CAN A NEW LEADER FIX BP?

De­spite chal­lenge, ex­perts in­di­cate faith in new leader

Austin American-Statesman - - FRONT PAGE - By Steven Muf­son

For a London-based petroleum com­pany that re­lies largely on oil pro­duced in the United States and Rus­sia, Robert Dud­ley might be just the ticket.

BP’s board is ex­pected to an­nounce early to­day that it has picked Dud­ley — who grew up in Hat­ties­burg, Miss., and later spent eight years work­ing in Rus­sia — to be­come the com­pany’s chief ex­ec­u­tive, cut­ting short the tur­bu­lent ten­ure of Bri­tish ge­ol­o­gist Tony Hay­ward, who has been caught in the vor­tex of U.S. pub­lic anger over the Gulf of Mex­ico oil spill.

The choice of the even-keeled Dud­ley, who would be­come the first Amer­i­can to run the com­pany for­merly known as Bri­tish Petroleum, would rep­re­sent a fresh start for a firm that has been soiled by the mas­sive spill.

“It turns a new page, and it starts to look to the fu­ture,” said Daniel Yer­gin, chair­man of IHS Cam­bridge En­ergy Re­search As­so­ci­ates. “I think Bob has both the tech­ni­cal com­pe­tence and a broad view of the in­dus­try and where it fits into the world.”

The mere prospect of Dud­ley be­com­ing BP’s chief ex­ec­u­tive marks a cul­tural shift for a cor­po­rate go­liath that suf­fered from iden­tity is­sues ever since it acquired three big U.S. oil firms — Amoco, Arco and Sohio — more than a decade ago. Al­though Bri­tish BP chiefs had shut­tled back and forth by plane from their St. James Square head­quar­ters in London to their U.S. em­pire, the cul­tural gulf proved too big.

And af­ter the April 20 drilling rig ex­plo­sion killed 11 work­ers and set off the mas­sive oil spill, Hay­ward struck sev­eral wrong notes with an an­gry Amer­i­can pub­lic. On Mon­day, Florida At­tor­ney Gen­eral Bill McCol­lum said that through­out the spill, Hay­ward “has ap­peared disin­gen­u­ous, dis­in­ter­ested, and of­ten dis­mis­sive of what our state, our busi­nesses and our res­i­dents are suf­fer­ing.”

In some ways, pick­ing Dud­ley is like reach­ing back to the past to move into the fu­ture. He worked for Amoco (for­merly known as Stan­dard Oil Co. of In­di­ana) for nearly 20 years in the United States, Bri­tain and Rus­sia. When BP bought the com­pany in 1998, Dud­ley, then Amoco’s gen­eral man­ager for strat­egy, made the leap to BP.

His U.S. back­ground might prove an as­set to him and the com­pany. Forty per­cent of BP’s share­hold­ers live in the U.S., and BP is the largest pro­ducer of oil in this nation. With Congress con­tem­plat­ing a ban on BP op­er­at­ing on fed­eral lands, and with the Jus­tice Depart­ment weigh­ing crim­i­nal charges in con­nec­tion with the rig blowout, Dud­ley’s back­ground and tem­per­a­ment could help BP nav­i­gate U.S. po­lit­i­cal wa­ters and pro­tect the com­pany’s abil­ity to do busi­ness here.

“BP has two vul­ner­a­bil­i­ties, po­lit­i­cal and le­gal,” said Robin West, chair­man of PFC En­ergy, a Washington con­sult­ing firm. “The po­lit­i­cal vul­ner­a­bil­ity is that Congress wants to pun­ish BP.”

Dud­ley also has ex­pe­ri­ence around the world. While at Amoco, he ne­go­ti­ated projects in the South China Sea and in Rus­sia. At BP, he fit in well. He played a key role in po­lit­i­cally sen­si­tive ne­go­ti­a­tions over the con­struc­tion of a pipe­line in Azer­bai­jan. Later, he ran BP’s TNK-BP joint ven­ture in Moscow and helped over­see im­prove­ments in safety, ac­count­ing and drilling prac­tices in old Soviet fields. His five-year stint ended in dis­cord with BP’s Rus­sian bil­lion­aire part­ners; af­ter be­ing de­nied a visa, Dud­ley ran op­er­a­tions from abroad un­til an ac­cord was reached on a suc­ces­sor.

“He has a demon­strated an abil­ity to op­er­ate suc­cess­fully un­der pres­sure,” West said. “This is a guy who has re­ally been bat­tle-tested twice.”

Peo­ple who know and work with Dud­ley say he has weath- ered past bat­tles calmly.

But Dud­ley faces a gar­gan­tuan chal­lenge. BP is fight­ing for its sur­vival while try­ing, in Hay­ward’s phrase, to “make things right” in the Gulf.

Ger­ald Her­bert

Ef­forts to solidly seal BP’s busted deep-sea well are sched­uled to be­gin in a week, the govern­ment’s oil spill chief, re­tired Coast Guard Adm. Thad Allen, said in Washington on Mon­day.

Tony Hay­ward will be re­as­signed to key job in Rus­sia, source says.

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