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2nd UPDATE: BP CEO: Single Problem Could Hurt Co's Recovery

Date : 10/27/2010 @ 6:56PM
Source : Dow Jones News
Stock : BP (BP)
Quote : 50.8556  -0.5344 (-1.04%) @ 3:44PM
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2nd UPDATE: BP CEO: Single Problem Could Hurt Co's Recovery

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BP PLC's (BP, BP.LN) new chief executive, Bob Dudley, told employees Wednesday that a single problem could still jeopardize the company's operational recovery, days after making safety the sole criterion for rewarding employee performance in the fourth quarter.

"Every day we operate safely we earn more trust, but a single problem could jeopardize the recovery," Dudley wrote in an email to staff obtained by Dow Jones Newswires.

Dudley took the helm of the British oil major on Oct. 1, a little more than five months after the BP-operated Deepwater Horizon drilling rig blew up and sank, unleashing the largest offshore oil spill in U.S. history. The disaster came after a deadly explosion in 2005 at a BP refinery in Texas and a major pipeline leak in 2006 at the company's Prudhoe Bay operation in Alaska.

Earlier this month, Dudley told staff that safety would be the sole criterion for rewarding employee performance in its operating business for the fourth quarter. In his email Wednesday, Dudley said the company is "conducting a longer-term review of compensation."

While pointing out that he wants "in no way [to] minimize this year's dreadful tragedy," Dudley said "BP's overall safety record has been an improving one and many businesses have put in excellent safety performances."

He said that in Alaska, BP "achieved a 42% reduction in corrosion/erosion-related leaks between 2006 and 2009." At the Texas refinery, BP recorded a decline in Recordable Injury Frequency rate, a measurement of personal safety at work, of 0.57 in 2006 to 0.31 in 2009, Dudley pointed.

Nevertheless, problems at Texas City have persisted. Four people have been killed on the grounds of the facility since the 2005 explosion, and a malfunction in April caused a 40-day leak of chemicals into the air, triggering lawsuits from workers, nearby residents and the state of Texas. BP has denied that the chemicals posed a danger to the public.

BP officials weren't immediately available for comment.

Despite posting a huge net loss in the second quarter to pay for the spill, the company's so-called clean replacement cost of supplies--a keenly watched profit figure that has inventory changes and one-off items stripped out--rose almost 70% that quarter from the same period last year.

The company is set to report its third-quarter earnings on Nov 2.

-By Benoit Faucon, Dow Jones Newswires; +44-77-601-777-36

(Angel Gonzalez in Houston contributed to this article.)

 
 


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