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Page last updated at 11:01 GMT, Sunday, 6 June 2010 12:01 UK

"We will stop the leak"

On Sunday 6 June Andrew Marr interviewed Chief Executive of BP, Tony Hayward.

Please note 'The Andrew Marr Show' must be credited if any part of this transcript is used.

Tony Hayward, Chief Executive of BP

ANDREW MARR:

And so to a man I'm afraid described as "the most hated face in America" just now: the Chief Executive of BP, Tony Hayward. A massively complex engineering operation to cap that gushing well in the Gulf of Mexico is going on right now. Is it working? Well we should all hope it is working because of the environmental disaster, but also because the future of BP itself is at stake. Some papers suggest it endangers the recovery of the UK economy it's so big. Tony Hayward joins me now. Thank you very much indeed for coming.

TONY HAYWARD:

Good morning, Andrew. Good morning.

ANDREW MARR:

Let's just start with the situation right now. This so-called 'top cap' has been placed over the gushing oil. What's the latest information you have about whether it's working or not?

TONY HAYWARD:

Well from the very beginning we've launched what is the world's largest ever environmental and spill response. We're battling on three fronts: in the sub-sea to contain, now using the cap; on the surface to contain the oil offshore; and along the shore to defend the shoreline. As we speak the containment cap is producing around 10,000 barrels of oil a day to the surface, which is being processed on the surface and we've taken.

ANDREW MARR:

(over) So what sort of proportion is that coming out?

TONY HAYWARD:

At the moment it's difficult to say, but we would expect it to be the majority - probably the vast majority of the oil.

ANDREW MARR:

So you think this cap will get most of the oil?

TONY HAYWARD:

Well that is our hope. We are optimising the operation. We have a further containment system to implement in the course of this coming week, which will be in place by next weekend. So when those two are in place, we would very much hope to be containing the vast majority of the oil.

ANDREW MARR:

The reports that I've seen up to now suggest that perhaps about a quarter of the oil is being got by this capping system, but you think it's much more than that?

TONY HAYWARD:

Well, as I said 48 hours ago, it's going to take us 48 to 72 hours to optimise this. We're in that process. Over the last 24 hours we've produced 10,000 barrels a day to surface. The plume's reduced. We have to determine by how much and there's more to go. And, as I said, there's a second containment system to be introduced next weekend, and by the end of the month there will be a more permanent containment system in place ahead of the relief wells getting there in August.

ANDREW MARR:

Well I was just going to ask about those because of course the danger there is that you have to put these relief wells in right in the middle of the hurricane season.

TONY HAYWARD:

Well the hurricane season is upon us. It's unusual to get hurricanes in the Gulf of Mexico much before the end of August, but of course we can't be confident of that. So the system that will go in place at the end of the month is designed to be essentially hurricane proof. It will be a sealed production system and it's involving bringing equipment from both the UK and from Mexico to put this in place. Again it's a first; never been done before.

ANDREW MARR:

But you've been accused of being over-optimistic - and you have been over-optimistic before about this - and you've had bad news and bad news and bad news, and that has contributed to your problems in the States and the media.

TONY HAYWARD:

I think there's no doubt that it has been difficult to predict because all of this is a first. Every piece of this implementation is the first time it's been done in 5,000 feet of water, a mile beneath the sea surface. And we have had issues as a consequence of that.

ANDREW MARR:

You've had a series of disasters as a company. There was the Alaskan one; there was Texas City where so many people died. Is there something wrong with BP?

TONY HAYWARD:

Certainly half a decade ago, we had a series of incidents. Since I have been in this role, I've made safe, reliable operations absolute priority.

ANDREW MARR:

Unsuccessfully it might be said.

TONY HAYWARD:

Well you would have to say that when you focus so hard on it and something like this happens, it does cause you to wonder what else could have been done.

ANDREW MARR:

Do you think that the company that you inherited, you took over had sufficient engineering and technical skills to do the jobs you've been doing?

TONY HAYWARD:

We have added significantly to the engineering and technical capability of BP over the last four or five years - very, very significantly. We've recruited thousands of engineers and technicians into the BP ranks, significantly bolstered the systems and processes that we use …

ANDREW MARR:

Yuh.

TONY HAYWARD:

… and clearly what we're looking at here is evidence that that's not …

ANDREW MARR:

(over) Not enough yet.

TONY HAYWARD:

… not sufficient.

ANDREW MARR:

I mean I just wonder whether you know in the world's rush for oil people are pushing too hard, too deep to get to those reserves …

TONY HAYWARD:

Well I …

ANDREW MARR:

That you're beyond the technical capacity of what can be safely done?

