Tony Hayward BP: $30 Billion Blowout
Tony Hayward Admits BP Unprepared for Spill
Theunis Bates Contributor
LONDON (Nov. 9) — In his first interview since stepping down as head of BP last month, Tony Hayward has admitted that the company was woefully unprepared to deal with the Gulf of Mexico oil spill, and he revealed how the disaster almost bankrupted the oil giant.
Hayward told the BBC — which tonight will air an hourlong documentary on the spill titled “BP: $30 Billion Blowout” — that the company had failed to draw up an emergency plan to plug a leaking deepwater well, and as a result, “we were making it up day to day.”
“What was going on was some extraordinary engineering,” he said. “But when it was played out in the full glare of the media as it was, of course it looked like fumbling and incompetence.”
And BP struggled with other less physical challenges. Hayward confessed that the firm was “not prepared to deal with the intensity of the media scrutiny” that followed the April 20 explosion aboard the Deepwater Horizon rig, which killed 11 workers and sent 4.4 million barrels of oil spilling into the ocean.
As the company’s public image deteriorated, so did its finances. The ex-BP boss said that just before his June 16 meeting with President Barack Obama — when the size of the spill had increased by 10 times in the space of a few weeks, and the White House was pressuring the firm to suspend dividend payments to shareholders — banks suddenly stopped lending to the company. “Prior to the meeting, the capital markets were effectively closed to BP,” Hayward said. “We were not able to borrow either short- or medium-term debt at all. It was a classic financial crisis issue.”
Bob Dudley, BP’s new CEO, told the BBC that the financial community even began to talk about the possibility of the company’s imminent collapse. “Word was beginning to circulate externally about the potential going-under of BP,” he said. “Could it survive this accident? The Bank of America called; it wouldn’t buy crude from us, suppliers were asking for money up front. This was a very unusual environment for BP.”
Although the oil giant survived the spill, Hayward didn’t. His poor handling of the disaster — he memorably told struggling Gulf Coast residents in May, “I would like my life back,” and in another interview said the gulf was “relatively tiny” compared to the “very big ocean” — cost him his job, and he stepped down as CEO in early October. During the BBC interview, Hayward said he understood why he had been “vilified and demonized” by the media. “You know, it’s very difficult to hate a company; it’s much easier to hate an individual,” he said.
However, the ex-BP boss added that he had been angered by some of the personal attacks aimed at him — especially over his decision to go sailing with his son off the south coast of England at the height of the disaster. That June outing was yet another PR gaffe for the embattled Brit and led to Sen. Richard Shelby, R-Ala., dubbing his actions the “height of arrogance.”
“I have to confess, at the time I was pretty angry actually,” Hayward said. “I hadn’t seen my son for three months. I was on the boat for six hours, between the hours of midnight and six o’clock in the morning U.S. time and I’m not certain I’d do anything different. I wanted to see my son.”
Hayward said that while he had the scientific understanding needed to lead a major oil company, the modern media wanted a smooth-talking executive with a different skill set.
“If I had done a degree at Rada [The Royal Academy of Dramatic Art] rather than a degree in geology, I may have done better, but I’m not certain it would’ve changed the outcome [of the spill],” he said. “But certainly the perception of myself may have been different.” Read more..