BP Choosing Safety Over Output After Gulf Spill, Dudley Says
BP Plc (BP/), operator of the Macondo well that exploded in the U.S. Gulf of Mexico last year, is focusing on safety and technology instead of how many barrels of oil it produces.
“We are emphasizing quality over quantity and value over volume,” Chief Executive Officer Robert Dudley said today in a speech at CERAWeek, a Houston conference held by IHS Cambridge Energy Research Associates. “BP is sorry, BP gets it and BP is changing.”
Dudley, the first American CEO of London-based BP, said the company is linking compensation to areas including safety, risk management and compliance. BP said last week that two directors got 30 percent of their target bonuses following the Gulf catastrophe, while the rest of the company received none.
BP has a 65 percent stake in the Macondo well that exploded last April, killing 11 workers and causing the biggest offshore spill in U.S. history. BP has taken a charge of about $41 billion in expectation of possible liabilities, Dudley said. The company reported its first annual loss in two decades for 2010.
BP continues to plan for $60 to $90 a barrel oil, with a base case of $75, Dudley said. Crude oil for April delivery dropped 42 cents to settle at $105.02 a barrel on the New York Mercantile Exchange. The contract ended yesterday at $105.44, the highest settlement since Sept. 26, 2008. Futures are up 28 percent from a year ago.
“We’re not going to get exuberant, we’re going to stay conservative right now, but we’ll watch all this very carefully,” Dudley told reporters after his speech.
To contact the reporters on this story: Edward Klump in Houston at eklump@bloomberg.net; Michael Lee in Houston at mlee326@bloomberg.net
To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net
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