Tony Hayward’s Firing At BP: The Ghost Of Former CEO Lord Browne

BP plc’s (NYSE: BP) CEO Tony Hayward, who is about to be sacked by the big oil company, has only been in his position for about two years. That raises the issue whether he could be responsible for the culture that caused the mistakes on the Deepwater Horizon rig and whether much of the equipment used on the rig was already in service on that facility or any other before he was given the CEO’s job.

Hayward’s legacy will be based  on the same question that is often asked about presidents and prime ministers. When do the successes of their predecessors become their faults and when do the successes of past administrations stop accruing to the new administrations’ places in history?Hayward will become the fall guy for many mistakes made by the CEO before him–Edmund John Philip Browne, Baron Browne of Madingley. Lord Browne was unceremoniously pushed out of BP in 2007, mostly because of a series of awful accidents at the company’s facilities around the world. It was Browne who began to promote BP as a “green” company in 1997.

Browne’s stint as CEO included a large oil leak at the company’s Alaska pipeline facility and an explosion at one of the firm’s refineries in Texas thatkilled 15 people and injured more than 170. The trouble was compounded by the fact that the location was the third largest refinery in the US and experts wondered why BP would be so lax with safety measures.

BP was cited with dozens of violations by The Occupational Safety and Health Administration. The UK-based firm has paid over $1 billion to compensate victims and the number could grow. The Deepwater Horizon explosion was not the only significant safety issue that BP has had with the US government in the last half decade.

The Deepwater Horizon rig was built in South Korea by Hyundai Heavy Industries in 2001. The drilling at its current location began in September 2009. Transocean was the company that commissioned the building of the rig, and has operated it for close to ten years. That means that BP has not had control of the equipment for long compared to the lifetime of the rig

Hayward will be damned for two things. One is the explosion on the Deepwater Horizon followed by mamy insensitive and thoughtless comments about the event. The other is that he promised to reverse Lord Browne’s safety record.

Hayward, unlike many large company CEOs, barely got 30 months to carry out his agenda. Many of his problems were due to Browne’s mistakes. That will hardly matter in the history books, but to a large extent Deepwater Horizon belongs to Browne.

Douglas A. McIntyre