BP Chief Tony Hayward to Outline Strategy That Restores Firm's Fortunes
BP boss Tony Hayward will next week launch a fight back against the wave of criticism that has engulfed him and BP following the Gulf of Mexico oil spill. Hayward is set to outline a new corporate growth strategy in a bid to reassure shareholders and, at the same time, cement his position as chief executive.
His move comes as pension funds in New York and Ohio unveiled plans to sue BP for "securities fraud" as a result of the oil company's allegedly misleading comments on its ability to handle safety issues and deal with a major clean-up.
The strategy briefing in London on Tuesday will come alongside the release of second quarter profit figures which will show a strong year-on-year increase to about $5bn (£3.2bn). The result, however, will be dwarfed by an expected $20bn-plus estimate of liabilities emanating from the Deepwater Horizon disaster.
Hayward will argue that a slimmer more focused BP is still capable of bouncing back from the Gulf tragedy in which 11 workers were killed and the coastline scarred by saying the brand continues to be strongly respected elsewhere in the world.
He will outline recent new drilling deals to proceed in Egypt, Libya and Azerbaijan as proof that BP is still in great demand as a partner, especially in deep water areas where it was regarded as a leader.
The chief executive, who has taken a hail of personal criticism from politicians in Washington, will also give further details on $10bn of planned divestments including an agreement to dispose of $7bn of assets in the US, Canada and Egypt to Apache Corporation of America. BP has also earmarked gas fields and pipeline in Vietnam plus exploration licenses in Pakistan, for sale.
Hayward believes the time is now right for BP to move onto the front foot in the battle to win back the full support of investors and others after this week's successful operation to stem the leaking well with a containment cap. He plans to give an outline of future strategy next week but a more detailed version in the autumn.
A report in The Times claimed Hayward would leave within the next 10 weeks as a way of drawing a line under an incident – which BP's initial investigations suggest it might have made mistakes.
But the company officially denied any departures were imminent with a spokesman saying "Tony is leading the company in a strong and robust way and has the support of the board."
The vast body of critics are based in America where pension funds from Ohio and New York states announced plans to sue BP for losses to their funds since 20 April when the accident in the Gulf occurred.
"Institutional investors, and the Ohio Funds in particular, have been greatly harmed by BP's alleged misconduct. By forming a partnership between New York and Ohio, we aim to compensate investors for what we believe was securities fraud and effect real change in the way BP and other companies do business," said Ohio attorney general, Richard Cordray. His suit alleges that BP made misleading statements regarding safety protocols, and its ability to handle a major oil spill.
But governments outside of America – especially ones which oversee important deep water oil provinces, such as Brazil, Angola and Libya – seem keen that BP should survive rather than be brought to its knees by the US government actions or legal claims.
Earlier this week Egypt announced it was going ahead with a $9bn deal whereby BP and RWE of Germany would develop a deep water gas field in the Mediterranean and pipe the energy to land for processing. Equally BP and the state-owned Libyan Investment Corporation will start drilling in the Sirte Basin under a wider $900m exploration programme.
David Cameron said on Tuesday that he would review the circumstances over the release of Abdelbaset al-Megrahi, the Libyan-born Lockerbie bomber amid allegations in the US that BP unfairly influenced the decision.