(BP CEO Tony Hayward story updated for BP Russia operations, yacht race)
NEW YORK (
) -- It was inevitable that the "Tony Must Go" rhetoric would hit fever pitch after the BP CEO testified on Capitol Hill on Thursday. The testimony provided by BP CEO Tony Hayward was the expected -- and disappointing -- non-event comprised of a steady flow of legal non-answers.
The BP CEO didn't do himself any favors over the weekend, either, when he was spotted at a glitzy English yacht race sponsored by JPMorgan Chase, watching his lavish boat compete. Granted, anything the BP CEO could consider doing these days, other than sitting in a four-by-four cage in a public square and being harassed by U.S. citizens armed with water guns full of heavy crude and saliva, would probably run the risk of invoking additional outrage. Wait a second, that description sort of sounds like testifying on Capitol Hill before angry congresspeople, so let's give the beaten-up CEO a pass and say Hayward already has that activity covered.
The yacht race won't get the BP CEO fired anyway. And Congress was ready to fire Hayward before, during and after his testimony last week. While the Flow Rate Technical Group of the federal government and BP still can't put their scientific fingers on the exact rate of oil gushing out of the leaking BP well, toward the end of Hayward's testimony Rep. Peter Welch (D-Vt.) -- who called for Hayward's resignation at least twice during his questioning -- measured at least 65 non-answers from the BP CEO about what went wrong with BP's well operations.
When the only moments of interest in seven hours of testimony on Capitol Hill are a protester covered in oil being wrestled to the ground by Capitol Hill security and Rep. Joe Barton making the now infamous "shakedown" comment, it's pretty obvious that there was little substance from Hayward about the substance spilling into the Gulf of Mexico -- close to 840,000 gallons alone during the seven hours it took to get through needless posturing and questioning from congressmen and women met by Hayward's evasions.
If there were a chemical dispersant to take care of the large plume of Washington sleaze, media slime and legal slipperiness from Hayward, we might all be better off using it, regardless of the dispersant's level of toxicity.
As for Rep. Barton, who at first tried to shamefully apologize by saying he was sorry if his impossible to misconstrue comments were "misconstrued," the true shakedown is the fact that he was willing to make such embarrassing comments to protect his shakedown of the oil and gas lobby -- Barton has received more money from the oil and gas lobby than any Congressman since the 1990s.
There might be a separate problem from the overhaul of the Minerals Management Service in the fact that Barton is among those chosen by Congress to serve as a ranking member on the Oversight and Investigations Committee of House Energy.
Rep. Peter Welch asked Hayward several times during the Capitol Hill grilling if he deserved to be fired. Hayward didn't answer, and no one can answer that question, though everyone is speculating on Hayward's fate today, and has been for weeks already. The only available answer to that question right now can be taken directly from Tony Hayward's testimony.
To quote the BP CEO: "I'm afraid I can't answer that question." "I'm not involved in the decision-making process." "It's too early to draw conclusions."
On that last evasive maneuver, though, it's apparently far from too early to draw conclusions on whether Hayward will be fired. It's just too early to know who will replace the Most Hated Man in America?
got the Hayward is a "dead man walking" issue going on Friday through its analysis of Hayward's physical posture at the Capitol Hill hearing, citing body language as one example of the telling signs that Hayawrd was finished as BP CEO. Seems a bit of a stretch, and in Hayward's defense, after seven hours of what he endured on Thursday -- the verbal equivalent of waterboarding -- looking worse for the wear, and looking like you would rather be anywhere but there, would be a logical posture for any sane human being.
We learned about a lot of jobs Hayward won't have if he is eventually, or immediately, fired by BP. During Congressional questioning about allegedly risky decisions made by BP in well operations to save time and money, Hayward's most consistent reply was to round up all of the jobs he is not qualified to perform. "I'm not a drilling engineer;" "I'm not a cement engineer;" "I'm not a technically qualified engineer in these matters;" and on the question of the controversial massive oil plumes circulating beneath the surface of the Gulf of Mexico,"I'm not an oceanographic scientist." Damn it, Jim, I'm just an oil CEO as endangered as the Gulf's brown pelican and Kemp Ridley's sea turtle.
Already, the media circus has erected its big Potential BP CEO Replacement tent to include former British Prime Minister Tony Blair. The inside job theory is centering on Bob Dudley, managing director of BP, who was recently tapped to head up the U.S. oil spill response -- and formerly ran BP's massive Russia-based operations.
