BP ‘Smoothes the Way’ for Hayward
By Sam Fleming, Daily Mail, London
Feb. 7–BP has been accused of carrying out a “kitchen sink” exercise to smooth the way for the accession of Lord Browne’s annointed successor, Tony Hayward.
Unveiling its sixth consecutive slide in oil output, BP dramatically pared back its production forecasts for the coming years.
Analysts said this will make it much easier for Hayward to beat his own estimates after he takes the helm this summer.
Oil and gas output will be “broadly flat” in 2007, Hayward said, while next year’s will be 500,000 barrels lower than previously estimated.
The downgrades were partly a result of more conservative oil price assumptions and divestments, and partly because of further setbacks to the Thunder Horse and Atlantis platforms in the Gulf of Mexico.
Fourth-quarter profit slumped 12pc to £1.97bn, helping push the shares down 6 1/2p to 535p.
For the full year BP reported earnings of £11.3bn, thanks to record high oil prices.
At his first presentation as heir apparent, Hayward yesterday asked “for a little time to get my feet under the desk.”
But he is already coming under huge shareholder pressure to ramp up production and restore confidence following a torrid two years. BP has been hit by safety scandals, repeated production disappointments and oil spills in Alaska.
Browne’s personal reputation has been badly tainted by the Texas City refinery disaster, which killed 15 workers.
Some investors claim the firm should be split in two, while others want it to ditch a stock-buyback programme that has failed to galvanise its share price performance — a call BP yesterday shrugged off.
Hayward admitted that costs are still rising rapidly and supply chains are “stretched to breaking point.”
Faced with an influx of inexperienced staff, BP will “deliberately-slow the pace of our activity in order to improve safety and efficiency.”
Insiders expect Hayward to be a low-profile chief executive who knuckles quickly down to the job. By contrast his predecessor was known as the Sun King — an oilman whose global heft far outweighed his diminutive stature.
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