BP boss retreats from spill, shares hit 13-year low

Click to enlarge photo

By Tom Bergin and Ross Colvin

LONDON/WASHINGTON (Reuters) - BP Plc, seeking to restore investor confidence and rehabilitate its image, reorganized its management of the Gulf of Mexico oil spill, while its stock tumbled to a 13-year low on Tuesday.

The embattled British energy giant, struggling to overcome a number of public relations gaffes by Chief Executive Tony Hayward, confirmed that managing director Bob Dudley would be taking over the company's day-to-day response to the spill.

The move came as shareholders continued to worry about how much BP will finally have to pay for cleaning up the worst oil spill in U.S. history. It already has paid out $2 billion and last week agreed to a $20 billion compensation fund, although this does not cap its total liabilities.

The 64-day-old disaster has shattered confidence in BP, which saw its London share price reach its lowest level since February 1997 on Tuesday, dropping more than 5 percent before coming off lows. The stock fell 2.11 percent in early trading in New York.

The company said on Tuesday it had captured 25,830 barrels (1,084,860 gallons/4,106,641 litres) of oil from its ruptured deepsea well on Monday, the highest amount yet. Between 35,000 and 60,000 barrels a day are gushing from the well, according to U.S. government estimates.

For full coverage http://link.reuters.com/hed87k

Insider TV http://link.reuters.com/jav43m

Graphics:

http://graphics.thomsonreuters.com/10/GulfOilSpill.html

Special Report: Wall Street touted BP http://static.reuters.com/resources/media/editorial/20100618/BPwallSt.pdf

The spill has dealt a severe blow to the U.S. Gulf Coast's tourism and fishing industries and affected large parts of a 400-mile (650 km) coastline from Louisiana to Florida.

The disaster was triggered by an explosion aboard an offshore rig on April 20 that killed 11 workers and ruptured the well. It prompted the Obama administration to slap a six-month ban on deepwater drilling in the Gulf of Mexico.

RULING BY WEDNESDAY

A U.S district court judge has promised to rule by Wednesday on whether to uphold the ban. More than a dozen oil services companies went to court on Monday to call for it to be lifted, arguing that it was unnecessary and would lead to layoffs in the work force that services offshore oil rigs.

President Barack Obama imposed the six-month moratorium while a presidential commission investigates the causes of the disaster.

A co-chairman of the panel, William Reilly, told the New York Times that the panel would not hold its first formal meeting until mid-July at the earliest, likely delaying delivery of its final report into next year.

Reilly said he would be wary of encouraging more deepwater drilling until oil companies come up with adequate plans for responding to a major offshore spill. "They are not realistic at this time," he told the newspaper.

But oil company executives attending an industry conference in London said a prolonged drilling ban could increase costs and threaten security of supply.

"Policy-makers, while rightfully focused on the tragedy, should analyze it in context as an isolated and likely preventable event," said Jay Pryor, global vice president business development at Chevron. "They should keep in mind that overall the industry has a good safety record and a good record for environmental protection."

LOWER PROFILE FOR HAYWARD

BP Chief of Staff Steve Westwell confirmed on Tuesday that Hayward would be "focusing on other activities" while Dudley's team "increasingly will be taking over responsibility for the incident."

Now managing director with responsibility for oversight of the Americas and Asia, Dudley is best known as head of BP's Russian joint venture TNK-BP from 2003 to 2008. He fled Russia, blaming harassment by TNK-BP's Russian billionaire co-owners.

Hayward has taken the brunt of the blame for his company's handling of the clean-up and has come under intense pressure from Obama, who is also facing public criticism that the federal relief effort has been slow and ineffective.

BP officials had insisted in recent days that Hayward would stay in the front line until the leaking well is plugged. BP says the well will be capped in August, when two relief wells now being drilled are due to be completed.

The Briton was lambasted at a U.S. congressional hearing last week for stonewalling lawmakers and for earlier gaffes in which he sought to play down the enormity of the spill.

The 53-year-old geologist also came under fire from the White House last weekend for attending a yacht race in Britain. His attendance was seen as tone-deaf to the crisis facing spill-hit Gulf Coast residents and businesses.

(Additional reporting by Raji Menon in London and Kristen Hays in Houston; Writing by Ross Colvin)