BP announces record loss following spill

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BP has announced a record loss of £17bn, adding that it will be setting aside $32.2bn to cover oil-spill costs in the Gulf of Mexico.

This is the first time in 18 years that the company has slipped into the red and today’s announcement also included confirmation that Tony Hayward will be stepping down as chief executive in October.

It is likely that he will be taking a new position as a non-executive director of Russian joint venture TNK-BP sometime after.

Hayward will be replaced by American BP board director Bob Dudley, who has been managing day-to-day clean-up operations in the Gulf since the recent creation of a unit devoted to the task.

Commenting on the decision to step down, Hayward said: ‘The Gulf of Mexico explosion was a terrible tragedy, for which − as the man in charge of BP when it happened − I will always feel a deep responsibility, regardless of where blame is ultimately found to lie.

‘From day one I decided that I would personally lead BP’s efforts to stem the leak and contain the damage − a logistical operation unprecedented in scale and cost. We have now capped the oil flow and we are doing everything within our power to clean up the spill and make restitution to everyone with legitimate claims.

‘I believe that the decision I have reached with the board to step down is consistent with the responsibility BP has shown throughout these terrible events. BP will be a changed company as a result of Macondo and it is right that it should embark on its next phase under new leadership.’

BP said that, under the terms of his contract, Hayward would receive a year’s salary, amounting to £1m.

In order to cover this quarter’s losses, BP has announced plans to dispose of assets valued at up to $30bn over the next 18 months, including $7bn from the recently announced disposals to exploration and production company Apache.

In addition to setting aside $32.2bn for Gulf clean-up, BP has also agreed with the US government to create a $20bn escrow account of available funds to pay costs and satisfy legitimate claims made against the company.