BP said on Tuesday that it had set aside $32.2 billion to pay for the biggest offshore oil spill in United States history.
But the company acknowledged that its costs might be much higher — especially if it was found grossly negligent, criminally liable or was faced with a huge jury award for punitive damages in connection with the April 20 Deepwater Horizon disaster, which killed 11 people and sent millions of barrels of oil gushing into the Gulf of Mexico.
The financial hit will be reduced by a $10 billion tax credit the company is entitled to receive for its spill costs.
To improve its future flexibility, BP outlined a program to triple its planned asset sales to raise as much as $30 billion and halve its debt. BP also confirmed that Robert Dudley, the American in charge of its spill response in the gulf, would replace Tony Hayward as chief executive on Oct. 1.
Although the new BP will be a leaner company that produces about 12 percent less oil than it does today, the moves do not amount to a radical transformation of the company, which has suffered a series of accidents in the last five years. Instead, they show how BP hopes to ensure it will survive this latest crisis and continue to compete on an equal footing with the world’s top producers.
The change in leadership did not alter the tone at the top of the company. On Tuesday, Mr. Dudley, just like Mr. Hayward, insisted that BP had not been negligent in its offshore operations.
“It’s a very complicated industrial accident,” Mr. Dudley said during a telephone interview with reporters. It resulted from “a series of individual misjudgments by very experienced people and a multiple series of failures of equipment and processes of using equipment that is going to involve multiple companies here.”
Mr. Hayward made much the same argument, hitting back at other oil companies that had distanced themselves from BP by criticizing its choice of a cheaper and riskier well design. “I genuinely believe that there are some issues the industry needs to reflect on, such as the extent it pushed technology and procedures,” he said.
The new strategy reverses years of rapid growth at BP, which transformed itself in recent years from a midsize European company into a worldwide rival of Exxon Mobil and Royal Dutch Shell. BP said the planned asset sales would be focused mainly on its upstream business, which includes oil and gas production platforms, and leave it with a smaller portfolio of higher-quality exploration and production assets.
BP has already agreed to sell gas fields in Canada, Egypt and Texas to the Apache Corporation for $7 billion, and is negotiating the sale of its operations in Vietnam and Pakistan, Mr. Hayward said. The company is also exploring the sale of its interests in its Alaskan oilfields and Pan American Energy in Argentina, according to people with knowledge of the discussions.
Using proceeds from the asset sales and its strong cash flow, BP plans to reduce its debt, now about $23 billion, to $10 billion to $15 billion within 18 months.
The big wild card, however, is the company’s ultimate financial liability for the oil spill.
BP’s $32.2 billion provision for spill costs, which includes a $20 billion fund for damages that was established under pressure from the White House, provides a window into the company’s view of the spill’s impact.
BP’s damaged well spewed 35,000 to 60,000 barrels of oil a day until it was capped on July 15, according to government estimates. To help calculate its liability, BP said it took a midrange point from that government estimate, and assumed a fine of $1,100 for each barrel spilled, which is the standard civil penalty under the Clean Water Act.
But analysts said the final penalty was likely to be much higher. If the company were found guilty of gross negligence under the Clean Water Act, its penalty would be $4,300 a barrel. In that case, Credit Suisse analysts estimated that BP’s fines would increase by $12.6 billion.
BP could also face various other criminal charges and penalties. “As the various investigations on the causes of the accident progress, we see risks that BP may take further provisions in following quarters,” Kim Fustier, an analyst at Credit Suisse, wrote in a research report.
BP admitted there remained considerable uncertainty surrounding the final costs. The company noted that “it is not possible to measure reliably any obligation in relation to future claims, including natural resource damage.”
BP’s provision for spill costs led to a record loss of $17 billion for the second quarter, in contrast to a $4.4 billion profit in the quarter a year ago.
Some analysts said they were not surprised that BP executives were being cautious in their public statements. “If BP admits openly that they are 100 percent responsible for what happened, that opens up the door to unlimited liability,” said Kenneth B. Medlock, an energy economist at Rice University. “You are not going to hear them say, ‘We were negligent.’ ”
BP also said it expected to recover money from its partners on the well — Anadarko Petroleum and Mitsui Offshore Exploration, which together hold 35 percent of the well. BP has billed them $1.4 billion so far, but the partners are withholding payments until the investigations are completed.
Mr. Dudley said the company would focus on improving its operations. “We will look at what we have learned from this incident,” he said. “We will look at our culture and our safety and operations.”
Mr. Hayward, who angered American policy makers and gulf residents with his handling of the spill, said his departure would allow BP to repair its reputation. “For it to move on, particularly in the U.S., it needs a new leadership,” he said.
When he leaves, Mr. Hayward, 53, will get one year of salary as severance, or about $1.6 million. He will also get an annual pension of about $932,000, from a fund worth about $17 million, which he amassed over his 28 years at the company. BP said it planned to nominate Mr. Hayward as a director of TNK-BP, its Russian joint venture.
Asked how he felt about the oil spill, Mr. Hayward said that the company had worked hard to improve its safety standards in the last three years. But, he added, “sometimes you step off the pavement and get hit by a bus.”