BP in management revamp as Dudley addresses safety woes

The new BP boss has introduced a new, powerful safety unit, and radically restructured its exploration business.

by James Taylor
Last Updated: 19 Aug 2013
Incoming BP boss Robert Dudley hasn’t even technically started yet, but he’s already making his presence felt: the oil giant has just announced a wide-ranging overhaul of its safety procedures, with a new safety unit that will have the power to intervene in any aspect of BP’s operations. What’s more, current exploration and production boss Andy Inglis is on his way out of the group, his empire split into three smaller divisions. It was important for Dudley (who starts officially on Friday) to do something about safety procedures straight away, to show how serious BP is about the problem. And it all looks sensible on paper – although Gulf fisherman would presumably argue that he’s shutting the gate after the horse has bolted.

BP’s new Safety and Operation Risk unit, to be headed by current safety chief Mark Bly, will be much more hands-on: apparently it will have staff ‘embedded’ (sounds painful) in every one of BP’s operating units, from rigs to refineries, ensuring that the same exacting safety standards are maintained across the board - and with the power to step in when they don’t. BP said the move ‘is designed to strengthen safety and risk management’ and ‘follows the Deepwater Horizon accident in the Gulf of Mexico’. No kidding.

The other headline news is the break-up of E&P, which is being split into three divisions: exploration, development and production. All three will be led by executive-VPs who’ll report directly to Dudley, as part of an expanded management team. But that means there’ll be no role for current E&P boss Andy Inglis, who’s going to be ‘spending more time with the family’ by the time the year is out. As the man in charge of the division that operated the Macondo oil well, he probably can’t have too many complaints – although BP was keen to pay tribute to the work he’s done since then, co-ordinating the company’s technical response.

Less high-profile, but perhaps equally significant, is Dudley’s promise to review how BP ‘incentivises business performance… with the aim of encouraging excellence in safety and risk management.’ The implicit suggestion is that he’s worried that the current set-up may encourage managers to cut corners if, for example, it saves money or time.
 
As Dudley said today, his main task is to rebuild trust in BP. Today’s changes won’t accomplish that in themselves – it’s a process that could take years and years. But this is a start, at least.

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