BP is trying to make amends for Gulf spill

Former BP chief executive officer Tony Hayward has been described as a "good oil-man with bad public relations" — the same can be said about the whole company.

When it announced its results yesterday, BP revealed that the cost of cleaning up the oil spill in the Gulf of Mexico was $32.2 billion (Dh118.4 billion), including $20 billion set aside for compensation claims. As a result, the company has booked a loss of $17 billion for the three months between April and June.

Without the oil spill costs, BP made a second quarter profit, on a replacement cost basis, of $5 billion, compared with $2.9 billion for the second quarter of 2009. Despite the uproar around the oil spill, BP is a strong company that makes a lot of money with its core businesses.

The company was also forced to sacrifice Hayward, who had done much to strengthen its finances and had committed to improving its safety record. Hayward slipped up on public relations while handling the disaster. Initially he did not empathise enough with residents affected by the spill and seemed to lack any sense of personal or executive responsibility for the mess.

As a chief executive of a global corporation, Hayward should have known the importance of communicating effectively with the public, but many of the criticisms heaped on him have been unfair, especially those from US politicians who were more interested in scoring points than making a reasoned assessment of what went wrong. Now, BP has given Hayward a golden handshake that reflects his years of service and is using his expertise to look after its strategic investments in Russia.

The BP board has taken some hard but necessary decisions to contain the damage to the company caused by the oil spill. Robert Dudley, the next chief executive, now has an opportunity to plot a new course for BP.