There are a few practical and political reasons supporting a Dudley CEO posting at BP.
For one, Dudley is already managing the oil spill response which could be a major issue for BP for years to come. Also, as a U.S. citizen, it could be a good image move for BP to have an American running the company given the level of vitriol in the U.S. as a result of the oil spill. Number two -- and often cited in discussion of Dudley being tapped to manage the oil spill -- as manager of BP's Russian operations Dudley has experience working with a hostile government that is prone to manipulate Western corporations. Working in Russia, it is safe to assume that Dudley knows from "shakedowns."
Currently, the U.S. government could be considered hostile to BP, and be judged as in the mood to manipulate BP to the point of barring the company from operating in the U.S. ever again. Given the extent to which BP has built up its presence in the Gulf of Mexico and Alaska, as a matter of corporate risk management it might be a wise idea to have an American running the show. Said one energy analyst who did not want to be quoted on the heights to which BP CEO speculation has risen, "If you are trying to maintain a long-term presence in the U.S., the logical choice for next CEO would be Dudley."
On Friday, BP announced that CEO Tony Hayward would be stepping down from his position heading day-to-day operations in the Gulf of Mexico. Hayward said in his testimony on Capitol Hill on Friday that he speaks with U.S. Coast Guard Admiral Thad Allen of the Unified Command at least once a day, and it seems those calls may now be going to Dudley.
Yet it is not as if there is nothing left for Hayward to do having been removed from day-to-day operations in the Gulf. In fact, with Dudley leaving Russia and Russian President Dmitri Medvedev saying last week that BP might go under, Hayward was being dispatched to Russia -- where BP has an enormous oil and gas operation -- to talk down the Russian government from its "BP death" rhetoric.
BP is also reportedly at work on a $50 billion oil spill aid package that will encompass up to $20 billion in asset sales, $10 billion in debt issues, and $20 billion in new capital commitments from banks. There is plenty on the BP plate to keep a CEO busy, without the oil spill, and for when he can sneak away from yacht races.
As for the "Tony Blair for BP CEO" campaign, Fadel Gheit, energy analyst at Oppenheimer & Co., said, "You might as well put Bill Clinton in the BP CEO spot."
Gheit, who has traveled in different parts of the world with Tony Hayward as part of his coverage of BP, said the BP CEO is "in deep trouble," and putting his friendship with Hayward aside, added, "At the end of the day, that's what you make the big bucks for when you're called CEO, and that's where the buck stops." Gheit said, "BP will survive, but Tony Hayward, I don't know."
Of course, the last time BP replaced a CEO it chose the head of its exploration and production division (Hayward). Now it's Andy Inglis, who (lucky him) has not been in the spotlight of the press frenzy over the oil spill -- unlike say, chief operating officer Doug Suttles. Even if qualified for the top slot, Suttles now has a laundry list of oil spill-related quotes that won't do much for BP in the court of public opinion. Suttles hasn't made the gaffes of Hayward, but he has consistently presented an optimistic gloss on events that borders on the intentionally misleading.
Additionally, Inglis was made CEO of exploration and production when Hayward was promoted to the top corporate spot, so there would be logic to the succession, but that logic might be thrown out the window since this was the thinking that brought Hayward to the top of the BP chart. If Inglis is tapped, he might not want to come into the spot talking about his "laser-like" focus on safety.
There are some high profile oil executives from among the retired ranks of the U.S. energy giants if BP is looking for a commanding U.S. citizen to run the operation.
former top man Lee Raymond, for example, though Raymond is probably too old to be considered a serious candidate. There is also
former top man David O'Reilly and Archie Dunham of
as retirees who could be plucked off the greens, but are probably stretches. Of course, BP could just be acquired by one of its big oil peers and put an end to the CEO question, though Hayward might be fired before that happens.
The only thing anyone seems to agree on is that BP is probably already on the CEO search. "There are lots of of people with highly respected credentials, and I certainly think BP must be scouring highly visible people right now," said Oppenheimer's Gheit.
At the time of Hayward's succession to the CEO post in 2007, BP CEO John Browne said, "I am pleased that Peter
Sutherland, BP chairman and I have been able to work together to develop a successor in Tony in whom I have every confidence."
Well, times change. Indeed, it all raises the question, if Tony Hayward is going, going, gone,
Who will be the next BP CEO
? Take the poll below, to see what
--Reported by Eric Rosenbaum in New York.
Follow TheStreet.com on
and become a fan on
Copyright 2009 TheStreet.com Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.