it owes), but that it’s “inappropriate to draw any conclusions before all the facts are known.” He blamed Transocean for not keeping the rig safe; when asked in a hearing whether BP had a financial stake in underestimating the amount of oil spilling into the Gulf, he said “I don’t know.” McKay again graced the hot seat this week, when he testified before the House—next to four executives from rival oil companies. BP’s competitors were eager to distance themselves from the disaster, saying they follow proper safety procedures. In remarks that are unlikely to mollify critics, McKay insisted his company has been " pretty effective" in its response; denied BP was responsible for lowball estimates of the amount of oil spilling, and warned that the American economy depends on domestic energy production, so limiting it would cost many jobs. With the spill predicted to last till August, it seems likely McKay’s days of congressional grilling are not yet behind him.
Carl-Henric Svanberg, Chairman
"It is clear Tony has made remarks that have upset people," BP chair Carl-Henric Svanberg said, explaining his decision to remove Tony Hayward as the company’s point man in the Gulf. "This has now turned into a reputation matter, a financial squeeze for BP and a political matter and that is why you will now see more of me.” So who is Svanberg? Born in a tiny village inside the Arctic Circle, he gained huge fame in Sweden as a highly successful CEO of Ericsson, yet he remained publicity shy. Svanberg has stuck to that instinct as the company he chairs reels from the largest oil spill ever to hit the U.S., to the point that the Financial Times described him as “lower-profile than an agoraphobic prairie dog.” But like it or not, his face is in the newspapers now, thanks to a three-hour meeting with Obama followed by an awful flub in his press conference. (Svanberg swore his company cares about “the small people.”) It now looks like it was mere self-preservation instincts that led him to steadfastly avoid the press, as he did those from Sweden’s biggest newspaper, Aftonbladet, which tracked him down last week but mostly extracted variations on “I have nothing to say” from the BP chair. Svanberg has a reputation for steering corporations through tough times: He brought Ericsson back from massive losses by restructuring and cutting costs, including thousands of jobs. The company returned to huge profitability. Despite lacking oil industry experience, BP’s board chose him for the post—which he assumed only in January—because they thought he’d be a good leader who’d drive shareholder value. Svanberg “is comfortable in his own skin and has nothing left to prove,” a board member said at the time. Perhaps he has a bit to prove now.
Iain Conn, Refining and Marketing Chief Executive
If BP does decide to replace CEO Tony Hayward (one bookmaker puts the odds at 3-1), Conn is a contender: known for his loyalty in his 24 years with BP, praising Hayward’s “ extremely robust” leadership, taking on some of Hayward’s duties in London as the CEO got sucked into the crisis in America. Since being appointed to his current role in June 2007, the 47-year-old Scotsman has worked on improving the company’s safety procedures in the wake of the 2005 Texas refinery explosion. That could be the kind of experience BP’s board may look out for if it needs a fresh face to lead the company out of this crisis.
Andy Inglis, Exploration and Production Chief Executive
The 50-year-old currently heads up BP’s exploration and production, the job Hayward had before he was tapped to be CEO. Having been with the company since 1980, Inglis has been seen as a potential next CEO, but he might be tainted by the oil spill happening on his watch. Furthermore, he’s played a key role in pushing for BP’s investment into deepwater drilling technology. Under Inglis’ direction, BP has made major discoveries of oil fields in the Gulf of Mexico, and only in April was the man behind BP’s $7 billion acquisition of fields deep underwater in Brazil and the Caspian Sea.