BP braces for a shake-up at the top

are braced for a clear-out of BP’s leadership once its leaking oil well in the
Gulf of Mexico is capped, which could come in the next few weeks, according to
several leading shareholders and people close to the group.

Henric Svanberg, the Swedish chairman, is being singled out for criticism by
shareholders for his perceived lack of decisive leadership during the crisis
and his failure to support Tony Hayward, the embattled chief executive.

there is more support for Mr Hayward, investors are resigned to his departure
as part of a comprehensive plan to restore the company’s reputation and protect
its independence. One top 10 UK shareholder said: “When this is over there will
be a full investigation, and we would expect some action to replace the top

management shake-up could be rolled up with a capital raising such as a bond
issue or an investment from a strategic shareholder, according to one person
close to BP.

for change is building in the run-up to BP’s second-quarter earnings on July
27, when the company will make a statement about the liabilities it faces as a
result of the spill, likely to run into tens of billions of dollars.

decisive action to set the company on an even keel, BP could be vulnerable to
an opportunistic bid from a rival such as ExxonMobilor Royal Dutch Shellor an
approach from a Chinese group such as PetroChina, according
to one person working on the company’s strategy.

critical point for the company will be when the relief wells allow the leaking
Macondo well to be killed, which is scheduled for August. That will end much of
the uncertainty about the costs that BP will face and should enable the company
to regain the initiative, helped by a management shake-up.

UK investors, including M&G and Standard Life Investments, have expressed
support for Mr Hayward, who has been vilified in the US. Most large
shareholders say a change of chief executive would be disruptive while BP is
still battling to plug the well.

month, Bob Dudley, BP’s managing director for the Americas and Asia, took over
the company’s effort to fight the spill from Mr Hayward, and he is seen as the
leading candidate to replace him. A US citizen, he has impressed observers with
his handling of the American media and lawmakers.

the past three weeks, Mr Svanberg has played a more prominent role, leading a
BP delegation to the White House to agree a $20bn (£13bn) fund to compensate
victims of the spill.

of Mr Svanberg’s defenders said on Friday he was being undermined by
“tittle-tattle” and tabloid allegations about his private life.

some investors said he failed to impress at meetings last week. One representative
described reactions to him as “very mixed”. One investor said: “Mr Svanberg
does not command the total support of shareholders. There are a lot of
shareholders who would be happier to see Mr Svanberg go first.”

most likely replacements for Mr Svanberg are also American. Some shareholders
favour Chip Goodyear, the former chief executive of BHP Billiton, who left
Temasek, the Singapore wealth fund, shortly after he was appointed to run it.

existing board members, the strongest contender is Paul Anderson, another
former chief executive of BHP, who joined the BP board this year.