New BP boss moves to tackle disaster-prone performance
30 Sep 2010
London – BP has set up the Safety Operational Risk division, with a remit to intervene in all safety-related aspects of BP’s technical activities.
The move is in intended to stop the group adding further to its list of major industrial accidents, which includes the recent Gulf of Mexico disaster, as well as in Alsaska and at Texas City.
The new unit will have “expert staff” embedded in BP’s operating units, including exploration projects and refineries. They are to ensure that all group operations are carried out to common standards, and will audit compliance with those standards.
BP is also to re-structure its Upstream segment from a single business into three functional divisions - Exploration, Development and Production - and to carry out a major review of how it manages third-party contractors.
The group will also conduct a fundamental review of how its incentivises business performance, including reward strategy, with the aim of encouraging excellence in safety and risk management – BP executives have in the past been accused of putting too much pressure on its managers and workers to meet profit targets at the expense of safety.
“These are the first and most urgent steps in a programme I am putting in place to rebuild trust in BP,” announced Dudley. “The changes are in areas where I believe we most clearly need to act, with safety and risk management our most urgent priority.”
In a message to BP staff worldwide, Dudley said: “This is a deeply challenging time for BP. The Macondo incident was a tragedy that claimed the lives of 11 people, caused injury to many others and had a widespread environmental impact.
“Our response to the incident needs to go beyond deepwater drilling. There are lessons for us relating to the way we operate, the way we organise our company and the way we manage risk.”
The re-structuring of the Upstream business into separate functions is intended to foster the long-term development of specialist expertise and reinforce accountability for risk management.
Another casualty of the Gulf of Mexico disaster will be Andy Inglis, who will follow his former boss Tony Hayward out the BP door. The former head of exploration and production is to leave at the end of the year: relinquishing his current role as head of the Upstream business and stepping down as a main board director on 31 Oct.
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 Dudley.
