BP boss expected to quit but new payoff row looms

BP chief executive Tony Hayward is expected to quit imminently with a payoff of up to 18.5 million dollars despite being lambasted over the Gulf of Mexico oil spill, British media reported on monday.

world Updated: Jul 26, 2010 17:20 IST

BP chief executive Tony Hayward is expected to quit imminently with a payoff of up to 18.5 million dollars despite being lambasted over the Gulf of Mexico oil spill, British media reported on monday.

The size of the payoff, which must be agreed by a BP board meeting in London on Monday, risks sparking fresh controversy as the British based firm battles to rebuild its reputation after the worst environmental disaster in US history.

BP has insisted no final decision has yet been made on the future of Hayward, whose string of public relations gaffes during the crisis included telling reporters "I want my life back" and joining a yacht race.

"BP confirms that no final decision has been made on these matters," a spokesman for the energy giant said. "Any decisions will be announced as appropriate".

The company's share price was up over two percent at 407.05 pence on London's FTSE 100 on the news. The firm has lost about 40% of its stock market value since the spill.

Hayward has drawn criticism from US President Barack Obama who said he would have fired him and other senior figures in the US over his handling of the aftermath of the April 20 disaster which killed 11 workers.

But he could still get a pay off and pension package worth around 12 million pounds (14.4 million euros, 18.5 million$), The Times and the Financial Times newspapers reported.

He is expected to be replaced by Bob Dudley, who grew up in Mississippi and is now in charge of the Gulf of Mexico cleanup operation. BP has said Dudley has a "deep appreciation and affinity for the Gulf Coast".

A decision on Hayward's future is likely ahead of the release of BP's second quarter results on Tuesday which are expected to reveal a 30 billion$ provision for funding the disaster.

Hayward's reported payoff is the equivalent of one year's salary plus a guaranteed pension. Hayward, 53, started his career with BP 28 years ago and took over as chief executive in 2007.

In the Gulf of Mexico, the US government oil spill chief Thad Allen said BP's operation to plug the leaking well permanently had been delayed until the week beginning August 2.
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.

The leak was sealed 11 days ago with a giant cap, but up to four million barrels (170 million gallons) of crude has already spewed into the sea since the deadly rig explosion.
Toxic crude has washed up on the shores of 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, not to mention hearings into the cause of the April 20 rig blast that should determine eventual liability.

It is also facing additional controversy over claims, which he denies, that its lobbying helped secure the release of the Lockerbie bomber in order to secure a lucrative exploration deal with Libya.

The US Senate's Foreign Relations Committee will hold a hearing on thursday into the release of Libyan Abdelbaset Ali Mohment al Megrahi from a Scottish jail.

Megrahi, the only person convicted over the 1988 bombing of an airliner which killed 270 people, was freed by the Scottish government last year on compassionate grounds due to his terminal cancer.

British Prime Minister David Cameron has repeatedly argued that a "strong and stable" BP is in the interests of both the US and Britain.

And on Saturday, Foreign Secretary William Hague wrote to the Senate committee saying: "I believe we have a responsibility to address the unsubstantiated rumours that there was some sort of conspiracy involving BP which led to Mr Megrahi's release".

Hague said there had been "legitimate" contacts on at least five occasions between BP and senior British officials over a prisoner transfer agreement between Britain and Libya which was signed in 2008, but Megrahi was not released under this.

First Published: Jul 26, 2010 17:05 IST