LONDON BRIEFING:Meeting with Obama and appearance before energy committee will not reverse damage, writes FIONA WALSH
YOU WOULD have to have a heart of stone not to feel just the tiniest twinge of sympathy for Tony Hayward, as the BP boss faces what will surely be the most gruelling and crucial 48 hours of his career. Later today, just hours after Barack Obama delivers his televised address on the Deepwater Horizon oil disaster – his first from the Oval office – Hayward will meet the US president at the White House. Obama is, in his own words, still seeking an “ass to kick” over the environmental catastrophe and there’s little doubt whose backside he has in mind.
On Thursday, Hayward faces trial by congressional hearing, as he answers the summons from the House of Representatives’ influential energy and commerce subcommittee on oversight and investigations. For his meeting with Obama, Hayward will be accompanied by the BP chairman, Carl-Henric Svanberg, but tomorrow he will face his Capitol Hill inquisitors alone.
A taste of the hostility that will greet the man who has presided over the worst environmental disaster in US history came yesterday, when yet another congressional committee ripped into the bosses of “Big Oil”. The worst kicking was reserved for BP’s head of US operations, Lamar McKay, but rivals ExxonMobil, Shell, ConocoPhilips and Chevron all came in for severe criticism over their inadequate incident response plans.
Despite attempts to distance themselves from the BP disaster, the oil majors were shown to share virtually identical disaster plans – from the inclusion of the name and phone number of a marine life expert who died five years ago to the listing, among wildlife that might be affected by an oil spill, of walruses – a species not seen in the Gulf of Mexico for several million years.
Given the depth of anger felt not only in America but around the world at the sheer scale of the oil spill, there appears very little Hayward can do, either in his meeting with the president today or before Congress tomorrow, to repair his own or BP’s battered reputation. Hayward is already reviled by some as “the most hated man in America” and a flustered or evasive performance from him would make things even worse.
The only news the politicians want to hear is that the leak has been plugged, but there is no chance of Hayward delivering that tomorrow or indeed anytime soon. In the meantime, an angry America appears determined to extract as much as it can from BP and, as the demands ratchet up in scale, so the BP share price plunges.
Extraordinary figures are being touted around for the final clean-up and compensation bill – anything from $15 billion to $40 billion – and even the ultimate bankruptcy of one of Britain’s biggest and once most-respected companies.
There is a move to make BP pay as much as $20 billion into an escrow account, even though there can be no knowing at this stage how high the eventual bill will be. BP certainly maintains it will be nothing like as much and insists that it has sufficient resources to meet the costs.
BP’s dividend, worth $10 billion a year, has become another battleground. The next quarterly payout is due to be declared in July, but such is the political pressure, it looks almost certain that BP will be forced to suspend it. Such a move might go some way to appeasing the politicians, but it will be further bad news for its investors, not only in the UK but also in America, where almost 40 per cent of BP’s shares are held.
BP must clearly pay up, and the bill will be huge, of that there can be no doubt. But amid the backlash, some crazy claims are being made, not least that the company should foot the bill for oil industry workers who have been laid off because of the US government’s ban on offshore drilling in the Gulf.
The ban is hitting the Louisiana economy hard and the local politicians – no fans of BP - say it is akin to grounding every aircraft because of one crash.
For Hayward, the Deepwater disaster is a personal tragedy too, although in no way can it be compared to those who lost their lives or to those whose livelihoods are being devastated as the oil continues to swill ashore. As he prepares to meet Obama and to face Congress, Hayward must know that his career is effectively over. For the time being, he is at least fulfilling a useful role as the face of failure at BP.
Fiona Walsh writes for the Guardian newspaper in London
