Bob Dudley announces big changes at BP"

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September 29, 2010

Bob Dudley shakes things up at BP

BP is to create a new safety division that it says will have sweeping powers to oversee and audit the company's operations around the world. The new unit is being created as part of a series of changes being made in the wake of the Deepwater Horizon disaster.

As a result of the shake up, Andy Inglis will no longer head BP's Upstream business. By mutual agreement with the BP board he will step down as a main board director on October 31 and will leave the company at the end of the year.

incoming chief executive Bob Dudley said: "Andy has played a critical part in the re-shaping of the Upstream business which we are announcing today and is remaining with BP over the coming months to help with the transition to the new organization."

BP chairman Carl-Henric Svanberg said that Mr. Inglis had "worked tirelessly at the head of a great team to seal the Macondo well. For that, and for his insightful participation in reorganizing our upstream business to face the challenges ahead, he has our gratitude."

BP is to re-structure its Upstream segment from a single business into three functional divisions - Exploration, Development and Production - and to carry out a detailed and wide-ranging review of how it manages third-party contractors.

It will also conduct a fundamental review of how it offers incentives for business performance, including reward strategy, with the aim of "encouraging excellence in safety and risk management".

The new Safety & Operational Risk unit will have authority to intervene in all aspects of BP's technical activities.

It will have its own staff embedded in BP's operating units, including exploration projects and refineries. It will be responsible for ensuring that all operations are carried out to common standards, and for auditing compliance with those standards.

Designed to strengthen safety and risk management across the BP group, the unit will be headed by Mark Bly and report directly to Mr. Dudley, who take over his new role on October 1

Mr. Dudley said the change announced today "are the first and most urgent steps in a program I am putting in place to rebuild trust in BP."

"The changes are in areas where I believe we most clearly need to act, with safety and risk management our most urgent priority," he said.

Mr. Dudley said the re-structuring of the Upstream business into separate functions would foster the long-term development of specialist expertise and reinforce accountability for risk management. The new divisions of Upstream will be led by three executive vice presidents: Mike Daly heading Exploration, Bernard Looney in charge of Development and Bob Fryar responsible for Production. Together with Andy Hopwood who becomes executive vice president for Strategy and Integration, they will join an expanded top management team reporting directly to Mr. Dudley.

Mr. Svanberg added: "I believe the changes which Bob is introducing today are vital steps in the rebuilding of confidence and trust in the company. I recognize there are still difficult challenges ahead. But we have assembled a strong and able new team and are developing a robust strategy to deal with them and to deliver our ultimate goal - the restoration of shareholder value."


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