CHANGING CEO - IS IT EFFECTIVE.....

Delta Management Team - Shinoj

The spill was "relatively tiny" compared to the "very big ocean."  I want to end this disaster because "I'd like my life back."  This was the kind of response to an oil spill that killed eleven men and poured 200 million gallons of oil into the Gulf of Mexico. No wonder these two statements expedited exit of BP CEO Tony Hayward.

Dudley’s lead position in managing the oil-spill-response efforts helped him develop a better rapport with U.S. officials than Hayward and thus a natural choice for CEO post. This perhaps was one fo the move to solve the GOM crisis; yes I do admit it was the worst BP has ever faced. Robert Dudley was the CEO of TNK-BP. His tenure didn’t go very well and he had to resign from his post on 4 September 2008 due corporate dispute between BP and AAR on future strategy and corporate governance.

Although the new CEO posting did help BP on GOM oil spill but it ran into trouble with Rosneft Arctic deal in Russia. BP was trying to go alone with Rosneft but AAR quoted violation of agreement and argued for an equal share in the deal. So BP only gets half of whatever the exploration is. One of the main reasons seems to be BP CEO. With Dudley’s track record with TNK-BP it seemed BP was never going to get a better deal. Latest news suggests that BP has agreed for an equal share in exploration even though TNK-BP has no deepwater experience.

So did the change in CEO/Leadership really help BP? I think if BP management had looked into the larger picture and decided on appointing the new CEO, things could have gone well with GOM crisis and Rosneft. If ever BP gained in GOM crisis by appointing Dudley, it did have a major negative impact on the Rosneft deal. Dudley will have performed his task (managing the oil-spill) to the fullest as the ‘focal point’ of disaster management  team and delivered the same results. Rosneft deal is seen as a major investment comeback after selling major assets to deal with the aftermath of the Gulf of Mexico oil spill. Deal could have been better for BP if a CEO with clean background was appointed rather than Dudley who already had run into trouble in Russia. Moving Hayward might have been the best thing to do but certainly not appointing Dudley.