TUESDAY, JULY 27, 2010


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Economy & Business A13 BP set to name American as its new chief executive


Industry veteran Dudley could ease political woes in U.S.


by Steven Mufson


For a London-based petroleum company that relies largely on oil produced in the United States and Russia, Robert Dudley might be just the ticket. BP’s board is expected to an- nounce early Tuesday that it has picked Dudley, who grew up in Hattiesburg, Miss., and later spent eight years working in Rus- sia, to become the company’s chief executive, cutting short the turbulent tenure of British geol- ogist Tony Hayward, who has been caught in the vortex of U.S. public anger over the Gulf of Mexico oil spill. The choice of the even-keeled


Dudley, who would become the first American to run the com- pany formerly known as British Petroleum, would represent a fresh start for a firm that has been soiled by the massive oil spill. “It turns a new page, and it


starts to look to the future,” said Daniel Yergin, chairman of IHS Cambridge Energy Research As- sociates. “I think Bob has both the technical competence and a broad view of the industry and where it fits into the world.” The mere prospect of Dudley becoming BP’s chief executive marks a cultural shift for a corpo- rate goliath that suffered from identity issues ever since it ac- quired three big U.S. oil firms — Amoco, Arco and Sohio — more than a decade ago. Although Brit- ish BP chiefs had shuttled back and forth by plane from their St. James Square headquarters in London to their U.S. empire, the cultural gulf proved too big. And after the April 20 drilling


rig explosion killed 11 workers and set off the largest oil spill in U.S. history, Hayward struck sev- eral wrong notes with an angry American public. On Monday, Florida Attorney General Bill McCollum (R) said that through- out the spill, Hayward “has ap- peared disingenuous, disinterest- ed, and often dismissive of what our state, our businesses and our residents are suffering.” In some ways, picking Dudley


PETER MACDIARMID/GETTY IMAGES


Robert Dudley grew up in Hattiesburg, Miss., and later worked in Russia. One former executive called him “the last, best hope for BP as BP.” on washingtonpost.com


is like reaching back to the past to move into the future. He worked for Amoco (formerly known as Standard Oil Co. of Indiana) for nearly 20 years in the United States, Britain and Russia. When BP bought the company in 1998, Dudley, then Amoco’s general manager for strategy, made the leap to BP. His U.S. background might prove an asset both to him and the company. Forty percent of BP’s shareholders live in the Unit- ed States, and BP is the largest producer of oil in the United States. With Congress contem- plating a ban on BP operating on federal lands, and with the Jus- tice Department weighing crimi- nal charges in connection with the rig blowout, Dudley’s back- ground and temperament could help BP navigate U.S. political wa- ters and protect the company’s ability to do business here. “BP has two vulnerabilities, po- litical and legal,” said Robin West, chairman of PFC Energy, a Wash- ington consulting firm. “The po- litical vulnerability is that Con-


Disputed chemical detected in receipts


by Lyndsey Layton As lawmakers and health ex-


perts wrestle over whether a con- troversial chemical, bisphenol-A, should be banned from food and beverage containers, a new analy- sis by an environmental group suggests Americans are being ex- posed to BPA through another, surprising route: paper receipts. The Environmental Working Group found BPA on 40 percent of the receipts it collected from supermarkets, automated teller machines, gas stations and chain stores. In some cases, the total amount of BPA on the receipt was 1,000 times the amount found in the epoxy lining of a can of food, another controversial use of the chemical. Sonya Lunder, a senior analyst with the environmental group, says BPA’s prevalence on receipts could help explain why the chem- ical can be detected in the urine of an estimated 93 percent of Amer- icans, according to the Centers for Disease Control and Prevention. “We’ve come across potentially major sources of BPA right here in our daily lives,” Lunder said. “When you’re carrying around a receipt in your wallet for months while you intend to return some- thing, you could be shedding BPA into your home, into your envi- ronment. If you throw a receipt into a bag of food, and it’s lying there against an apple, or you shove a receipt into your bag next to a baby pacifier, you could be getting all kinds of exposure and not realize it.” What remains unknown is how much of the chemical that may rub off onto the hands is absorbed through the skin or whether peo- ple then ingest BPA by handling food or touching their mouths. Among those surveyed, re- ceipts from Safeway supermar- kets contained the highest con- centration of BPA. Brian Dowling, a Safeway spokesman, said the company is researching the issue and consulting with its suppliers of receipt paper.


