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July 27, 2010

BP dumps Tony Hayward

To nobody's great surprise, BP has announced that "by mutual agreement with the BP board, Tony Hayward is to step down as group chief executive with effect from October 1, 2010."

Mr. Hayward's handling of public and congressional relations following the Deepwater Horizon disaster has been widely seen as inept at best. He has also been criticized for not doing enough to change the corporate safety culture he inherited from his predecessor, Lord Browne.

Mr. Hayward will remain on the BP board until November 30, 2010. BP also plans to nominate him as a non-executive director of TNK-BP - its joint venture in Russia whose major producing assets are located in West Siberia, the Volga-Urals and East Siberia.

Separately, BP announced a second quarter loss of $17.15 billion and said it has taken a pre-tax charge of $32.2 billion for the Gulf of Mexico oil spill, including the $20 billion escrow compensation fund previously announced. It plans to sell assets for up to $30 billion over the next 18 months, primarily in the upstream business, and selected on the basis that they are worth more to other companies than to BP.

Mr. Hayward will be succeeded by Robert Dudley.

BP chairman Carl-Henric Svanberg said: "We are highly fortunate to have a successor of the caliber of Bob Dudley who has spent his working life in the oil industry both in the U.S. and overseas and has proved himself a robust operator in the toughest circumstances."

Mr. Dudley (54) is a main board director of BP and currently runs the recently-established unit responsible for clean-up operations and compensation programs in the Gulf of Mexico. He joined BP from Amoco after the merger of the two companies in 1998. He was president and CEO of TNK-BP, until 2008.

On his appointment, Mr. Dudley will be based in London and will hand over his present duties in the U.S. to Lamar McKay, chairman and president of BP America. "In this change of roles, I particularly want the people of the Gulf Coast to know that my commitment to remediation and restitution in the region is not lessened. I gave a promise to make it right and I will keep that promise," he said.

BP said that under the terms of his contract Mr. Hayward would receive a year's salary in lieu of notice, amounting to UKP 1.045 million.


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