TONY HAYWARD:

I think it's self-evident when something like this happens, that's of course a very valid concern. It's also worth just highlighting the industry has been exploring in the deep water for over twenty years and it has not had to contend with an incident of this sort before. It is one of those very low probability occurrences. Now it's clearly unacceptable that it's occurred, so what has to happen on the part of the industry - and certainly BP - is to move safety standards to a completely different level.

ANDREW MARR:

(over) Yes. The health and safety people in the States …

TONY HAYWARD:

This was a one in … This was a one in perhaps a hundred thousand to one in a million occurrence if you do the analysis. In this accident, based on what we understand so far, seven layers of protection were breached. Most importantly the failsafe mechanism - the so-called blow-out preventer, which is the ultimate safety mechanism of any drilling operation - failed to operate as it should have done. What we need to do is understand that and design and engineer a greater level …

ANDREW MARR:

(over) A new system of some kind.

TONY HAYWARD:

… a new level of redundancy.

ANDREW MARR:

760 something complaints, violations were recorded against BP by the health and safety people in the States. That's a heck of a lot.

TONY HAYWARD:

It is and it relates to the period of 2005/2006 and in particular the issues …

ANDREW MARR:

(over) A specific problem back then?

TONY HAYWARD:

It was the issues around Texas City and one of our other refineries in the United States.

ANDREW MARR:

What happens if, as a lot of American politicians are talking about, the US government takes control of BP or at least BP's American operations? Is that plausible? Is that possible?

TONY HAYWARD:

I think you know what we're doing is focusing on the response. We're absolutely focused on the response. I think it's for the US authorities to determine what they wish to do. All I can say is that we're working hand in hand with the US authorities. I am talking all the time with Secretaries Chu, Salazar, Thad Allen, the incident commander to deal with the response.

ANDREW MARR:

Do you feel you're being unfairly treated by the American political system and the media given where we are in the electoral cycle?

TONY HAYWARD:

I think it's understandable when something of this scale occurs with this sort of environmental impact - the impact it's had on the Gulf Coast - that people are angry and frustrated and emotional. It's a perfectly reasonable thing. And you know I'm angry and frustrated and you know …

ANDREW MARR:

I mean no British company has been on the receiving end of American presidential anger like this I think ever before. That and the possibility of some political action and criminal action against the company has led people to start to ask whether BP itself is going to survive this.

TONY HAYWARD:

BP's a very strong company. Its operations today are running extremely well. It's generating a lot of cash flow. It has a very strong balance sheet. Our reputation has been based on thousands of people over a long period of time in BP doing the right thing, and we are doing everything we can to do the right thing. We are going to stop the leak. We're going to clean up the oil. We're going to remediate any environmental damage and we are going to return the Gulf Coast to the position it was in prior to this event. That's an absolute commitment, and we will be there long after the media has gone making good on our promises.

ANDREW MARR:

And once you've done all of that, will you be paying the dividend to your investors?

TONY HAYWARD:

We're going to take care of all of our stakeholders.

ANDREW MARR:

(over) Yeah, so there will be a dividend.

TONY HAYWARD:

We have to take care of our Gulf Coast stakeholders. We have to take care of our investors. We have to take care of our employees, our retirees. We're going to take care of all of our stakeholders.

ANDREW MARR:

The dividend is due in July, I think - the end of the July. Is it going to be paid?

TONY HAYWARD:

That will be a decision for the board at the end of July when they will take all of the circumstances and issues into account in making that decision.

ANDREW MARR:

I mean quite clearly President Obama wants you not to pay that divided, or at least only to pay it if you've upped what you're offering to shrimp farmers and people around the coasts.

TONY HAYWARD:

Well you know what we have done so far is to pay every claim that's been presented to us, and we will continue to do that. You know the most important thing in terms of claims today is to ensure that people who can't fish today have the wherewithal to feed their families. And we've taken a claims process that has taken 45 days traditionally in the United States and shortened it to 48 hours. It takes 12 seconds when you phone the BP claims line to be put into the process, be given a number. If you turn up at the claims office, within 48 hours you're given a cheque. You take it to a bank and you cash the cheque. We are going to continue to do that.

ANDREW MARR:

It's been already an expensive process, to say the least, for BP. People are talking about $20 billion by the time this is all over - an almost unimaginable amount of money. If it was that kind of money and your commitment is open-ended in that sense, then we really are talking about the future of BP, aren't we?