First synthesized in 1891 and


developed in the 1930s as a syn- thetic form of estrogen, bisphe- nol-A has been widely used in commercial products including plastic bottles, compact discs and


dental sealants. While it was re- garded as safe for decades, recent research using sophisticated ana- lytic techniques suggests that low doses of the compound can in- terfere with the endocrine system and cause a range of health ef- fects, including reproductive problems and cancer. Federal regulators have been


focused on BPA and whether it leaches from containers into foods and beverages at levels that may cause health problems. Earli- er this year, the Food and Drug Administration expressed “some concern” about BPA and joined several agencies in conducting $30 million in studies to try to an- swer questions about its safety. Lawmakers on the local, state and federal levels have moved to ban BPA from food and beverage con- tainers made for infants and chil- dren. The American Chemistry Council, which represents the chemical industry, said that while BPA can transfer from paper re- ceipts to the skin, the level of ab- sorption is low. “Available data suggests that BPA is not readily absorbed through the skin,” a spokeswoman said. “Biomonitor- ing data from the U.S. Centers for Disease Control shows that expo- sure to BPA from all sources, which would include typical ex- posure from receipts, is extremely low.” The Environmental Protection


Agency, however, recognizing that paper coated in BPA may be a significant route of exposure, launched an effort this month to work with paper manufacturers, the chemical industry and envi- ronmental groups to encourage companies to find alternatives to BPA in receipts. Appleton Papers, the nation’s


largest manufacturer of “thermal papers,” the type often used for re- ceipts, dropped BPA from its for- mulation in 2006 out of growing concerns about the safety of the chemical, said Kent Willetts, the company’s vice president of stra- tegic development. “We just real- ized we’d rather move away from it sooner than later,” Willetts said. The Environmental Working


Group’s report can be found online at www.ewg.org/bpa-in- store-receipts.


laytonl@washpost.com The oil spill: The latest developments


 The timetable calls for workers to be in a position Aug. 2 to begin the “static kill” of the blown-out well from the top down and then about five days later to begin the “bottom kill” via the relief well, retired Coast Guard Adm. Thad W. Allen said Monday.


 The well is being monitored through visual, thermal, seismic, acoustic and other types of readings. “These are all good indications that we have well integrity and we can move forward,” Allen said.


 The oil that has been released by the gusher is becoming harder to track and collect. “There’s still a lot of oil that’s unaccounted for if you look at the total amount that’s been released. . . . Sometimes it’s not skimmable, because it’s just a sheen. Sometimes its slightly below the surface. . . . So it’s becoming a very elusive bunch of oil for us to find and do anything about,” Allen said. — David Hilzenrath


gress wants to punish BP.” Dudley also has experience around the world. While at Amo- co, he negotiated projects in the South China Sea and in Russia. At BP, he fit in well. He played a key role in politically sensitive negoti- ations over the construction of a pipeline in Azerbaijan. Later, he ran BP’s TNK-BP joint venture in Moscow, and helped oversee im- provements in safety, accounting


and drilling practices in old So- viet fields. His five-year stint end- ed in discord with BP’s Russian billionaire partners; after being denied a visa, Dudley ran opera- tions from abroad until an accord was reached on a successor. “He has demonstrated an abili-


ty to operate successfully under pressure,” West said. “This is a guy who has really been battle- tested twice.”


Oil spill victims discuss the impact of the disaster on their lives; BP readies for life after Hayward. washingtonpost.com/oilspill


A source close to the Russian


partners in TNK-BP said that the dispute in Russia arose because “we felt our strategies were di- verging. It had nothing to do with Dudley. He’s a competent manag- er and has the potential to be a successful CEO. We partner with institutions, not individuals. Whoever they pick is their deci- sion.” People who know and work with Dudley say he has weathered past battles calmly. Yergin de- scribed him as “very steady — he makes people around him calm.” People who have worked with him at BP use phrases like “very level-headed.” One former exec- utive called him “the last, best hope for BP as BP.” But Dudley faces a gargantuan challenge. BP is fighting for its survival while trying, in Hay-


ward’s phrase, to “make things right” in the Gulf of Mexico. The company is on the hook for one of the largest environmental cleanup operations in history. On Tuesday, the company releases earnings and it will unveil its best estimates of what it will need to set aside. The profits from opera- tions are expected to top $5 bil- lion — but BP has spent $4 billion already to contain the oil spill, has pledged to set aside $20 bil- lion in an escrow account, and faces unquantifiable liabilities in lawsuits from fishermen, holiday hotel owners and tourism busi- nesses across the Gulf Coast. Since late June, Dudley has


been setting up a separate BP unit to deal with the cleanup efforts. He has cited it as a sign of BP’s long-term commitment as well as away to allow other people in the company to focus on their busi- nesses. In doing so, he’s made the rounds of Gulf Coast politicians. “We have gotten to know Bob during his recent assignment on the Gulf and would wish him well on any new assignment,” Louisi- ana Gov. Bobby Jindal (R) said in an e-mailed statement. “But as we’ve said before, it doesn’t mat- ter to us who is running the com- pany as long as BP fulfills their duties as the Responsible Party to restore the damage caused to our ecosystem, coastal communities and industries.” Jindal added that “we still have outstanding re- quests for BP.” Meanwhile, Hayward, who spent his entire career at BP, will step down Oct. 1 and leave the company’s board at the end of the year, said a source familiar with Hayward’s talks with the board. He will become one of four BP di- rectors on the board of TNK-BP, according to the Associated Press. The TNK-BP directors meet about half a dozen times a year. To some, the appointment looks like banishing Hayward to Siberia. But it keeps Hayward in- volved in an important and lucra- tive venture, one that could use his experience because TNK-BP’s next operating chief is a young Russian oil entrepreneur still get- ting training. A source close to the Russian shareholders said Monday that they “would actually welcome him [Hayward] on the board.”


mufsons@washpost.com


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