BP chief Hayward moves to draw line under Browne era

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The Independent Online

Tony Hayward, the new chief executive of BP, is making several bold moves to distance the oil company from the Lord Browne era, settling criminal charges over a fatal explosion at its Texas City refinery and cutting hundreds of jobs at its historic North Sea operations.

The company is expected to announce that it will pay a $50m fine and admit criminal wrongdoing over the March 2005 explosion that killed 15 workers, and which several independent investigations blamed on an ineffective safety culture under Lord Browne of Madingley, who stepped down as chief executive in May.

The blast was the worst industrial accident in the US in more than a decade, injuring more than 180 people and tarnishing BP's carefully cultivated reputation for environmental responsibility.

BP could announce its settlement with the US department of justice as early as today, possibly in conjunction with news of a $303m payment it has agreed to end an investigation into energy market manipulation in 2004. The company hopes the deals will allow Mr Hayward to draw a line under two of the most damaging episodes that dogged the final years of Lord Browne's leadership, although there are still more than 1,000 lawsuits outstanding against the company over the Texas City incident and a Texan attorney is trying to force Lord Browne to give evidence in a deposition.

It was unclear last night whether there would be other provisions to the settlement beyond the $50m payment, and none of the parties would comment.

Mr Hayward has also been moving swiftly to reduce what he called "unacceptably high overheads" that had crept up under Lord Browne.

The company launched consultation yesterday on cuts to staffing in Aberdeen, at the headquarters of its North Sea oil production business – on which the company's 40-year expansion into a global energy giant has been based. It said around 350 of its 2,100 onshore jobs would go by next March, but promised rig staff would not be affected.

Graham Tran, regional officer with the Amicus union, said BP must help its workers find new jobs. "We did expect job losses but clearly nothing on this scale. This is a massive and devastating blow to the employees of BP and a surprise to the industry in general," he said.

BP said staffing levels in Aberdeen had crept up to 2,100 from 1,800 three years ago, despite its North Sea oil production having dropped from 550,000 barrels a day to 350,000 over the same period.

Andy Inglis, head of exploration and production, said "the changes are intended to simplify the organisation and improve the efficiency of work processes in response to the challen-ges of the increasingly mat-ure North Sea, where declining production and rapidly rising costs have created business conditions which are not sustainable in the long term".

Mr Hayward announced this month that it would seek cost cuts across the group. Last week, it said it would relocate or axe some 7,000 staff in Chicago.