* Changes to free up CEO to focus on turnaround
* Lamar McKay to head exploration and production divisions
* Sources say BP mulls changes to safety unit
* BP says no changes planned
(Adds statement from BP, spokesman)
By Tom Bergin
LONDON, Nov 23 BP unveiled a
reoganisation of its oil and gas production operations on
Friday, reversing a change it enacted after the Gulf of Mexico
The latest move is partly intended to free Chief Executive
Bob Dudley up from close oversight of day-to-day operations so
he can help chart BP's recovery from the disaster which killed
11 men and spilled 5 million barrels of crude into the sea,
three sources close to the company said.
BP's shares have failed to recover since the Macondo well
was capped, and Dudley has been criticised for failing to
communicate a strategy for growth.
Lamar McKay, currently head of BP's U.S. operations, will
become head of a new exploration and production (E&P) unit it
called Upstream, a reinstatement of a role that was abolished in
2010, in the wake of the oil spill.
McKay, like Dudley, is a former executive from Amoco, the
company BP took over in 1997 to join the top tier of the oil
industry, making the British firm one of the three biggest.
BP had planned to announce his appointment internally next
week but brought forward the announcement following a Reuters
story revealing the plan.
BP directors agreed on the reorganisation some months ago,
two sources said, but wanted to delay announcing it until it had
made further progress with the U.S. authorities on settling
investigations around the spill.
The company said last week it would pay $4.5 billion in
penalties and plead guilty to criminal misconduct. A U.S.
government civil investigation could also lead to fines in
excess of $20 billion and two BP engineers face manslaughter
charges relating to the rig blast that led to the spill.
Two sources close to the company said it was also mulling
possible changes to its safety division, with a view to
potentially bringing some safety oversight roles back under the
control of the managers of operating units.
The sources said the separate chain of command for safety
personal slowed down operations.
A BP spokesman said there were no changes planned to the
safety unit, created in 2010 to signal BP was serious about
safety after a series of disasters
BP's shares were up 0.4 percent at 435 pence at 1356 GMT,
against a flat DJ Stoxx European oil and gas sector
Dudley broke up BP's old E&P division into three units on
his elevation to CEO to replace Tony Hayward, whose gaffes
during the spill led to his stepping down.
The creation of functional roles for exploration, drilling
and operating oil and gas production facilities, was aimed at
moving BP away from its traditional decentralised structure of
independent business units.
The decentralised model was blamed by analysts and U.S.
government investigators for giving managers incentives to put
profits before safety.
Dudley said in a statement that BP had successfully
implemented a more centralised model, which analysts have
likened to that adopted by rival ExxonMobil.
The chain of command now runs along functional lines,
whereas in the past managers of individual fields or refineries
had wide rein to run their assets as they saw fit.
BP did not announce any change in the centralised model but
two sources close to the company said Dudley was planning to
tweak this. "The pendulum had moved too far away from
decentralisation," one source said.
Also, the existing model, which created extra roles
reporting to the CEO, was seen to hinder Dudley's ability to
focus on strategic matters.
"There was a sense that Bob had an awful lot on his plate,"
one source close to the company said.
(Additional reporting by Andrew Callus; Editing by Philippa