There is something of a clean up (if you’ll forgive the pun) going on at BP.
Yesterday the company sold $3.5bn worth of bonds, with demand high and the 5-year tranche being priced at a respectable (if sector-lagging) 195 bps over US Treasuries. The renewed confidence from the credit markets has helped the cost of default protection on its debt fall to 191bps from a high of 614bps in June.
Then today, Robert Dudley made his first personnel change before becoming CEO on Friday, putting Mark Bly, the UK head of safety, in charge of a new souped-up safety and risk division, and announcing plans to split the exploration business into three. The company said that change would lead to the departure of Andy Inglis, the head of exploration, by the end of the year.
Prepare for a media scrum next Wednesday. Tony Hayward, BP’s outgoing chief executive, will be grilled by the Energy and Climate Change Select Committee next week as part of its inquiry into the risks of deepwater drilling in the UK following the company’s oil spill in the Gulf of Mexico.
It will be Mr Hayward’s first appearance in public for several weeks and will no doubt be watched closely not just by the rest of the oil industry but also by lawmakers in the US. Mr Hayward’s was grilled mercilessly by a House of Representatives committee in Washington, DC in June over the accident on April 20 which killed 11 workers.
Expect next week’s evidence session to be somewhat less antagonistic: not only is Mr Hayward being replaced by Bob Dudley in October but since that time BP has also capped the Macondo well and is in the process of finally sealing it completely.
BP will publish its report into the Gulf of Mexico spill on Wednesday. It should make for some very interesting reading.
The report, which has been prepared by Mark Bly, the UK oil group’s head of safety, is the first of many investigations into the accident on April 20 which killed 11 workers and led to almost 5m barrels of oil spewing into the waters of the gulf.
Mr Bly and members of his team will hold a briefing in Washington, DC on Wednesday. We can expect the report to be detailed and technical and to focus on the sequence of events leading up to the explosion of the Deepwater Horizon rig.