Another Torrent BP Works to Stem: Its C.E.O.

Another Torrent BP Works to Stem: Its C.E.O.
By JAD MOUAWAD and CLIFFORD KRAUSS
Copyright by The Associated Press
Published: June 3, 2010
http://www.nytimes.com/2010/06/04/us/04image.html?th&emc=th


BP, already bedeviled by an out-of-control well spewing millions of gallons of oil into the Gulf of Mexico, now finds itself with one more problem: Tony Hayward, its gaffe-prone chief executive.

Mr. Hayward on YouTube, pledging, “We will make this right.”

Among his memorable lines: The spill is not going to cause big problems because the gulf “is a very big ocean” and “the environmental impact of this disaster is likely to have been very, very modest.” And this week, he apologized to the families of 11 men who died on the rig for having said, “You know, I’d like my life back.”

But rather than receiving a limited public role, Mr. Hayward, a geologist who has led the company for three years, has become even more the public face of the company. On Thursday, BP began showing a new television ad in which Mr. Hayward, speaking directly into a camera, pledges to spare no effort to clean up the spill.

It ends with a heartfelt promise: “We will get it done. We will make this right.” (The same day, in an interview published in The Financial Times, he said, “What is undoubtedly true is that we did not have the tools you would want in your tool kit.”)

Instead of reassuring the public, critics say, Mr. Hayward has turned into a day-after-day reminder of BP’s public relations missteps in responding to the crisis, which began six weeks ago and looks likely to continue well into the summer.

Mr. Hayward and the company have repeatedly played down the size of the spill, the company’s own role in the April 20 explosion of the Deepwater Horizon, and the environmental damage that has occurred. At the same time, they have projected a tone of unrelenting optimism despite repeated failures to plug the well.

The chief executive’s tendency to utter provocative statements has prompted a surge of criticism from politicians, bloggers and television pundits, who took particular offense at the “I’d like my life back” comment.

But Mr. Hayward, an earnest-looking man with cherubic red cheeks and a soft British accent, remains ever present in BP’s response efforts.

One Louisiana congressman, Charlie Melancon, has started a petition campaign calling on BP’s board of directors to fire Mr. Hayward, and financial analysts are increasingly predicting that he will get the boot before the crisis is over.

“People want to know someone is in charge, that the right person is there, but someone who says the stuff that Hayward has said doesn’t engender confidence,” said Sydney Finkelstein, a professor of strategy and leadership at Dartmouth University’s Tuck School of Business. “We understand he is overwhelmed, but that also might suggest he’s not the right man for the job.”

Robert Wine, a BP spokesman, said that Mr. Hayward “has the full support of the board, and he is very much at the heart of the response managing everything we are doing.”

Mr. Hayward, 53, ascended to the top job when his predecessor, John Browne, resigned after a personal scandal and a series of major accidents. Mr. Hayward promised to refocus the company culture on safety.

Much is at stake for BP, the top oil and gas producer in the United States and the largest deepwater operator in the Gulf of Mexico. The company has already spent about $1 billion to deal with the accident, and it faces billions of dollars in additional damage claims and government penalties, with the liability growing every day that the leak continues. In addition, the Justice Department, an independent panel and numerous Congressional committees are investigating the company.

Shareholders are worried about the cost to the company, based in London, whose stock has fallen about 35 percent since the explosion.

To be sure, BP is facing an unprecedented technological and engineering challenge, battling formidable odds in trying to plug a damaged oil well in the darkness and pressure found 5,000 feet below the ocean surface. After several efforts to stop the oil flow failed, the company is now seeking to install a temporary dome to capture most of the spilled oil until it can drill two relief wells.

Those relief wells, which would be used to inject cement into the damaged well to permanently kill it, are not expected to be completed before August, and the environmental damage would linger well after that — which means that the company and Mr. Hayward face a public relations crisis that will last for many months.

The company has enlisted the help of the Brunswick Group, a public relations and crisis management firm, to deal with the accident. It has dedicated the home page of its Web site, BP.com, to the crisis and taken out full-page advertisements in major newspapers.

BP has also hired a new head of media relations in the United States, Anne Womack Kolton, who worked at Brunswick and is a former aide to Vice President Dick Cheney and Energy Department spokeswoman.

In Washington, BP has become a toxic political symbol that is a target on all fronts, even as it is seeking to work with the government get out of its current predicament.

Before the spill, BP had maintained a low profile in Washington relative to other companies, with its lobbying work and political contributions usually trailing other oil-and-gas giants like Exxon Mobil, Chevron and Conoco Phillips. Unlike many other companies with federal interests, BP kept most of its lobbying work in-house, although it had retained several prominent Washington lobbyists, including Ken Duberstein and Tony Podesta, to make its case on issues including tax incentives for gas production and climate control regulations.

From the start, BP promised to be transparent about the spill. But the company has wavered between providing information to the public and strictly limiting it. For example, it resisted for weeks putting up a live video feed of the underwater spill, agreeing to it only after intense pressure from Congress. The company has consistently refused to use widely used scientific techniques to measure the spill, saying it was focused on shutting down the well.

Administration officials and Congressional leaders have accused BP of hiding the true dimensions of the leak for financial reasons. Carol M. Browner, the White House energy and environment adviser, has noted that BP has a “vested financial interest” in minimizing the size of the leak because the fines the company will eventually pay will in part be based on the amount of oil that has escaped.

BP and the government initially estimated the well was leaking 1,000 barrels a day. But since then, government scientists have come up with a new and much larger rate of 12,000 to 19,000 barrels a day.

“They have tried to control the message, including controlling facts, because they have a direct financial interest in this,” said David Pettit, a senior lawyer with Natural Resources Defense Council. “The government is letting BP clean up their own crime scene. On TV cop shows, they don’t do that.”

Perhaps trying to tamp down the outcry over his own comments, Mr. Hayward’s remarks to reporters on Thursday in Houston were more tame. He promised that the company would clean up every drop of oil and “restore the shoreline to its original state.”

The chief executive added: “We will be here for a very long time. We realize this is just the beginning.”

Jad Mouawad reported from New York and Clifford Krauss from Houston. Eric Lichtblau contributed reporting from Washington and Stuart Elliott from New York.