Brand New Safety Day for BP?

Maybe BP really is changing. Spending more than $30 billion overall to compensate Gulf Coast residents, clean up spilled oil, settle its dispute with OSHA, and run a host of earnest TV ads may have caused a change of heart, in terms of safety. Or maybe watching as the board cut CEO Tony Hayward loose sent the message.

For whatever reason, Bob Dudley, the man taking over Oct. 1 as CEO, on Wednesday said safety is at the core of his plan for BP's revival.

Dudley announced a new Safety & Operational Risk unit that will have the authority to intervene in all technical activities, will have expert staffers within BP operating units (including exploration projects and refineries), will guarantee all operations follow common standards, and will audit compliance with those standards. The unit's chief, Mark Bly, will report directly to Dudley.

Dudley also announced BP is restructuring its upstream segment from one business into three divisions -– Exploration, Development, Production –- and will conduct a thorough review of how it manages third-party contractors. He said BP Group will review how it incentivizes business performance as a way of encouraging excellence in safety and risk management.

"These are the first and most urgent steps in a program I am putting in place to rebuild trust in BP: the trust of our customers, of governments, of our employees, and of the world at large," Dudley said. "That trust is vital to the restoration of shareholder value which has been so adversely affected by recent events. The changes are in areas where I believe we most clearly need to act, with safety and risk management our most urgent priority."

Andy Inglis, who now leads the upstream unit, is leaving BP at the end of 2010. "Andy has been a strong leader of the segment for three years and a huge contributor to the board of BP," said the company's chairman, Carl-Henric Svanberg. "Over the recent months he has 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."

Posted by Jerry Laws on Sep 29, 2010