BP will give gaffe-prone CEO Tony Hayward a new post within the oil giant's Russian partnership as a way to appease Washington and dispel anger over the Gulf of Mexico spill, according to reports.
It's expected that the announcement will be made formally Tuesday in London as BP releases its second-quarter financial results. It is also expected that Hayward's departure as BP's chief will come in October.
Hayward has been heavily criticized since the April 20 oil spill in the Gulf of Mexico; first by U.S. politicians, and lately by company shareholders.
While BP has remained silent on his successor, analysts believe the company's managing director Bob Dudley, an American who is currently leading the oil spill response, is poised to take over as CEO.
The oil company released a statement Monday to say that "no final decision" has been made about any management changes.
"BP notes the press speculation over the weekend regarding potential changes to management and the charge for the costs of the Gulf of Mexico oil spill. BP confirms that no final decision has been made on these matters," the company said in a statement to the London Stock Exchange.
Hayward, 53, had become a lightning rod for outrage, particularly after he so famously declared that he was eager to resolve the incident "so that I can have my life back."
Taken in the context of Gulf residents' struggling to cope with the economic and environmental effects of the devastating spill -- and the families of the 11 people who died in the oil rig explosion -- his comments sparked vehement outrage.
Hayward only added to the anger when he tried to downplay the environmental impact of the spill. He was finally pulled from his duties overseeing the cleanup after he was seen attending a yacht race as crude was gushing from his company's oil well.
There is speculation that Hayward will walk away with a severance package worth about $18 million, thanks to 28 years working for BP. But London's Guardian newspaper reported Monday that Hayward will be nominated to the troika which runs the board of the TNK-BP partnership in Siberia.
BP believes that by sending Hayward eastward, it will defuse anger in Washington about the spill. It will also help the company, which is the fourth largest in the world, rebuild its image in the U.S.
The expected change comes as the New York Daily News called Hayward the "most hated -- and clueless -- man in America."
Ironically, Hayward's most-likely successor, Dudley, once held a top post at TNK-BP. However, Dudley was sent packing because of tension with Russian politicians.
Markets have responded favourably to the reports, with BP shares rising by five per cent Monday.
PR expert Allan Bonner said that dumping Hayward in the U.S. will help the company mend fences, but it won't change much else.
"A CEO can't change the laws of physics," he told CTV News Channel Monday afternoon from Toronto.
Bonner said he wasn't surprised that BP would find Hayward a new posting, since he's spent years with the company and "he feels and sounds like a lifer to me."
Plus, Bonner added that the oil industry is known for its tight-knit connections and the "enormous amounts of loyalty" between the game's major players.
"I think they have a tendency to protect one of their own. And I can understand that on a human level."
Bonner noted that Hayward's severance package is also business-as-usual for the oil industry, where executives are routinely paid multi-million dollar severance packages.
"To the people in the oil industry who sometimes get tens of millions or sometimes hundreds of millions as some of the Exxon people recently did … it's normal."
With reports from the Associated Press
