CEO safe for now, heat on chairman: BP investors

LONDON Fri Jun 18, 2010 11:09am EDT

REFILE- QUALITY REPEAT BP CEO Tony Hayward testifies about the BP oil spill in the Gulf of Mexico at the House Energy and Commerce Committee on Capitol Hill in Washington, June 17, 2010. REUTERS/Kevin Lamarque

REFILE- QUALITY REPEAT BP CEO Tony Hayward testifies about the BP oil spill in the Gulf of Mexico at the House Energy and Commerce Committee on Capitol Hill in Washington, June 17, 2010.

Credit: Reuters/Kevin Lamarque

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LONDON (Reuters) - BP CEO Tony Hayward may cling on after Thursday's mauling by U.S. lawmakers over the Gulf of Mexico oil spill, investors and analysts said, while chairman Carl-Henric Svanberg looked less secure.

BP shares gained in London after Chief Executive Hayward managed to fend off attacks by a congressional committee, and as hopes rose its $20 billion oil spill compensation and clean-up fund would cool investor anger. The oil giant has also said it will suspend dividends for the rest of the year.

"Hayward's performance wasn't great, but it could have been worse. As a shareholder, our absolute top priority is to see that all energies are being diverted to cap this wretched well," one top-10 investor told Reuters on condition of anonymity.

"Our view is that Hayward is doing as much as can be done, but the chairman has not come out of this well at all. He's hardly been visible."

Earlier this week, Svanberg was forced to apologize for speaking "clumsily" by referring to those hurt by the company's oil spill as "small people" following a White House meeting with President Barack Obama.

Another top-20 investor added: "From my perspective, it is going to be very, very difficult for the chairman to survive. The job needs someone who has some kind of credibility on the world stage, and the current guy clearly doesn't have that."

Other shareholders were keeping their powder dry until the oil well was capped.

"At the moment, we don't think that any debate on a management change would be particularly helpful. We have no interest in making the situation any worse than it already is," another top-10 investor said.

BP shares, which have nearly halved since the explosion on April 20, were up 1.35 percent at 364.45 pence at 1405 GMT on Friday.

Collins Stewart and Societe Generale raised their investment recommendations to "Buy" from "Hold," saying the share drop had been so severe that BP now offered good value.

Panmure Gordon analyst Peter Hitchens said: "There's more pressure on the chairman, who has been, sort of, at the initial stages, largely anonymous," said Hitchens.

"I think at this stage ultimately someone will have to go because it has been a huge embarrassment for BP."

"Obviously, everyone is looking for a scapegoat, but it doesn't necessarily have to be (Hayward). It could be the chairman," said Societe Generale analyst Evgeny Solovyov.

(Editing by Will Waterman)

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Comments (5)
gitagrip wrote:
The more things change, the more they remain the same — welcome to an all-American good old fashioned self-serving McCARTHY type inquisition. The sacrificial scapegoat has been found.

Jun 18, 2010 12:20pm EDT  --  Report as abuse
javalation wrote:
How forthcoming has Tony Hayward been? How many in the line of command who clearly made decisions that lead to this disaster, have been fired? Perhaps Tony was advised by his legal council to play the no nothing fool, but he said he didn’t know something like three dozen times, and he hasn’t fired anyone.

The reason Hayward is being grilled, is that he appears to have headed a corporate culture that was so profit oriented that they cut corners to save money and time, even when outside experts told them of the dangers.

Those of us who live on the Gulf are suffering for this arrogance and want our lives back and the lives of our ecosystem that they’ve destroyed.

Jun 18, 2010 1:05pm EDT  --  Report as abuse
burf wrote:
@gitagrip: I would hope that you are just repeating some ideological talking point you heard. Comparing the McCarthy witch-hunt to yesterday’s hearings, is ludicrous. BP has the worst environmental/safety record of all the multi-nationals. It would seem that this blowout was preventable. Hayward is the honcho, thus, he is responsible for BP.
Congress is investigating the Gulf mess.
It’s a no-brainer that he would be called to testify. People are angry that the Gulf is dying, and Congress expressed that outrage. Your ideology blinds you to reality. The Constitution is about the People, not the Corporation. Your types throw the word Constitution around a lot… maybe you should read it?

Jun 18, 2010 1:32pm EDT  --  Report as abuse
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