Oil giant BP Plc launched a plan to repair its battered image in the United States on Tuesday, ditching its gaffe-prone chief executive and promising to slim down by trebling an asset sale target to $30 billion.
However, the company, the target of public anger over its Gulf of Mexico oil spill, tempted further ire by denying it needed cultural change and offsetting the costs of the spill, including expected fines, against its taxes.
The tax move will cost the U.S. taxpayer almost $10 billion.
BP said Tony Hayward would stand down in October, to be replaced by American Bob Dudley, as it unveiled a $17 billion quarterly loss due to the costs of the biggest oil spill in U.S. history.
I believe that it is not possible for the company to move on in the United States with me remaining as the face to BP, Hayward told reporters on a conference call.
So I think that for the good of BP, and particularly for the good of BP in the United States, it is right for me to... step down.
BP Chairman Carl-Henric Svanberg said the company would take a hard look at itself in the aftermath of the spill: BP... will be a different company going forward.
However, Dudley denied BP's culture contributed to the disaster in the Gulf of Mexico and said the company would continue to target the industry's harder projects.
Investors and analysts say BP's culture encourages greater risk-taking than some rivals, contributing to a more entrepreneurism and higher returns. But critics have also blamed this culture for the explosion on the Deepwater Horizon which killed 11 workers and led to the spill.
A total change in the culture of this company is necessary, Democratic Congressman Ed Markey said on CBS's The Early Show on Monday.
BP's leaking well was capped a fortnight ago after gushing up to 60,000 barrels per day into the Gulf, ruining fishing and tourism industries, and polluting the shoreline with slimy goo.
Svanberg said he had no intention of resigning and that no one on the board had suggested he should, despite some investors claiming he did too little to help defend BP against critics.
BP shares traded up 0.26 percent at 0816 GMT, against a flat oil sector. Investors had cheered reports of Hayward's imminent departure on Monday, sending BP shares up nearly 5 percent in London and New York.
Around $70 billion has been wiped off the London-based company's market value since the rig blast.
BP said it planned to sell assets worth up to $30 billion over the next 18 months, generating cash to pay for its liabilities and also creating a leaner company with the potential for higher growth.
Overall we see BP being reinvigorated by the new strategy in play, a new CEO and the worst news for the company concerning U.S. GoM (Gulf of Mexico) costs now being out there, Jason Kenney, oil analyst at ING in Edinburgh, said.
Aside from the oil spill, BP's business is steaming ahead with underlying profits up 77 percent on the second quarter of 2009, thanks to higher oil and gas prices and better refining margins.
Excluding a $32.2 billion charge for the disaster and other non-operating costs, the replacement cost profit was $4.98 billion, in line with the average forecast from a Reuters poll of 11 analysts.
Replacement cost profit strips out gains or losses related to changes in the value of fuel inventories and as such is comparable with net income under U.S. accounting rules.
BP could begin the final procedure to kill its leaking well late next week, the U.S. spill response official said on Monday.
That will involve pumping mud and cement through a relief well that has been drilled since May 2 to a spot close to the bottom of the damaged well.
Some Gulf Coast residents, seething about damage from the spill and BP's compensation process, said they would be happy to see Hayward go.
He will not be missed, said Larry Hooper of Empire, Louisiana, who runs an offshore fishing charter business.
Dudley, 54, who was raised in Mississippi, would be the first non-Briton to become chief executive of BP.
He was previously head of BP's Russian joint venture, TNK-BP, until he was forced to flee the country amid a spat between BP and its partners.
Hayward will receive one year's salary or 1.045 million pounds ($1.61 million) and be appointed a non-executive director at TNK-BP as part of his departure deal. He will also keep his pension pot of around 11 million pounds.
The CEO was pilloried in the United States for complaining he wanted his life back weeks after the deadly rig explosion.
Hayward may still not escape another round of testimony before the U.S. Congress. Senator Robert Menendez said he wants Hayward to testify on whether BP influenced the release of the convicted Lockerbie bomber to aid the firm's business interests.
Tony Hayward, regardless of his status whether he is going to be the CEO tomorrow or not, we believe that he was in the midst of the negotiations with the Libyans as it related to this oil deal, Menendez, a Democrat, said in New York.
Hayward is the third of the last four BP chief executives forced into an early exit. John Browne left after lying in court papers about a gay love affair and Bob Horton was pushed out over strategic disagreements in 1992.
(Additional reporting by Kristen Hays in Houston, Rachelle Younglai in Venice, Louisiana, Angela Moon and Daniel Trotta in New York, and Paul Hoskins in London; Writing by Michael Shields and Tom Bergin, Editing by Lin Noueihed)