WRAPUP 9-BP set to replace CEO; spill cleanup resumes

* Hayward to be replaced as CEO by American – sources

* Second-quarter results on Tuesday, big loss expected

* BP could start to kill well next week – U.S. official

* BP shares rise nearly 5 percent
(Adds quote from Louisiana resident)

By Tom Bergin

LONDON, July 26 (BestGrowthStock) – BP Plc (BP.L: )(BP.N: ) is expected
to install an American known for diplomacy as chief executive,
replacing Tony Hayward who has come under fire for his
gaffe-prone handling of the worst oil spill in U.S. history.

Bob Dudley, the U.S. executive managing BP’s response to
the spill in the Gulf of Mexico, is poised to get the top job,
a move that could soften U.S. criticism of the British oil
major, sources close to the company said. [ID:nLDE66P0X9]

BP said it did not plan to issue a statement before 2 a.m.
EDT/0600 GMT on Tuesday, the time it is due to report its
results for the second quarter.

Analysts at Barclays said BP could report a loss of $13
billion for the second quarter as it makes provisions of up to
$25 billion for the cost of the spill. Those figures would far
exceed an expected 77 percent jump in underlying profit.

BP could begin the final procedure to kill its leaking well
late next week, the top U.S. spill response official said. That
will involve pumping mud and cement through a relief well that
has been drilled since May 2 to a spot close to the bottom of
the damaged well. [ID:nN26223934]

“The next thing that we need to do is get this well in the
position where we can make the intercept and kill this well
from the bottom,” retired Coast Guard Admiral Thad Allen told
reporters in Washington.

More than five million barrels of oil have spilled into the
Gulf of Mexico since the undersea leak began in late April,
according to U.S. government estimates, hitting the coastlines
and economies of five states and killing or injuring countless
sea creatures and coastal birds.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

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

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

Breakingviews [ID:nN26213339]

Reuters Insider http://link.reuters.com/hym39m

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

Profile of Dudley [ID:nLDE66P0IF]

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

“NOT BE MISSED”

Some Gulf Coast residents, seething about damage from the
spill and BP’s compensation process, said they would be happy
to see Hayward go.

“He will not be missed,” said Larry Hooper of Empire,
Louisiana, who runs an offshore fishing charter business.

Hayward, a 53-year-old geologist, has described Dudley as
BP’s “secretary of state” for his role overseeing the cleanup
efforts.

Dudley, who was raised in Mississippi, would be the first
non-Briton to become chief executive of BP. He was previously
head of BP’s Russian joint venture, TNK-BP, until he was forced
to flee the country amid a spat between BP and its partners.

A source close to the matter said Hayward will be offered a
directorship at TNK-BP as part of his departure deal.

Investors cheered Hayward’s expected departure, sending BP
shares up nearly 5 percent in London and New York even though
the company is expected to report large losses on Tuesday.

BP has lost 40 percent of its market capitalization since
the April 20 blast on a drilling rig that killed 11 workers and
started the spill that has hit about 39 percent of the coast
stretching from Brownsville, Texas, to the Florida Keys.

Analysts said Hayward’s exit was good for the stock because
he had become an easy target for angry U.S. lawmakers and Gulf
residents. Hayward was pilloried in the United States for
complaining he wanted his “life back” weeks after the deadly
rig explosion and start of the spill.

“It is customary that when things don’t go right, you are
going to chop heads and usually that starts at the top,” said
Steve Goldman, a market strategist with money manager Weeden &
Co in Greenwich, Connecticut.

BP on Monday dropped its previous insistence that Hayward
remained chief executive with the full support of the company’s
board and management. Sources said BP’s board discussed a plan
for Hayward’s departure on Monday evening.

Hayward and Dudley left the board meeting separately,
neither making any public comment.

ACCOUNTING FOR DISASTER

Even if Hayward steps down as chief executive, he may not
escape another round of testimony before the U.S. Congress.
Senator Robert Menendez said he wants Hayward to testify on
whether BP influenced the release of the convicted Lockerbie
bomber to further the company’s business interests.

“Tony Hayward, regardless of his status whether he is going
to be the CEO tomorrow or not, we believe that he was in the
midst of the negotiations with the Libyans as it related to
this oil deal,” Menendez, a Democrat, said in New York.

BP’s boardroom drama unfolded as it prepared to account for
the financial impact of the environmental catastrophe, which at
its worst lopped $100 billion from BP’s market value.

Dougie Youngson, an analyst with Arbuthnot, said he
expected BP to write down $20 billion in clean-up costs this
quarter “in order to give the new CEO a fighting chance.” That
would mean a loss in the order of $15 billion for the quarter,
he wrote in a research note maintaining his “sell” rating.

If Hayward goes, he will be the third of the last four BP
chief executives forced into an early exit. John Browne left
after lying in court papers about a gay love affair and Bob
Horton was pushed out over strategic disagreements in 1992.

Under BP’s terms of employment, Hayward would be entitled
to one year’s salary, or 1.045 million pounds ($1.6 million),
and he could be in line for additional payouts under the
company’s incentive scheme, which awards shares options.

Hayward would also keep his pension entitlements, which
were worth 10.8 million pounds at the end of last year.

Investment Analysis

(Additional reporting by Kristen Hays in Houston, Rachelle
Younglai in Venice, Louisiana, Angela Moon and Daniel Trotta in
New York and Dominic Lau and Sarah Young in London; Writing by
Michael Shields and Emily Kaiser; Editing by Ed Stoddard and
John O’Callaghan)
($1=.6473 Pound)

WRAPUP 9-BP set to replace CEO; spill cleanup resumes