TONY HAYWARD:

As I've said, BP is running very well today; it's generating a lot of cash. It'll generate 30 to 35 billion dollars of free cash flow this year. We have a very strong balance sheet, very low level of debt, low gearing, a strong set of assets. We have the financial strength to see through this and we have the determination to do the right thing, to rebuild our reputation.

ANDREW MARR:

I don't want to you know further sort of dump on a company in such trouble, but you've lost a third of the value of your balance sheet already and this could be a commitment that goes on for, I don't know, years and years and years in the future.

TONY HAYWARD:

We've lost a third of the value of our market capitalisation. That is a very different thing from the value of our balance sheet.

ANDREW MARR:

Alright, yeah.

TONY HAYWARD:

And as I said …

ANDREW MARR:

(over) And a lot of investors, even more important of course.

TONY HAYWARD:

The company is financially very strong. It has the wherewithal to weather this storm and to come back strongly.

ANDREW MARR:

And so when you read in the papers today that you know you could be a takeover target, other companies are circling you and all the rest of it - I know that you have more important things on your immediate agenda, but how do you respond to that?

TONY HAYWARD:

I'm focused on the response. The most important thing in all of this is to stop the oil coming out of the well, eliminate the leak, control the oil on the surface, defend the shoreline, to absolutely minimise the environmental impact to the maximum extent possible. Taking care of that will take care of the future.

ANDREW MARR:

We talk about companies in the abstract, but of course they are sort of families as well. What has this been doing to BP as a family, as a group of people - human level?

TONY HAYWARD:

I think everyone in BP is devastated and heartbroken by this. I am and everyone in BP is. And everyone in BP is determined to do the right thing to make this right, and that is stop the spill, clean it up, remediate the environmental damage and make good the livelihoods of the people of the Gulf Coast. We are part of that community. We have thousands of employees who live on the Gulf Coast. We have even more retirees who retire to the Gulf Coast. We will be in the Gulf Coast, making the Gulf Coast good and right, long after the media has departed. That is an absolute commitment.

ANDREW MARR:

And can you give an absolute commitment that you will be there overseeing all of that?

TONY HAYWARD:

I have absolute intention of seeing this through to the end.

ANDREW MARR:

Some of the American initiatives on this are about criminal prosecution as well as civil prosecution. Is it possible that BP staff, members, maybe senior members, maybe even yourself will end up in court and possibly even in jail?

TONY HAYWARD:

I think all of that's for the future really, Andrew. I'm not … You know we'll see what happens in the future. As I said, for the moment myself and my team are focused on the response.

ANDREW MARR:

But you must be braced for that?

TONY HAYWARD:

I'm focused on the response.

ANDREW MARR:

When you look back so far, I mean I think you'd concede the PR hasn't been handled perfectly. You've made comments which have caused outrage in the States about wanting your life back and all of that kind of thing. Is that because you are basically an engineer and an oil man and you find yourself pitched into what has been a highly political media fire fight?

TONY HAYWARD:

I'm certainly not a politician, and what I've learnt out of this is that comments that were well intentioned, taken out of context, come straight back at you. I've had a big learning over the course of the last three or four weeks. I'm certain it'll help me in the future. I've apologised for things which I've said that clearly weren't intentioned, and that's all I can say really.

ANDREW MARR:

And do you feel you've got the backing of your board and your chairman?

TONY HAYWARD:

I've had very strong support from my chairman and from the board. A number of the board members have visited the operation several times in the course of the last three or four weeks. The chairman has been out for two extended visits to oversee the operation, to see what's going on, and they've been extremely supportive.

ANDREW MARR:

Has President Obama actually spoken to you himself?

TONY HAYWARD:

I've spoken with a very large number of his immediate er … er

ANDREW MARR:

But not the main man?

TONY HAYWARD:

I haven't spoken to the President. I don't feel I need to speak to the President. I've spoken to his key lieutenants who are overseeing this operation along with BP. And I would stress that the working relationship …

ANDREW MARR:

(over) Would you like … I mean would you like face to face to talk to …

TONY HAYWARD:

There is no need for that, I don't believe. The working relationship between BP and the federal agencies involved in this has been exemplary, I believe. We've worked hand in hand. There is a brains trust working on this in Houston. The great scientists and technologists from the US, from BP and from the oil and gas industry are working on the sub-sea operation. As people have seen, this is a very complex, deeply technological challenge that we're facing, and it's been fantastic to see the cooperation that has occurred.

ANDREW MARR:

Alright. Tony Hayward, you are in the middle of the vortex. Thank you very much indeed for taking the time to come and talk to us this morning.

TONY HAYWARD:

Thank you very much, Andrew.

INTERVIEW ENDS




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