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Hayward Steps Down: BP Turns a Profit
Integrated petroleum giant BP plc (BP) has announced that its embattled Chief Executive Tony Hayward will be stepping down in the wake of the company's massive oil spill in the Gulf of Mexico. BP was heavily criticized for its seemingly slow initial response following the rupture of a well on April 20th, with much of the blame directed at Mr. Hayward. Indeed, BP ADRs have plummeted more than 35% in the ensuing three-month period, with mounting pressure on the company to replace its Chief Executive. Mr. Hayward will be replaced by Robert Dudley, the BP engineer who has spearheaded the company's clean-up efforts. His succession marks the first time the British company has been led by an American.
After a series of failed attempts to cap the well, BP's latest effort has apparently succeeded at stemming the flow of oil. A more-permanent solution--the drilling of two relief wells--will not be completed until August -- at the earliest.
Meantime, BP turned a $2.1 billion profit in the June quarter, excluding a $32.2 billion charge related to the ongoing clean-up effort, compared with $4.4 billion in the prior year. Factoring in that charge, the company suffered a $17 billion loss. In addition, BP expects refining margins to decline, which may weigh on results in the third quarter and for the rest of the year. Too, BP has suspended its dividend for the balance of the year. It will review its payout policy in early 2011.
About The Company: BP plc. is one of the world’s largest integrated oil companies. Its daily production in 2009 (including equity interests) was as follows: oil & liquids, 2,535,000 barrels; natural gas, 8.5 billion cubic feet; refinery throughput, 2.2 million barrels. The 2009 refining availability was 93.6%. Also that year, the average selling prices were: $56.26 per barrel of oil (vs. $90.20 in ’08); $3.25 per thousand cubic feet natural gas (vs. $6.00 in ’08). As of 12/31/09, BP had proven reserves of: 5.7 billion barrels of oil; 40.4 trillion cubic feet (tcf) of natural gas. The estimated pretax present value of these reserves is $118 billion. The company has equity interests in 4.9 billion barrels of oil and 4.7 tcf natural gas.