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BP CEO Hayward tested by Gulf of Mexico spill

Tony Hayward promised to focus "like a laser" on safety when he landed BP's top job three years ago. Those words may come back to haunt him.
Tony Hayward
As BP Chief Executive Officer Tony Hayward finds himself dealing with what is likely to become the largest oil spill in history, his promise to focus on safety "like a laser" may well come back to haunt him.Pablo Martinez Monsivais / ASSOCIATED PRESS
/ Source: The Associated Press

Tony Hayward promised to focus "like a laser" on safety when he landed BP's top job three years ago, heralding a new era for the company after a series of accidents — including the 2005 Texas City refinery explosion that killed 15 people.

But the baby-faced geologist may find his words will come back to haunt him.

Promoted precisely to restore BP's tarnished reputation, Hayward now finds himself dealing with the company's biggest disaster yet. His handling of the Gulf of Mexico crisis — and investigations into how the London-based company let it happen — could determine his future, and that of the oil giant.

The 52-year-old CEO and company "lifer" has flown out to Louisiana to personally head up the damage limitation exercise, declaring in the wake of criticism from President Barack Obama that his company was "absolutely responsible" for the spill.

He has made a string of U.S. TV appearances in a bid to tame the backlash against Britain's second biggest company, promising the public that BP will do all it can to limit the damage from an accident that threatens the shores of five states.

His response to CNN when asked about his initial reaction to the explosion of the Deepwater Horizon rig that caused the oil spill and killed 11 workers — "How the hell could this happen?" — was characteristic of his straightforward, down-to-earth nature. But it is also a question being asked by many critics of both the company and its leader.

"Hayward may have personally done much to turn around the fortunes of a company accused of putting profits before safety after a blast at a Texas oil refinery. But he evidently had not done enough," the Guardian newspaper wrote in an editorial on Tuesday.

Lobbying against tighter rules
The company has remained at the forefront of lobbying against a tighter regulatory framework in the United States, advocating voluntary compliance instead.

As well as suggestions that Hayward underestimated the risk involved with drilling at the Deepwater rig, he has also been accused of a slow reaction to the disaster after initially failing to take on board its extent.

Hayward countered those criticisms — somewhat belatedly in the eyes of some — by arranging for an "armada" of ships and a "small airforce" of aircraft to try stop the slick from reaching the shore. He also sent 2,500 BP staffers to fight the fallout, both onshore and off.

Chris Skrebowski, director of Peak Oil Consulting and consulting editor at Petroleum Review, said that Hayward has "done pretty well. He's surprised most people by being more effective than they expected him to be.

"It's quite a hard balancing act to come over as suitably concerned without looking as though you've lost control, and equally not to look complacent about what is a threat to people's livelihoods," Skrebowski added.

Hayward was promoted to the chief executive's chair in May 2007, replacing former boss and mentor John Browne more than a year earlier than initially envisioned under the company's succession plan.

Browne was anointed the Sun King — a reference to the company's blazing solar emblem — for taking the company from minor player to global energy giant in his 12 years at the helm and moving "beyond petroleum," to other, greener energy sources.

But he ended his tenure in ignominy, irrevocably tarnished by events including the Texas City explosion and a major Alaska pipeline spill in 2006. He fell further from grace after admitting to perjury while giving evidence to a court to prevent a newspaper revealing details of his private life.

Hayward, then the head of exploration and production, was chosen from a shortlist of potential successors, all internal candidates.

The eldest son of a family of seven, Hayward had a far less privileged upbringing than his privately educated predecessor. He worked his way through the ranks after joining BP in 1982 as a rig geologist in Aberdeen, Scotland, immediately after graduating with a geology degree from Birmingham University and a PhD from Edinburgh University.

Potential protege
Spotted by Browne as a potential protege at a meeting in 1990, he was groomed from being a smart geologist to boardroom-ready executive. He then moved through a range of positions at the company, including president of BP's operations in Venezuela and group treasurer.

Hayward was instrumental in BP's expansion into the United States, which involved a number of takeovers, including the 1998 merger with Amoco and the subsequent acquisitions of Arco and Castrol.

Peter Sutherland, the former BP chairman who chose Hayward to lead the company in 2007, has stood by his man, saying last week that he has "been a superb chief executive by common consent, in terms of internal and external perception. That doesn't change because of this accident."

As BP's share price and reputation continues takes a battering — wiping more than $23 billion off the value of the company in a week — external watchers say the jury is still out.

"There are still considerable uncertainties over the impact of this oil spill, as much will depend on how quickly the company is able to bring this well under control and how the winds will drive this spill," Peter Hitchens, an oil industry analyst at Panmure Gordon, said in a research note Wednesday.