In an apparent attempt to restore BP's (NYSE:BP) reputation in the wake of the Gulf of Mexico oil spill, the company’s new incoming Chief Executive Robert Dudley has announced big changes in the company's management with an eye on improving safety standards. Although the change is a positive news coming from the Oil major in a number of months after the hard times, still experts feel that announcing changes is one thing but to actually carry out and implement the safety procedures and other changes sucessfully is a difficult and lengthy process and it remains to be seen how successful the changes might be in the long run.
Dudley has not only ousted the oil group's exploration and production chief following the Gulf of Mexico oil spill but has also appointed a new safety guru, Mark Bly, who would ensure safe practices across the organization. October 1 marks the start of BP's Year Zero, a fresh start following the capping of the Macondo well in the Gulf of Mexico. The revolution begins in exploration and production. The engine room of the UK oil major's profits is being broken into three and Andy Ingles, the director in charge, is leaving. His number two, Doug Suttles, seems likely to follow.
Although the management claims that Bly's role will be stronger than previous safety chiefs as he will have representatives in each business unit that will have the authority to intervene if they feel practices are not meeting BP's safety standards, skeptics feel that having a so called internal police force with its "expert staff" poking their noses into every operating might lead to ego clashes and conflicts in the future, things that are least required at this stage.
BP has already lost more than a third of its stock-market value since April 20, when one of its gulf wells blew out, destroying the Deepwater Horizon drilling rig, killing 11 men and triggering the worst offshore oil spill in U.S. history. BP finally killed the well earlier this month.
BP Back To Borrowing Mode: Meanwhile BP shares added 3 percent on the announcement, despite the swift denial of settlement talks with the U.S. Department of Justice after the company announced its plans to sell bonds for the first time since the oil spill in the Gulf of Mexico. The move has surprised market analysts because despite the massive cost of the spill, BP does not need to borrow money to make payments to the $20 billion escrow fund it has agreed to create to meet economic and environmental claims.
In August, BP paid a $50 million fine to the Occupational Safety and Health Administration for violations at the refinery. The probation expires in March 2012.
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