BP chief Hayward steps down after $17 billion quarterly loss

BP has confirmed chief executive Tony Hayward will step down in October as the group tries to rebuild itself in the wake of the spill in the Gulf of Mexico which pushed the group to a $17 billion (£11 billion) loss in the second quarter.

BP shares had a volatile start to the day as investors digested a flurry of statements from the company, including news Hayward will receive a year's salary in lieu of notice, amounting to £1 million and take up a role as a non-executive director at the group's Russian joint venture TNK-BP.

'Smart move'

Hayward's replacement Bob Dudley is American and it is hoped he will do a better job than his predecessor whose repeated PR gaffes added to the widespread anti-BP rage in the US.

Ahead of confirmation of the handover, Morgan Stanley analysts said: 'We believe the appointment of Dudley should be welcomed, particularly in the US. With a proven track record, notably the handling of the dispute over TNK-BP in Russia and significant experience in E&P, his CV ticks the right boxes.'

Others are nervous that Dudley's appointment will not go down well in Russia where Dudley left on bad terms with the BP's joint venture partners and suggest that is why Hayward has been asked to stay at the company and take a role at the Russian business.

Dougie Youngson, anayst at Arbuthnot, said keeping Hayward on board is 'a smart move.'

'It keeps his wealth of experience within the company, but also helps to mitigate what could have been a difficult situation with Bob Dudley dealing with the Russians. Tony Hayward has good relationships and this could help circumvent what could have been a difficult situation,' he said.

$32.2 billion (£20.8 billion) charge

But Dudley's first job will be to try and placate the US government amid allegations the oil giant group ignored safety rules and cut and pasted accident relief plans.

He said: 'I do not underestimate the nature of the task ahead, but the company is financially robust with an enviable portfolio of assets and professional teams that are among the best in the industry. I believe this combination - allied to clear, strategic direction - will put BP on the road to recovery.'

BP announced today that it has taken a pre-tax charge of $32.2 billion (£20.8 billion) for the Gulf of Mexico oil spill, including the $20 billion escrow compensation fund previously announced.

It said it has billed its partners in the well, Anadarko and Mitsui, for $1.4 billion and believes the money is contractually recoverable, with chairman Carl-Henric Svanberg saying BP was not grossly negligent in its operations at the Macondo well.

Because of the charge, BP's second quarter losses were $16.9 billion, compared with a profit of $3.1 billion a year ago. Half year losses were $11.3 billion compared with a profit of $5.5 billion a year ago.