WRAPUP 7-BP CEO Hayward nears exit; relief well work resumes

* BP board to discuss plan for CEO to go – sources

* Dudley likely to be new CEO, announcement soon – sources

* Storm dissipates, ships back on site Sunday

* “Static kill” to plug leak could start in three days

(Adds details on relief well, background)

By Tom Bergin and Kristen Hays

LONDON/HOUSTON, July 25 (BestGrowthStock) – BP Plc (BP.L: )(BP.N: ) has
decided Chief Executive Tony Hayward should step down over his
handling of the Gulf of Mexico oil spill and his departure is
likely to be announced in the next 36 hours, sources close to
the company said on Sunday.

BP’s board is due to meet in London tomorrow to discuss a
plan for Hayward to step down and be replaced by Bob Dudley, a
senior U.S. executive who is currently managing the oil spill
response operation, the sources said.

“The details are being worked out,” one source said.

As the boardroom drama intensified, clearing weather in the
spill zone allowed work to resume on drilling a relief well to
plug the leak that has been spewing oil into the Gulf for some
three months.

A Transocean Ltd (RIGN.VX: ) (RIG.N: ) rig was reconnecting
equipment, a BP spokeswoman said. Other vessels that had left
the region Friday to get out of the path of what was Tropical
Storm Bonnie were also returning. [ID:nN25190333]

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For full spill coverage http://link.reuters.com/hed87k

Special report on US spill response chief [ID:nN21101035]

Breakingviews [ID:nLDE66K0J6]

Graphic on BP assets http://link.reuters.com/byn78m

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Replacing Hayward, who provoked public anger in the United
States with his gaffes, including a statement that he wanted
his life back, and later going sailing as oil spewed into the
sea, carries a risk at this point.

The Macondo well, which has been sealed with a temporary
cap after leaking up to 60,000 barrels per day into the sea,
has not been shut off for good and if problems arise in
achieving this, Dudley’s reputation could also be tarnished.

However, with the well sealed for over a week by a
temporary cap, the board’s concern has shifted to the public
and market’s preoccupation with Hayward’s future, which is
making it hard for the company to move forward, the sources
said.

Hayward has accepted it is in the best interests of BP for
him to go, the sources said.

RELIEF WELL NEARS COMPLETION

BP, which has lost 40 percent of its market capitalization
since the blast that caused the spill, would not comment on the
reports and said Hayward remained the CEO, with the full
support of the board and management.

But a BP spokesman declined to repeat the company’s
statements from last week that the board was not even
discussing Hayward’s future.

Investors fear Hayward’s continued presence at the company
will make it harder for BP to rebuild its reputation in the
United States, where 40 percent of its assets are based.

A relief well, which should permanently plug the well, is
expected to be completed in the coming weeks. BP will finish
placing the last bit of pipe sometime in the next week, the top
U.S. official overseeing the spill response said. [ID:nWEN7685]

As remnants of Bonnie dissipated over the Gulf on Saturday,
retired Coast Guard Admiral Thad Allen, head of the U.S. spill
response, said a “static kill” operation to plug the well by
pumping in heavy drilling mud and possibly cement could start
in three to five days. [ID:nN24147153]

“The static kill could go very quickly,” Allen said.

Although vessels were returning to the site on Sunday,
Allen said the storm could push back BP’s mid-August target
date for completing it by seven to nine days. [ID:nN24147153]

Though toothless in the end, Bonnie prompted oil and
natural gas producers to evacuate many offshore workers,
halting more than half of the oil production in U.S.-regulated
areas of the Gulf and about 25 percent of gas output.

BP sealed the leak July 15 with a tight-fitting containment
cap, choking off the flow of oil for the first time since an
April 20 rig explosion killed 11 workers and sent crude spewing
into the Gulf, soiling coastlines in five U.S. states and
devastating tourism and fishery industries.

As the bad weather passed, the independent administrator
running a $20 billion fund set up by BP to compensate people
for financial losses from the spill said the energy giant was
holding up payments to economic victims.

“I have a concern that BP is stalling claims. … I doubt
they are stalling for money. It’s not that. I just don’t think
they know the answers to the questions” from claimants, Kenneth
Feinberg told reporters on Saturday in Alabama. [ID:nN24177402]

Thousands of businesses in Gulf Coast states have been
crippled by the spill, the worst in U.S. history. BP agreed to
set up the $20 billion fund under pressure from President
Barack Obama.

At a town hall meeting in southern Alabama, fishermen and
other business owners told Feinberg that they were frustrated
and angry about what they said was a slow and complex claims
process that lacks transparency.

“After today there will be no more business as usual. I
learned today the depth of frustration in people here on the
coast,” Feinberg told the meeting.

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(Additional reporting by Leigh Coleman in Alabama, Tom Brown
in Miami; additional writing by Doina Chiacu and Emily Kaiser;
editing by Paul Simao and Stacey Joyce)

WRAPUP 7-BP CEO Hayward nears exit; relief well work resumes