2nd UPDATE: BP CEO: Single Problem Could Hurt Co's Recovery
October 27 2010 - 06:56PM
Dow Jones News
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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