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BP CEO John Browne resigns amid furor

http://news.yahoo.com/s/ap/20070501/ap_on_bi_ge/britain_bp_ceo

LONDON - BP PLC's Chief Executive John Browne resigned Tuesday, hours after a judge allowed a newspaper to publish allegations from a former boyfriend that the executive misused company resources.

Browne, who had already moved up his departure by more than a year after a deadly refinery blast in Texas and a giant oil spill in Alaska, denied any improper conduct relating to BP. But he acknowledged that he had lied to a judge about how he met his former partner, with whom he had a four-year relationship.

The Mail on Sunday, the newspaper that had sought to publish the claims, immediately called for Browne to be prosecuted for perjury.

Browne said he regretted the lie, saying he was in shock at his private life being exposed, and was stepping down voluntarily "to avoid unnecessary embarrassment and distraction to the company."

"For the past 41 years of my career at BP I have kept my private life separate from my business life," he said.

Browne's designated successor, exploration and production head Tony Hayward, will take over as CEO immediately, the company said. He will have to repair BP's tarnished reputation after the series of high-profile operational and regulatory mishaps.

BP said Browne's decision meant he would lose a bonus of up to 1.3 times his annual salary, worth more than 3.5 million pounds ($6.9 million). He would also forgo inclusion in a share plan with a potential value of 12 million pounds ($23.9 million).

Browne, 59, had been fighting since January to keep the Mail on Sunday from publishing details from the interview with Jeff Chevalier. He acknowledged the relationship in the statement Tuesday and apologized for lying to the judge.

"My initial witness statements ... contained an untruthful account about how I first met Jeff," he said. "This account, prompted by my embarrassment and shock at the revelations, is a matter of deep regret."

The Mail on Sunday said it would provide evidence of Browne's deception to the attorney general's office.

"That Lord Browne should have felt free to lie deliberately and repeatedly raises deeply worrying questions about the system of secret court hearing which is increasingly being used by the rich and powerful to prevent the public knowing the truth about their activities," the newspaper said in a statement.

Browne was accused of using BP computers and staff to help Chevalier, of using support staff to set up and then wind down a company Browne created for him to run, and sending a senior BP employee on a personal errand to deliver cash to him.

Browne rejected the allegations, calling them "full of misleading and erroneous claims. I deny categorically any allegations of improper conduct relating to BP."

BP said an internal investigation determined that those allegations were unfounded.
"The board of BP has accepted John's resignation with the deepest regret," Chairman Peter Sutherland said. He called it "a tragedy that he should be compelled by his sense of honor to resign in these painful circumstances."

Phil Flynn, an analyst at Alaron Trading Corp. in Chicago, said he thought the allegations against Browne were serious enough that, if proved true, the CEO would have been forced to resign even if BP had not faced other problems.

"If that's proven, then that in and of itself might be enough," Flynn said. "But, obviously, John Browne's reputation was already tainted."

Shares in BP edged lower after the announcement, closing down 0.4 percent to 563 pence ($11.24) on the London Stock Exchange.

Browne's decision will allow Hayward to start with a clean slate, analyst Jason Kenney of ING Group told Dow Jones Newswires. He said the news shouldn't affect the company's share performance, since Hayward already was selected to become the next CEO and the company's future strategy had been laid out earlier this year.

After more than a decade at the helm of BP, Browne — a close associate of Prime Minister
Tony Blair's had announced in January that he would resign at the end of July, bringing his expected departure forward by more than a year.

Then his annual performance bonus for last year was cut almost in half as the oil spill in Alaska and the effects of the refinery explosion in Texas overshadowed record profits for the oil company.

Last month, BP reported a 17 percent drop in first-quarter earnings on lower oil prices and declining production.

Browne joined the company in 1966 as an apprentice and worked his way up to the top job in 1995. He oversaw BP's expansion into the United States, including the 1998 merger with Amoco and the subsequent acquisitions of Arco and Castrol.

Before the scandals, Browne was known as the man who turned BP around, Flynn said.
"This guy was a superstar in the oil industry," he said.
But Browne's attempts to fashion BP as an environmentally friendly oil company — he was the first major oil company CEO to acknowledge global warming and masterminded BP's logo change from a shield to a flowerlike sunburst design with the slogan "Beyond Petroleum" — were undermined by the company's recent U.S. troubles.
BP was forced to temporarily close some of its operations at the Prudhoe Bay oil field in Alaska because of a major pipeline spill and delayed the opening of its key Thunder Horse platform in the Gulf of Mexico. The 2005 explosion at its Texas refinery that killed 15 workers has so far cost the company around $2 billion in compensation payouts, repairs and lost profits.
Browne told shareholders at the annual meeting last month that the day of the accident was the "saddest and darkest" of his career. Sutherland said the company was making "good progress" on safety issues.
BP is set to appoint an independent safety expert this month.