BP chief an ops man who needs to show PR skills

By Tom Bergin

LONDON (BestGrowthStock) – BP Plc chief Tony Hayward bears little similarity to his predecessor John Browne, but if an oil spill in the Gulf of Mexico is not to prompt a major political backlash he will have to muster some of the latter’s admired diplomatic skills.

Hayward met lawmakers in Washington on Tuesday, outlining what BP was doing to halt the flow of oil from its Macondo well and to stop the 130 miles by 70 miles oil slick it generated from ravaging the Gulf coastline.

He will also be hoping he can convince Capitol Hill and the U.S. public BP was not negligent and so avoid the kind of public opprobrium recently heaped, for very different reasons, on Goldman Sachs and Toyota Motor Corp.

Hayward, a geologist known for blunt speaking, has spent the last three years as CEO focused internally on turning around BP’s operations, which when he took over were flagging after a series of project delays and safety failures.

Investors now hope he will show a similar talent for defending BP’s reputation against a torrent of criticism from politicians and environmentalists.

“We’ve never seen him in action doing something like this … He has got to make sure that BP doesn’t fall out of favor with the U.S. government,” said Coin Morton, fund manager at Rensburg Fund Management.

Hayward’s internal focus is in contrast to his predecessor Browne who spent his tenure glad-handing Presidents and Prime Ministers to smooth the way for the mega-mergers and grand strategic ventures which built BP into Europe’s biggest company.

“Browne seemed to be very good on the big stage,” Morton added.

Concern about the possible business-crimping scrutiny BP could face has wiped around $30 billion off its market value — far more than the $8 billion to $9 billion analysts think the clean up and compensation claims will cost BP at most.

OFF THE PEG

Despite both having joined BP from university after doing scientific degrees and both taking the top job after heading BP’s core exploration and production unit, Hayward and Browne would seem to have little else in common.

Browne was an opera and art lover, while Hayward, whose thick brown hair helps give him an appearance younger than his 52 years, prefers soccer and rugby.

Browne wore tailored suits, handmade shoes and ties with a perfect dimple below the knot; Hayward’s suits are off the peg, he often dispenses with a tie and when he wears one it doesn’t look like he spent much time agonizing over the knot.

Hayward wears a big watch and cufflinks with sporting motifs that Browne, one senses, might have found gauche.

Hayward is also renowned for his youthful looks, his smooth features and thick head of brown hair which belie his 52 years, although in an interview with Reuters on Friday he appeared less fresh faced or inclined to make a joke than normal.

Hayward told a BP magazine before being appointed CEO he took all his holidays — occasionally sailing vacations with his wife and two children — and rarely worked at weekends.

For Browne, who is gay and who quit the CEO post after admitting to lying in a court document about how he met a former lover, his work was his life. Apart from short breaks to Venice, where he has an apartment, he took few holidays.

The differences in business style are also stark. Browne was seen as remote and in his memoirs, published this year, he accepts people did not feel comfortable sharing bad news with him.

Hayward is more approachable and less guarded in his comments. Shortly after being appointed CEO, he told employees BP’s operational performance was “terrible” — a comment which hit BP’s shares when reported, prompting comparisons with media-savvy Browne.

Browne backed investments in green energy, pushing the “Beyond Petroleum” brand. Hayward by contrast takes a more skeptical approach to renewables and appears slightly embarrassed when asked about “Beyond Petroleum”.

NO REAL TEST

Browne’s deft diplomatic skills helped elevate him to Britain’s House of Lords, the upper house of parliament, and led to him being regaled in the press for his green image.

They also helped secure political backing for big deals in Azerbaijan and Russia where BP’s joint venture, TNK-BP, was blessed by Vladimir Putin.

He also convinced regulators to back mega-mergers such as the takeovers of Amoco and Arco, which prompted rivals to tie up and thus reshape the oil industry.

In contrast, BP under Hayward has had little need to court high political support. The company has not launched any big takeovers or sought ground-breaking deals in new markets.

The only high profile international dispute Hayward has faced was with a battle for control of TNK-BP in 2008, with BP’s Russia-connected oligarch partners.

However, Hayward leaned heavily on BP’s then-chairman, Peter Sutherland, to act as the public face of BP’s campaign to defend its position and the final settlement involved BP acceding to most of its partners demands.

BP’s recent history in the United States, where 40 percent of its assets are based, will not make the political challenge Hayward now faces any easier.

In 2005, an explosion at BP’s Texas City refinery killed 15 workers. Regulators said cost cutting was partly to blame. The company itself admitted oil and gas leaks in Alaska a year later were due to cost cuts.

However, for now the market still seems to be showing confidence in Hayward’s stewardship. Even after losing around 15 percent in the past two weeks, BP’s shares have still outperformed other European oil stocks since his appointment.

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(Editing by David Holmes)

BP chief an ops man who needs to show PR skills