LONDON ( TheStreet) -- BP ( BP) is replacing persona non grata CEO Tony Hayward with American-born managing director Bob Dudley.

Reports about the BP CEO transition surfaced on Sunday, and became official when BP released its second quarter earnings on Tuesday morning.

Dudley, who is a member of BP's board and as managing director oversees the company's operations in Asia and the Americas, will take the CEO's reins on Oct. 1, allowing for a two-month transition period. Hayward will stay on the BP board until Nov. 30, and be nominated as a director for BP's Rusian joint venture, TNK-BP.

With Bob Dudley being named BP CEO -- the first American CEO for the British oil giant, and an American born in the Gulf Coast region -- is it be the right move for BP?

Speculation that Dudley would be named as replacement for Tony Hayward has been rife in the press ever since Dudley was tapped by BP to run its day-to-day Gulf of Mexico oil spill response operations, replacing Hayward. Infamously, on the weekend that Dudley took control of the BP oil spill response, Hayward was off to the races -- spotted at a corporate yachting event in the U.K. watching his boat compete.

The yacht incident was just one among many gaffes made by the BP CEO that helped to keep the target squarely on his head. Most infamously, Hayward became a lightning rod for public attacks after saying he wanted his life back during the oil spill crisis. As political pressure mounted on the federal government to show it was not helpless to take control of the oil spill, President Obama was even quoted as saying that he would have fired Tony Hayward.

Still, the larger issue for Hayward is that he failed on one of the two prime goals that he set as BP CEO: Hayward came into the CEO post at BP with primary objectives of streamlining the company, cutting costs and improving safety. A fatal explosion at the Texas City refinery in 2005 killed 15 people and injured more than 170.

Hayward did a good job cutting costs and generating impressive financial results with his restructuring of BP. BP reported a net profit of $6 billion for the first quarter of 2010. Still, Hayward's "laser beam" focus on safety turned out to be his potential undoing after the Gulf of Mexico oil spill began on April 20. As more details surface about the corners cut by BP in its deepwater drilling operations, the calls for Hayward's ouster have increased.

The failure in safety culminating in the Deepwater Horizon disaster is expected to force BP to quantify projected oil spill liabilities as high as $30 billion in its second quarter earnings on Tuesday. Some British market analysts are expecting the worst quarterly loss ever reported by a British company when BP announces second quarter results on Tuesday.

BP shares rose 5% on Monday morning as the reports about the departure of Hayward circulated, but the market was divided over plans to replace Hayward.

Some analysts were quoted in the press saying that Hayward has achieved considerable success at BP, and its financial strength under his leadership -- though it report a second quarter loss of $17 billion due to oil spill costs -- was reason enough to continue rewarding him with the BP CEO job.

In the least, there are analysts who believe that the removal of Hayward is the right move politically -- more or less a clean slate for BP. However, there was reluctance to view the removal of Hayward as a decision that was merited by the details of BP's financial performance during his tenure. For these Hayward defenders, his removal as CEO was not a judgment on his performance running a successful integrated oil company, but simply a recognition that BP can never recover its reputation in the U.S. as long as Hayward is CEO.

At least one BP historical trend remains intact with Hayward's resignation: BP announced in June that it was eliminating its hefty dividend payment for shareholders amid public backlash over an annual dividend of more than $10 billion during the oil spill. No BP CEO has ever survived a dividend cut.

From another perspective, some analysts have voiced skepticism about a politically motivated decision to bring in an American as CEO of the British oil company, arguing for a complete change of culture at BP that could only be brought about through an external search for a new CEO.

Dudley only became the focus of speculation about a new BP CEO when he took over day-to-day operations in the Gulf of Mexico. Previously, speculation had focused on the head of BP's oil refining business, Iain Conn.

The October time frame could simply be based on when BP hopes that it will no longer be fighting the oil leak. With relief wells currently being drilled -- after a tropical storm delay over the weekend, plans were back on track Monday -- BP hopes to have the oil leak stopped for good by mid to late August. Even with the current BP cap stopping the flow of oil into the Gulf, there had been widespread belief that it didn't make sense to replace Hayward while oil is still leaking into the Gulf of Mexico. Hayward noted in the second quarter earnings statememt the cap currently in place which has stopped the oil leak was a significant milestone for BP in the oil spill response effort.

BP CEO Tony Hayward will be on the earnings conference call on Tuesday, and the $17 billion quarterly loss will be his farewell performance. Bob Dudley had also flown to London to take part in the BP earnings call.

Amid all the talk about an American-born CEO for British Petroleum, it raises the question, Do You Think Bob Dudley is the right call as the next BP CEO? Take our poll below, to learn the consensus of TheStreet, and don't be afraid to leave a comment. After all, your comment couldn't be any worse than something Tony Hayward would say.

Do You Think Bob Dudley should be the next BP CEO?

Yes, Dudley is the right man for the job.
No, BP should have conducted an external search.
Tony Hayward should have remained as BP CEO.

-- Written by Eric Rosenbaum from New York.


Follow on Twitter and become a fan on Facebook.
Copyright 2009 Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

If you liked this article you might like

U.S. Stocks Edge Higher But Facebook Pressure Holds Tech Sector in Check

U.S. Stocks Edge Higher But Facebook Pressure Holds Tech Sector in Check

Global Stocks Steady After Tech Wipe-Out but U.S. Futures Weaken Ahead of Fed

Global Stocks Steady After Tech Wipe-Out but U.S. Futures Weaken Ahead of Fed

As Gary Cohn Stock Selloff Gets Nasty, Investors Send All Sorts of Assets Lower

As Gary Cohn Stock Selloff Gets Nasty, Investors Send All Sorts of Assets Lower

How to Invest in Oil

How to Invest in Oil

Video: 5 of the Biggest Losers From the New Tax Code

Video: 5 of the Biggest Losers From the New Tax Code