BP Calls for Urgent Reinvention

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BP Calls for Urgent Reinvention

LONDON -- BP reinvented itself before, it must do it again, according to chief executive Tony Hayward, as reported by The Financial Times, which obtained a copy of Hayward's recent remarks made at a closed meeting in Phoenix and posted on BP's closed, corporate intranet, OneBP.

"BP has reinvented itself before in the 1970s and early 1990s. It needs to reinvent itself again in 2008," Hayward reportedly told a meeting of group leaders in the U.S.

The meeting was dubbed "the first time in modern BP history that all group leaders have gathered together in a single meeting."

The OneBP report cited by the Financial Times said Hayward delivered an urgent "hard-hitting address," setting out BP's current gap with competitors, as he "spelled out the consequences if BP fails to urgently address its current performance shortfalls." The report did not specify what those consequences would be.

It went on to say that he urged leaders to "increase the intensity of changes under way" and challenged them to look for immediate steps to simplify or stop activity, the report stated.

BP continues to face problems in its US operations, where fatal accidents at its Texas City refinery led government investigators this year to open a formal inquiry into operations at the site, according to the report.

BP insists it has improved safety at the facility following a 2005 blast that killed 15 people and injured hundreds, and damaged the company's reputation and lead to protracted litigation, the report stated.

Hayward's agenda has reportedly been created to transform the company fundamentally and push it back at the forefront of the industry, which includes simplifying how the company is structured and operated and ensuring that resources are shifted to the front line, with operating managers freed from corporate bureaucracy, the newspaper reported.

Confidence internally and externally with BP's investors could only be won, according to Hayward, by delivering on short-term targets for revenue restoration, reducing complexity and cost reduction, while fundamentally changing corporate behavior, according to the report.

"Given the scale of the turnround, this won't be easy, and there are a lot of tough decisions that need to be taken," he was quoted by the Financial Times as saying.

As for its response to The Financial Times, BP stated: "We don't comment in the press on what is said at internal meetings."