Robert Dudley to replace BP CEO Tony Hayward as oil giant reports $17 billion loss

July 27th, 2010 - 8:25 pm ICT by BNO News  

LONDON (BNO NEWS) — U.K. oil giant BP on Tuesday announced that embattled CEO Tony Hayward will step down by “mutual agreement” as the company’s chief executive on October 1 after reporting a record loss of $17 billion related to its response to the Gulf of Mexico oil spill.

Hayward, who will be nominated for a non-executive director at BP’s Russian venture TNK-BP, will be replaced by Robert Dudley, who currently serves as the President and CEO of BP’s Gulf Coast Restoration organization in the United States.

BP chairman Carl-Henric Svanberg said the board was “deeply saddened to lose” Hayward, stating that the company “remains a strong business with fine assets, excellent people and a vital role to play in meeting the world’s energy needs.”

“BP will be a changed company as a result of [the Gulf of Mexico spill] and it is right that it should embark on its next phase under new leadership,” Hayward said.

Dudley, who is 54 and has two children, joined BP from Amoco Corporation after the merger of the two companies in 1998. He was president and CEO of BP’s Russian joint venture, TNK-BP, until 2008.

Meanwhile, BP announced a loss of $17 billion for the period from April to June of 2010, with Q2 underlying replacement cost profit at $5 billion compared to $2.9 billion in Q2 of 2009. In the same period, the operating cash flow, excluding Gulf of Mexico oil spill costs, was $8.9 billion, up 31 percent compared with the same quarter last year.

The company also announced that it has taken a pre-tax charge of $32.2 billion for the Gulf of Mexico oil spill, including costs to date of $2.9 billion for the response and a charge of $29.3 billion for future costs, including the funding of the $20 billion escrow fund.

Hayward said the company is expecting to pay the majority of the remaining direct spill response costs “by the end of the year,” but other costs, including any fines and penalties, “are likely to be spread over a number of years.”

The company plans to sell assets for up to $30 billion over the next 18 months, primarily in the upstream business, but announced that new agreements in Azerbaijan, Egypt, China and Indonesia will create new new business opportunities.

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