BP, SEEKING to restore investor confidence and rehabilitate its image, yesterday reorganised its management of the Gulf of Mexico oil spill, while its stock tumbled to a 13-year low.
The embattled British energy giant, struggling to overcome a number of PR gaffes by chief executive Tony Hayward, confirmed 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 US 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 yesterday.
The company said it had captured 25,830 barrels of oil from its ruptured deep-sea well on Monday, the highest amount yet. Between 35,000 and 60,000 barrels a day are gushing from the well, according to US government estimates.
The spill has dealt a severe blow to the US Gulf Coast’s tourism and fishing industries and affected large parts of a 650km coastline from Louisiana to Florida.
The disaster was triggered by an explosion aboard an offshore rig on April 20th that killed 11 workers and ruptured the well. It prompted the Obama administration to slap a six-month ban on deep-water drilling in the area. However, a US judge yesterday blocked the ban. The White House said it would appeal the judge’s ruling. More than a dozen oil services companies had gone to court on Monday to call for the ban to be lifted, arguing it was unnecessary and would lead to lay-offs in the work force that services oil rigs.
President Barack Obama had imposed the six-month moratorium while a presidential commission investigates the causes of the disaster. A co-chairman of the panel, William Reilly, said 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.
Mr Reilly said he would be wary of encouraging more deep-water drilling until oil companies come up with adequate plans for responding to a major offshore spill. “They are not realistic at this time,” he said.
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 analyse 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.”
