BP’s point man tries to polish tarnished image


Meet BP’s Bob Dudley, the human relief well.

This week the Mississippi-bred, wispy-haired Dudley has been paraded through the Gulf coast, the White House and press corps as the new face of BP’s fight to contain the damage the oil spill has unleashed on U.S. shores — and the company’s reputation.

One week after BP chief executive Tony Hayward endured a tongue-lashing at a House committee hearing, returned to England and made headlines by going sailing on his yacht, Dudley has stepped in to speed up plans for a free-standing BP unit that will be devoted entirely to repairing the Gulf environment.

But it will take more than Dudley’s calm demeanor and American accent to clean up BP’s image, which has been blackened by the relentless video of oil gushing into the Gulf of Mexico, the widening damage to the environment and reams of damning documents about the rig accident that triggered the spill.

Even Dudley realizes that. “We can understand why the nation is angry with BP,” he told a group of reporters Thursday. He added, “until we close the well off, I think there’s a period here where its going to be very difficult to restore BP’s reputation.”

For now, Dudley’s task is more concrete. Since the April 20 blowout, hundreds of BP employees have been rushed to the Gulf coast to do everything from consulting on ways to plug the leak to coordinating cleanup. Now BP wants some of them to go back to their regular jobs, while hiring outsiders who might be better suited to running a cleanup operation.

Fixing up disasters, Dudley said, “is not a core competency with us.” He said that he hoped to bring in James Lee Witt, who was director of the Federal Emergency Management Agency under President Bill Clinton.

“Our intention is to restore the Gulf to the way it was before this happened,” he said. It is a task that many environmentalists say might not be possible.

Dudley will report to Hayward, who will return to running the rest of the company after devoting the past two months to the spill. “BP is a big organization around the world, and it needs guidance,” Dudley said. Hayward is supposed to travel soon to Russia, where BP has a large, lucrative joint venture. “I’m sure he’ll be back to the U.S.,” Dudley said. “I just can’t tell you when.”

Dudley said that by setting up a dedicated division for the oil spill, BP was making a long-term commitment, not limiting its liabilities. He said all 33 claims offices would remain open and be used by Kenneth Feinberg, administrator of the new $20 billion escrow fund set up at the White House’s behest last week.

He said he would support changes such as adding blimps to help guide skimming boats to oil sheens in the Gulf and paying business claims a month in advance rather than retrospectively so businesses in the region could function better. He also said that BP had “reached out” to the family of a fishing boat captain who committed suicide. Calling it “shocking” and “terribly tragic,” he said the company would provide financial support.

Though BP announced three weeks ago that it intended to set up an oil spill unit, administration officials at the White House meeting last Wednesday asked that the plan be put into effect immediately, Dudley said. He will be a key link between BP and the administration. In a meeting Thursday, Environmental Protection Agency administrator Lisa Jackson told Dudley that she wanted additional tests near the spill site. Interior Secretary Ken Salazar talked about what progress was required before the deepwater drilling moratorium is lifted.

Born in Queens, N.Y., to a Navy officer, Dudley moved to Hattiesburg, Miss., at age 5 when his father became a professor at the University of Southern Mississippi. Dudley says “all my childhood memories are from there.” He spent summers on the coast.

A chemical engineer, he worked for 19 years at Amoco, which in 1998 was taken over by BP. At BP, Dudley worked on strategy and became one of then chief executive John Browne’s “turtles,” executive assistants who were groomed for higher posts. In 2003, Dudley moved to Russia to take over TNK-BP, a lucrative joint venture with Russian partners.

“Straightforward, honest and reliable,” said a U.S. businessman who knew Dudley in Moscow. “Very level-headed,” said a former BP employee in Washington.

In Moscow, Dudley improved TNK-BP’s performance, oil experts say. He boosted production at old fields that had been mismanaged during the Soviet era. He tightened procurement rules and tried to impose international standards of corporate governance.

“It’s recognized by many people in the industry that by many measures of technical and financial performance TNK-BP did very well during Bob’s tenure,” said Ed Verona, president of the U.S.-Russia Business Council and a former Exxon executive.

But the stint ended on a sour note as the Russian partners sought more authority and a reduction in the number of expatiates, mostly former BP employees, who had generous pay packages. An American lawyer who has had extensive dealings in Russia, said it was a question of which of the two equals in the venture was more equal than the other. A fight over visas ensued, and Dudley hurriedly left the country in July 2008 before his own visa ran out.

One of the Russian partners at the time blamed Dudley. “Bob Dudley took the position that it’s all or nothing. My way or highway,” said Stan Polovets, chief executive of AAR.

To many American companies, however, Dudley had been a victim of Russian tycoons who had the support of portions of the state apparatus. At the end of 2008, Dudley gave a speech to the U.S.-Russia Business Council and received a standing ovation. An executive from a rival oil company stood and paid tribute to his performance.

Most recently, Dudley has worked out of BP headquarters in London. On May 1, during a visit to India, he received a call to help with the spill response; now, he said, he will live out of a suitcase.

Like Hayward, Dudley said he didn’t have an opinion about the cause of the oil spill. “I haven’t read even our internal investigation on this,” he said. He noted, however, that many people weren’t waiting for the investigations to be complete. “There is sort of a rush to justice,” he said.

“The oil industry has been an unpopular industry in the United States for a long time, yet it employs hundreds of thousands of people and pays billions of dollars in taxes,” Dudley said. The spill has magnified that antagonism, he said.

“Until we cap the well,” he said, “there’s an infinite amount of uncertainty.”

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Stuart H. Smith is an attorney based in New Orleans fighting major oil companies and other polluters.
Cooper Law Firm

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