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Facing deep financial turmoil and a shredded reputation, BP on Tuesday appointed a non-Briton as chief executive for the first time, the maiden step on an uncertain road to redemption in the United States.

BP executives issued a statement in London appointing American Robert Dudley to run the company, ending more than 100 years of British leadership.

For months the writing has been on the wall for the outgoing boss Tony Hayward, who came to symbolize the company's missteps in handling the disaster.

Insensitive comments about effects of the spill and Hayward wanting "my life back," an ill-timed yacht race, and the thumbs down from US President Barack Obama seemed to make the 53-year-old's position untenable.

And so it appears to be. BP's embattled chief executive will reportedly be demoted to help run the firm's sizable Russian joint venture.

At a time when BP is battling to clean up the worst oil disaster in US history, the nationality of his heir-in-waiting has not gone unnoticed.

"In the big scheme of things it really doesn't matter where your CEO comes from," said Roger Reid, a senior energy analyst with Natixis Securities.

"But in today's particular set of circumstances for BP, with such a headache in their US operations, there might be a political argument for having someone who understands more about the concerns here."

For Dudley, there will doubtless be some perks to taking the job aside from having broken a glass ceiling at one of Britain's most venerable firms.

He earned around 2.2 million dollars last year, compared to his predecessor's 3.2 million.

But he faces a long and difficult task to rebuild BP's image in a market that has become as vital to the company as its long-standing operations in the Middle East or Europe.

Since BP -- then British Petroleum -- prospected for Alaskan oil in the late 1950s, the company's fate has become ever-more tied with the United States.

Around 40 percent of BP's assets are in the United States and the company claims to be the biggest oil and gas producer in the country.

Last year BP produced 665,000 barrels of crude a day in the United States. Only its operations in Russia were more productive.

The volume of oil treated at BP's US refineries eclipses all other regions combined and make up more than half the company's total throughput.

But the White House has been quick to point out that a change in leadership will not be enough.

"What is clear is BP cannot and should not and will not leave the Gulf without meeting its responsibility to plug the well, to clean up the damage that has been caused, and compensate those that have been damaged," spokesman Robert Gibbs said Monday.

Congress also pitched in, lest Dudley have any illusions about the scale of the clean-up operation ahead of him.

"While it's now happy sailing for Tony Hayward, rough conditions will persist in the Gulf of Mexico for years to come because of his failed leadership," said Congressman Edward Markey.

"The new leaders of BP will have an uphill climb to correct the legacy left by Hayward, indelibly inked by the disaster in the Gulf."

Not that Dudley is unused to political challenges. As the head of a BP joint venture in Russia he scraped with officials and eventually had his visa revoked.

Having been raised in the Gulf Coast state of Mississippi, he will be in a better position than most to mend ties with the local authorities -- and the communities shattered by the disaster.

His task is made all the harder because many of BP's American operations hinge on the type of deep-water drilling that has been called into question with the explosion of the Gulf of Mexico well.

According to Natixis's Reid, Dudley's most important contribution might not be his nationality, but what he can do to improve BP's risk management.

The company has been involved in a series of US controversies, from a leaking Alaskan pipeline to an explosion at a Texas facility to a propane trading scandal.

"Given the litany of problems across BP's operations in the US... you have to step back and ask yourself, is this company that snake bit?" Reid said.

Against this background of apparent cost-cutting, "there is a legitimate risk that either the Congress or the regulators could single out BP for not being able to get an operation license on a lease, or not being able to acquire leases for a period of time," he added.

Story from AFP
AFP 07/27/2010

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