The announcements on Tuesday came as BP reported one of the largest losses in British corporate history, losing $17bn after tax in the second quarter after a $32.2bn pre-tax provision to pay for cleaning up the spill and compensating its victims.
Mr Hayward is to be replaced on October 1 by Bob Dudley, the 54-year-old American managing director who has been running the company’s response to the spill in the US.
Carl-Henric Svanberg, BP’s chairman, said in a statement: “The BP board is deeply saddened to lose a CEO whose success over some three years in driving the performance of the company was so widely and deservedly admired.”
Mr Hayward said: “The Gulf of Mexico explosion was a terrible tragedy for which – as the man in charge of BP when it happened – I will always feel a deep responsibility, regardless of where blame is ultimately found to lie.”
He added: “I believe the decision I have reached with the board to step down is consistent with the responsibility BP has shown throughout these terrible events. BP will be a changed company as a result of Macondo [its damaged oil well in the Gulf of Mexico] and it is right that it should embark on its next phase under new leadership.”
The
company’s underlying performance, excluding the spill, was
strong in the second quarter, with profits of $5bn and operating
cash flow of $8.9bn, up 31 per cent from the equivalent period
of 2009.
BP described its $30bn disposal plan – a further acceleration of a programme that it launched with a target of $10bn – as “portfolio high-grading” to “leave the company with a smaller but higher quality exploration and production business”.
It plans to sell mature oil and gas fields, which can be worth more to smaller companies that specialise in managing those assets, leaving BP with fields that it believes have potential for growth.
It recently announced a deal to sell assets in North America and Egypt for $7bn to Apache of the US, raising more than 6 per cent of its market capitalisation by selling 2 per cent of its reserves.
Interactive timeline: BP oil spill
FT graphic: timeline charting events since the accident, estimates of oil leaking into the ocean, and clean-up costs for America’s worst environmental disaster
The proceeds of its disposals will be used to meet spill costs, including the $20bn fund agreed with the US administration in June, and to reduce BP’s borrowings to give it “the flexibility to meet all of its future financial obligations”. The company aims to cut net debt to $10bn-$15bn in the next 18 months, down from $23bn at the end of last year.
It has lined up “substantial additional bank borrowing facilities, all of which remain undrawn”, it said. It has also cut capital spending to a planned $18bn a year for 2010 and 2011, down from a previously planned $20bn, and has cancelled the payment of further dividends this year.
Mr Svanberg said: “Our shareholders have not received any dividends since the spill occurred. As we said last month, the board remains strongly committed to the payment of future dividends and delivering long-term value to shareholders. The board will consider its position on future dividend payments at the time of issuance of the fourth quarter 2010 results in February 2011.”
Lombard
Andrew Hill: Hayward can contribute to rebuilding his reputation
Mr Hayward will remain on BP’s board until November 30, and will be nominated as a director of TNK-BP, the company’s Russian joint venture. He will be able to take his pension when he is 55, in two years’ time, and is also taking a year’s salary of £1.045m. His pension pot was worth £10.8m at the end of last year.
The provision for spill costs can be written off against tax, meaning that BP will save $10bn in tax payments, leaving the net cost at $22bn.
Jason Kenney, an oil analyst at ING, said that figure was slightly smaller than he had expected and well below some observers’ “Doomsday scenarios” of $50bn-plus.
Shares in BP were 3.3 per cent lower at 403.1p in afternoon London trading, underperforming the FTSE 100.