Tony Hayward says he's sleeping well these days. Gonna win our hearts and minds

After the Spill: Big Oil Plots Its Comeback

Christopher Helman, 05.20.10, 10:40 AM EDT
Forbes Magazine dated June 07, 2010

BP Chief Tony Hayward thinks the Gulf spill might help the oil industry. Could he be right?



Despite the death threats, BP Chief Executive Tony Hayward says he's sleeping well these days. He looks it: fresh, almost relaxed in his makeshift corner office at BP's emergency response center in Houston. He insists the company has been "extraordinarily successful" in its response to the spill, which so far has dumped more than 100,000 barrels of oil into the Gulf of Mexico since Apr. 20, threatening tourism and fishing from Florida to Texas. By mid-May 13,000 workers and 500 vessels were trying to contain the giant leak. Leaning back in his chair, Hayward compares the operation to D-day. He quotes Winston Churchill: "When in hell, keep going."

Not that he has a choice. Before the first failed effort to cap the petro geyser BP faced an ocean of problems. A group of 200 plaintiffs' attorneys met in New Orleans on May 6 to join forces in suing the company. Senator Barbara Boxer (D--Calif.) called for a permanent drilling ban off the West Coast. BP's shares took a deep dive, dropping $25 billion, despite $6 billion in first-quarter earnings, double the results of a year ago.

Hayward gropes for an upside. "Deepwater drilling will be transformed by this event," he says. "If we can win the hearts and minds of the communities that are impacted, then we have the potential to enhance our reputation rather than have it damaged."

Delusional? Experts agree the industry will change in the wake of the disaster. "Regulations have not kept up with technological change," says Beverly Sauer, professor at Georgetown's McDonough School of Business. She sees it swinging back. For 20 years the oil industry has pushed farther offshore, drilling 14,000 wells in water depths of more than 700 feet, into ever trickier reservoirs, with higher pressures and temperatures (and very few serious accidents). Something bad was bound to happen.

Yet, despite the environmental damage this spill continues to cause, offshore drilling will not go away--just as Exxon's Valdez disaster hardly stopped the shipping of oil by sea. The deep water (2,000 feet or more) gives up 1 million barrels per day from the Gulf of Mexico, 20% of U.S. oil output. By 2015 it could rise to 30%, reports IHS-CERA.

If there's any upside, it's that the industry's best talents are working together. At BP's response center, 470 engineers and managers from 70 companies, including ExxonMobil ( XOM - news - people ), Shell, Chevron ( CVX - news - people ) and Petrobras, as well as government agencies, work 12-hour shifts around the clock. One room monitors marine traffic around the spill site; others are dedicated to plugging the hole by several means known as Top Hat, Junk Shot, Top Kill. Maps and schematics are on every wall; ideas and action items line each whiteboard. In one darkened room a wall-size screen shows video from the robotic submarines prowling the wreckage; as a worker on a ship changes out tools on the submarine's robotic arms, an engineer talks to him, watching him live. Food is constantly replenished; masseuses give backrubs.

The Gulf Coast was already reasonably well prepared for a calamity. Within 24 hours there were 32 response vessels, 1 million feet of containment boom and six firefighting ships on the scene. The industry promises to get even better.

...

http://www.forbes.com/free_forbes/2010/0607/outfront-bp-oil-petro-tony-hayward-slick-performance.html?partner=yahoomag