06-03-2010, 07:48 AM
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#305 (permalink)
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Junkie
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It is unlikely Tony Hayward will get through this and keep his job, he will address a group of shareholders and analysts on the 4th. BP's debt rating has been lowered by one rating agency. BP has to face the possibility of selling assets to cover costs of clean up, damages and stopping the leak. He has failed. Others have failed also, some within government - who should be held accountable? where does the buck stop? Who is in charge?
Quote:
June 3 (Bloomberg) -- BP Plc Chief Executive Officer Tony Hayward faces rising speculation that the worsening oil spill will cost him his job as he grapples with worried investors, rating downgrades, U.S. politicians and public anger over the company’s inability to control the crisis.
Hayward will address London’s investors and analysts tomorrow, spokesman Mark Salt said by phone. Moody’s Investors Service and Fitch Ratings downgraded BP today because the costs from the accident will hurt finances. Two U.S. senators said yesterday it would be “unfathomable” for BP to pay a dividend.
Criticism of Hayward grew this week after BP’s failure to stem the flow from the damaged well caused the biggest share price drop in 18 years and raised the risk the London-based company may become a takeover target. Yesterday, he apologized for comments last week that he wanted his “life back.”
“The pressure is on Hayward at the moment, primarily from politicians,” said David Paterson, head of corporate governance at the National Association of Pension Funds in London. “Investors clearly will want some answers in order to understand what the long-term future for the company is.”
More than 40 billion pounds ($59 billion) has been wiped off the value of BP since the April 20 explosion that killed 11 workers on the Deepwater Horizon rig. Credit Suisse said yesterday the disaster may cost BP as much as $37 billion, almost double this year’s likely profit, risking a cut in dividends.
Dividend Cut
“There is a question mark over the chief executive officer,” said Colin McLean, of SVM Asset Management Ltd. in Edinburgh, which holds BP shares. “The dividend will continue but be cut. A quarter or a third is quite possible.”
BP paid a dividend of 56 cents a share last year. If it maintains it, the ratio of dividend to the current share price would be 9.3 percent, more than any of the company’s 18 global peers, according to Bloomberg data.
Irish bookmaker Paddy Power offered even odds that Hayward will leave his post by the end of year. The New York Daily News yesterday called him “the most hated -- and clueless -- man in America” for his handling of the crisis.
“It looks increasingly likely that heads will roll, and Tony will be in the frame,” Dougie Youngson, an analyst at Arbuthnot Securities Ltd. in London, said in a Bloomberg Television interview. “The longer these things go on, the shakier things look for the company.”
Under Fire
Hayward, whose call tomorrow will be relayed on BP’s website, has come under fire from lawmakers after BP initially underestimated the size of the leak, starting with 1,000 barrels a day and then raising it to 5,000 barrels a day. U.S. Geological Survey and science adviser Marcia McNutt said May 27 the well may have been gushing 19,000 barrels a day.
BP sheared away the riser from its leaking Gulf of Mexico well today, a precursor to the company’s attempt to lower a cap onto the leak and divert oil to ships on the surface.
An attempt to plug the well with mud and debris failed last weekend. That means that the flow of oil from the well probably won’t be stopped until August, when the drilling of relief wells is scheduled for completion.
Hayward apologized yesterday for what he called “hurtful” comments saying that he wanted the spill to end in order to get “his life back.” That followed comments in which he said that the environmental impact of the spill would be “very, very modest” and that the amount of oil and dispersant is tiny compared to the size of the Gulf.
Improve Safety
Hayward spent much of his first three years as CEO working to improve BP’s safety record after a series of accidents, including the deadly March 2005 Texas City refinery explosion that helped bring down his predecessor, John Browne.
“Safety has been a major plank of Hayward’s tenure,” the National Association of Pension Funds’ Paterson said.
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BP?s Hayward Faces Downgrades, Investors as Spill May Cost Job - Bloomberg.com
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