Monday, November 29, 1999

U.S. lawmakers set to grill BP`s Hayward

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BP Plc Chief Executive Tony Hayward faces the wrath of U.S. lawmakers on Thursday, while a government official is set to criticize the rules of Washington's probe into the Gulf of Mexico oil spill as "backward."Hayward, the public face of BP's response to the disaster, will appear at a congressional hearing to explain the events leading up to the worst oil spill in U.S. history and what the British energy giant has done to clean up the mess.Public anger over the handling of the 59-day crisis is intense, especially on the U.S. Gulf Coast, where oil from BP's blown-out undersea well has fouled coastlines, threatened fishing and tourism and killed birds and marine life.President Barack Obama has sharpened his criticism of BP, and lawmakers have publicly grilled the company's executives, particularly Hayward. It is expected to be no different on Thursday when the BP chief executive visits Capitol Hill."Tomorrow he's going to be in the hot seat under glaring lights and tremendous animosity and criticism" at the hearing, said Fadel Gheit, managing director of oil and gas research at investment firm Oppenheimer & Co in New York.Graphics, click, however, said that BP had taken a step in the right direction on Wednesday when it agreed to set up a $20 billion fund for spill-related damage claims, suspend its dividend and sell off assets to cover the costs.BP's shares gyrated in volatile New York trading, dropping as much as 5 percent before swinging to positive territory on news of the fund, known as an escrow account.The company's move, which came after intense pressure from the U.S. government and Congress, gave Obama his most tangible success since the beginning of the crisis, which was triggered by an April 20 offshore rig blast that killed 11 workers.Obama has watched support fade as his fellow Democrats gear up for tough congressional elections in November. With many voters riveted by the crisis, lawmakers are unlikely to go soft on Hayward.A number of other oil companies were seen to throw BP to the wolves in congressional hearings this week, portraying themselves as a cut above the London-based firm in terms of safety practices and operational standards.Hayward, in turn, will try to widen the circle of blame on Thursday, rebuffing those claims.The entire industry needs to improve, and it is too early to understand the cause of the "complex accident", Hayward said in prepared testimony, adding that "A number of companies are involved, including BP," in the disaster.Hayward also will be under pressure to avoid another gaffe that could further damage BP's dented reputation.He was forced to apologize publicly after telling Gulf residents last month that he would "like my life back," a comment widely viewed as insensitive in face of the region's struggle to contain the impact of the slick.BP Chairman Carl-Henric Svanberg on Wednesday said the company was not greedy and cared "about the small people." He, too, apologized and issued a statement saying he "spoke clumsily."The company said on Wednesday it started a second system to siphon oil from the leaking well, a day after a team of U.S. scientists raised their high-end estimate of the amount of crude oil flowing from the well by 50 percent to between 35,000 and 60,000 barrels (1.47 million gallons/5.56 million liters and 2.52 million gallons/9.52 million liters) per day.REGION'S PAINThe government's probe of the spill, which is shared by the Coast Guard and the Interior Department's Minerals Management Service (MMS), will come under scrutiny on Thursday when the Interior Department's inspector general, Mary Kendall, testifies before a U.S. House of Representatives hearing.In prepared remarks, Kendall said the Coast Guard's investigative procedures were "comprehensive, but in my view completely backwards," saying it focused on holding hearings rather than developing evidence.Kendall will also raise concerns about the training and supervision of safety inspectors at MMS, the agency that oversees offshore oil and natural gas development and which has been attacked for being too cozy with the oil industry.Meanwhile, frustration grows for Gulf residents who are scared that the spill will kill the region's share of offshore oil drilling, which is a critical source of good-paying jobs in several relatively poor U.S. states, primarily Louisiana.And with thousands of Gulf Coast commercial fishermen largely idled by the spill, Louisiana shrimper Clifton Bartholomew, 21, wondered whether the $20 billion BP fund would be enough to cover the region's losses."If you add it all up together -- everybody in shrimping, fishing, the whole industry -- by the time this is all gone I think they'll need more than $20 billion," Bartholomew said.(Additional reporting by Matt Spetalnick, Caren Bohan, Patricia Zengerle and Alister Bull in Washington, Estelle Shirbon and Tom Bergin in London, Kristen Hays in Houston, Braden Reddall in San Francisco and Jeffrey Jones in Buras, Louisiana; Writing by Peter Henderson, Editing by Paul Simao)
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