Monday, November 26, 2012

BP plc (NYSE:BP) Reorganizes Its Oil Production Division

BP plc (ADR)(NYSE:BP) uncovered a reorganization of its oil and gas production operations on Friday, reversing a change that it had imposed after the Gulf of Mexico oil spill had taken place.

The most recent move is taken partly to free Chief Executive Bob Dudley up from close supervision of day-to-day operations so that he can contribute in BP’s recovery process from the catastrophe that had taken lives of 11 men and spilled around 5 million barrels of crude oil into the sea.

Shares of BP have not been successful to recover since the Macondo well was capped and Dudley has been criticized for failing to be in touch for a plan for expansion.

The current head of BP’s operations in the US, Lamar McKay, will soon become the head of a new exploration and production wing called Upstream. The reinstatement of a role was abolished in the year 2010.

Like Dudley, McKay is former executive from Amoco. Amoco is the same company that BP had taken over in the year 1997 and joined the top tier of the oil industry. The British company had thereby joined the league of one of the top three biggest.

BP had plans of announcing his appointment privately sometime during next week but brought forward the declaration after a Reuters’ story had spilt beans regarding the plan.

Directors of BP had agreed upon the reorganization some months back, as per two sources. However, they wanted to delay the announcement until it had made more progress with the US authorities on settling probes regarding the oil spill.

The company had mentioned last week that it would pay $4.5 billion as penalty and plead responsible of criminal misconduct. A US government civil probe could also result in fines of $20 billion extra. Also, two BP engineers may face manslaughter accusations associated with the rig blast that resulted in the oil spill.

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