BP's new CEO creates unit to enforce safety

 

By ROBERT BARR Associated Press Writer

Published: Wednesday, September 29, 2010 at 6:02 a.m.
Last Modified: Wednesday, September 29, 2010 at 6:02 a.m.

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BP's incoming chief executive on Wednesday announced a new unit to monitor safety throughout the oil company's operations, starting work to restore the company's battered reputation two days before officially becoming CEO.

Bob Dudley also announced that the was breaking up BP's exploration and production, or upstream, business into three divisions. Andy Inglis, the man now in charge of upstream, is leaving the company.

The new safety organization will be headed by Mark Bly, who led the team which produced BP's report on the causes of the disastrous blowout of the Macondo well in the Gulf of Mexico.

That blowout led to widespread scrutiny and criticism of BP's safety practices.

"This is a deeply challenging time for BP. The Macondo incident was a tragedy that claimed the lives of 11 people, caused injury to many others and had a widespread environmental impact," Dudley said in a message to BP staff.

"Our response to the incident needs to go beyond deepwater drilling. There are lessons for us relating to the way we operate, the way we organize our company and the way we manage risk."

BP shares jumped 2.8 percent higher to 416.8 pence following the announcement, but then retreated.

The Safety & Operation Risk unit will have the authority to intervene in all of BP's technical activities, the company said.

"It will have its own expert staff embedded in BP's operating units, including exploration projects and refineries. It will be responsible for ensuring that all operations are carried out to common standards, and for auditing compliance with those standards," the announcement said.

Bob Dudley also announced that the was breaking up BP's exploration and production, or upstream, business into three divisions. Andy Inglis, the man now in charge of upstream, is leaving the company.

The new safety organization will be headed by Mark Bly, who led the team which produced BP's report on the causes of the disastrous blowout of the Macondo well in the Gulf of Mexico.

That blowout led to widespread scrutiny and criticism of BP's safety practices.

"This is a deeply challenging time for BP. The Macondo incident was a tragedy that claimed the lives of 11 people, caused injury to many others and had a widespread environmental impact," Dudley said in a message to BP staff.

"Our response to the incident needs to go beyond deepwater drilling. There are lessons for us relating to the way we operate, the way we organize our company and the way we manage risk."

BP shares jumped 2.8 percent higher to 416.8 pence following the announcement, but then retreated.

The Safety & Operation Risk unit will have the authority to intervene in all of BP's technical activities, the company said.

"It will have its own expert staff embedded in BP's operating units, including exploration projects and refineries. It will be responsible for ensuring that all operations are carried out to common standards, and for auditing compliance with those standards," the announcement said.

Dudley, an American, was formerly in charge of BP's North American operations. He stepped up as the company's public face in the United States following a series of public relations blunders by Chief Executive Tony Hayward.

"As I take up my new role I am aware of two things," Dudley told the staff.

"First, there is a pressing need to rebuild trust in BP around the world. Second, BP's people have both the commitment and the capability to rebuild that trust."

Dudley announced that Inglis would step down as head of the upstream division, leaving the board on Oct. 31 and the company by the end of the year.

The new upstream organization is to be led by three executive vice presidents: Mike Daly at Exploration, Bernard Looney for Development and Bob Fryar for Production.

They will work with Andy Hopwood, who becomes executive vice president for strategy and integration in a management team reporting to Dudley.

Dudley said he was not setting out to change everything at BP.

"We have great strengths that are important to maintain," he said.

"We have a high quality portfolio of assets. We have a sound financial footing on which to build. We have good technology... Most importantly, we have great people."