BP Plc reported a record loss after taking a charge for the Gulf of Mexico oil spill, the worst in U.S. history.
The second-quarter net loss of $17.2 billion compared with a profit of $4.39 billion in the year-earlier period. Chief Executive Officer Tony Hayward resigned and Robert Dudley will succeed him on Oct. 1, the London-based company said in a statement today. The company will expand a programme of asset sales to as much as $30 billion over 18 months.
Dudley's challenge will be to overcome cleanup costs and liabilities from the environmental disaster, which analysts expect to exceed $30 billion. BP is selling assets, reducing investment and cutting the dividend to pay the bills after the spill wiped 45 billion pounds ($70 billion) off the company's market value.
"It's all about getting a clean slate," Peter Hitchens, an analyst at Panmure Gordon & Co. in London, said before the results were published. "They'll do the kitchen sink job to get it all out of the way at the start rather than a drip drip that will distract from future earnings."
The company reported a $32.2 billion pre-tax charge relating to the Gulf of Mexico oil spill.
Public Anger
Hayward faced public anger in the U.S. and criticism from lawmakers over his handling of the leak that was triggered by an April 20 explosion on the Deepwater Horizon rig, which killed 11 people. Dudley, 54, was born in New York and grew up in Mississippi, part of the Gulf Coast region suffering environmental and economic damage from the spill. BP on June 23 appointed him to manage its response to the leak.
"For the good of BP, especially in the U.S., it's the right thing to step down," Hayward said in a conference call with reporters today. He said BP mounted the world's largest ever response to a spill and capping the well proved no small engineering feat.
Source: Bloomberg.com
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