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London Evening Standard: New BP chief’s anger as profits slip

Robert Lea, Evening Standard
24 July 2007, 8:16am

BP boss Tony Hayward has given his new production and refining chiefs a rocket as he today admitted to the City that the oil major is failing to perform.

With profits down at the half year, production levels stagnant and refineries failing to take advantage of soaring prices, Hayward said: ‘My message today is simple: BP’s current operational performance is not good enough.’

Hayward, 50, was making his City debut after being catapulted in as chief executive earlier than expected following the shock May Day resignation of Lord Browne, who had admitted lying to the High Court over his gay lover.

Peppering his comments today with ‘disappointing’ and ‘can do better’, Hayward added: ‘BP is like a boat which is well-built but requires some essential maintenance having been through some stormy waters in the last few years.’

BP today announced second-quarter profits of just over $6bn (£2.95bn), down almost 13% year on year when stripping out one-off gains totalling $741m on asset disposals such as the Coryton refinery in Essex. For the half year, profits were 8% lower at $10.4bn.

Hayward has ordered Andy Inglis, his successor as exploration and production chief, to bring on major upstream projects more rapidly and told refining and marketing head Iain Conn, who replaced the recently quit John Manzoni, to get his US refineries back up to capacity.

With Inglis and Conn also told to shake up the transparency of the organisation and standardise their operations, Hayward has ordered 100 pen-pushing planners out of BP’s plush St James’s headquarters and back into the field as operational engineers, a reduction in head-office head count of 25%.

‘The solution is clear,’ said Hayward. ‘Restoring our operational performance is the best way to restoring our financial performance.’

While profits have been supported by near-record oil prices, operationally BP had a less-than-sparkling quarter.

Production profits slumped almost 13% with output in the second quarter of the year a shade over 3.804m barrels a day, down 5% year on year, and right at the bottom of the 3.8m to 3.9m barrels a day that Hayward has promised BP will average out at this year.

Refining and marketing profits were about 50% higher but not nearly as strong as they might have been with refining throughputs of 2.18m barrels a day, 7% lower than in 2006. and its sister websites,,,,, and are all owned by John Donovan. There is also a Wikipedia article.

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