Lawmakers accused BP Chief Executive Tony Hayward of evasion and ducking responsibility for the worst oil spill in U.S. history when he appeared before them on Thursday to answer charges his company cut corners on its blown-out Gulf of Mexico well.
In his first appearance before Congress since the start of the 59-day-old crisis, a tired-looking Hayward sat alone at the witness table as lawmakers took turns during more than three hours of questioning to lambaste the British energy giant.
Under your leadership BP has taken the most extreme risks, Democratic lawmaker Henry Waxman told Hayward, who sat impassively during the lawmakers' barrage.
BP cut corner after corner to save a million dollars here and a few hours or days there, Waxman said, his comments reflecting public anger over BP's handling of the crisis.
Hayward, a 53-year-old geologist with a reputation for blunt speaking, kept largely to a well-rehearsed brief and repeatedly declined to go into detail pending the results of investigations into the spill. He said it was too early to conclude the company had cut corners.
Waxman snapped back, saying, You are not taking responsibility. You are kicking the can down the road.
Several lawmakers grew visibly annoyed by Hayward's answers, accusing him of evasion and telling him they were less interested in his expressions of regret and more concerned about finding out what had gone wrong.
The Briton said he had seen no evidence of reckless behavior and repeatedly said he was not involved in the decision-making about the methods used to dig the well. I am not stonewalling, Hayward said at one point.
Hayward's careful replies may have been a reflection of the fact that company still faces a criminal investigation and lawsuits that could lead to it paying out billions of dollars.
Investors welcomed the deal BP reached with the White House on Wednesday setting up a $20-billion fund for compensation claims arising from the spill. It gave them a clearer picture for the first time of the potential costs facing BP.
But equity analysts and credit ratings agency Standard & Poor's downgraded BP on Thursday, citing growing liabilities and the White House deal as a competitive disadvantage.
BP might try to sell $5 billion to $10 billion in bonds next week -- not because it needs the money but to boost investors' confidence by showing it can pull off a big deal even amid the political storm, CNBC reported. BP declined to comment on the report.
Hayward's opening statement to the hearing, in which he said he was deeply sorry for the spill, was interrupted by a protester with her hands painted black and who yelled, You need to be charged with a crime, Tony. You need to go to jail. She was hustled out of the chamber by police.
Hayward told lawmakers BP was doing everything possible to contain the spill. It was triggered by an explosion on an offshore rig on April 20 that killed 11 workers and ruptured its well, unleashing a torrent of crude into the Gulf.
The Obama administration's point man for the disaster, Admiral Thad Allen, told reporters BP was ahead of schedule in drilling a relief well to permanently cap the blown-out well. But he said he could not guarantee it would be finished before its scheduled completion date in August.
The spill has soiled 120 miles of U.S. coastline, threatened multibillion dollar fishing and tourism industries and killed birds, dolphins and other sea life.
BP IGNORED WARNINGS
Lawmakers have said BP ignored warnings from contractors and their own employees and chose faster and cheaper drilling options that increased the danger of the well rupturing.
Executives from other major oil companies distanced themselves from BP at an earlier congressional hearing this week, saying BP had failed to adhere to industry standards in the construction of its Macondo well in the Gulf of Mexico.
Under harsh questioning from lawmakers on Thursday, Hayward urged them to await the outcome of an investigation into the spill and defended his three years as CEO. He said he had made dramatic safety improvements but conceded more could be done.
As he spoke, a live video feed on BP's website showed black crude continuing to gush into the Gulf from under a containment cap that has been placed on top of the leak to try to siphon off the oil and channel to a ship on the surface above.
Environmentalists worried that the political theater playing out on Capitol Hill was taking the focus off the disaster confronting Gulf Coast communities.
This oil is already into the wetlands and more is coming up every day. You cannot clean it out of there. The impact of the spill are going to be felt for decades, John Hocevar, a marine biologist with Greenpeace, told Reuters in Louisiana.
REPUBLICAN POLITICIAN APOLOGIZES
During Thursday's hearing, Republican congressman Joe Barton of Texas, the biggest recipient of oil and gas industry campaign contributions, stunned fellow lawmakers when he apologized to Hayward for the $20 billion escrow account the White House pressured the company to agree to.
I think it is a tragedy of the first proportion, that a private corporation can be subjected to what I would characterize as a shakedown, a $20 billion shakedown.
Hours later, Barton retracted his statement, after Vice President Joe Biden condemned the comments as outrageous and Republican leaders of the House of Representatives issued a joint statement denouncing them.
In London, the company's stock closed up nearly 7 percent, catching up with gains notched in the U.S.-listed shares on Wednesday after BP's deal with the Obama administration gave investors enough clarity on liabilities to offset disappointment about a suspended dividend.
The stock lost some of those gains in New York trading, dropping about 1 percent as lawmakers questioned Hayward.
Investors need to think of it as a speculative investment at this point, Brian Youngberg, energy analyst at investment firm Edward Jones said of BP's shares. You're getting no income, and you're hoping things go better.
Financial analysts BofA Merrill Lynch and Seymour Pierce downgraded BP from their top ratings following the announcement about the escrow account.
While Hayward was testifying in Washington, BP continued to siphon off oil from its ruptured well in the Gulf.
BP is boosting its oil-containment effort after activating a new oil-burning system on Wednesday. Siphoning capacity will hit 28,000 barrels per day early next week, versus the 18,600 barrels that BP trapped on Wednesday, Allen said.
(Additional reporting by Jeffrey Jones in Louisiana, Deborah Zabarenko, Timothy Gardner, Alina Selyukh in Washington, Kristen Hays in Houston, Raji Menon and Sarah Young in London, Writing by Ross Colvin, editing by David Storey)