/ 17 June 2010

US lawmakers grill BP boss as spill deal lifts shares

BP chief executive Tony Hayward faced the wrath of US lawmakers on Thursday as he appeared before a congressional hearing to apologise for the worst oil spill in US history and say it should never have happened.

“Under your leadership BP has taken the most extreme risks. BP has cut corner after corner,” Democratic lawmaker Henry Waxman told Hayward.

Investors meanwhile welcomed a BP deal with the White House a day earlier that set up a $20-billion fund for compensation claims arising from the 59-day-old Gulf of Mexico spill. The agreement gave investors a clearer picture for the first time of the potential costs of the spill for BP.

In London, BP’s stock price soared 7% on the back of the news, while the company’s US-listed shares rose about 1% in early trading in New York.

It was Hayward’s first appearance on Capitol Hill since an explosion aboard an offshore oil rig on April 20 killed 11 workers and ruptured a deep-sea well, unleashing a torrent of oil into the Gulf.

He has been the public face of BP’s response to the spill but has been vilified for gaffes that played down the extent of the disaster and for the company’s handling of the crisis.

“The explosion and fire aboard the Deepwater Horizon and the resulting oil spill in the Gulf of Mexico never should have happened and I am deeply sorry that they did,” Hayward was due to tell the congressional panel, according to an advance transcript of his testimony.

The spill has soiled about 190km of US coastline, threatened multibillion dollar fishing and tourism industries and killed birds, dolphins and other sea life.

A number of other oil companies were seen to throw BP to the wolves in 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 and is expected to rebuff those claims.

The entire industry needs to improve, and it is too early to understand the cause of the “complex accident”, Hayward said in his prepared testimony, adding that a “number of companies are involved, including BP”. – Reuters