Embattled BP CEO removed from oil spill oversight; Stats show slow pace of claims process

By Ray Henry, AP
Friday, June 18, 2010

Embattled BP CEO removed from spill oversight

NEW ORLEANS — BP removed Chief Executive Tony Hayward from day-to-day oversight of the Gulf oil spill crisis a day after he was pummeled by lawmakers in an appearance on Capitol Hill, the company’s chairman said Friday.

Carl-Henric Svanberg told Britain’s Sky News television that Hayward “is now handing over the operations, the daily operations to (BP Managing Director) Bob Dudley,” overshadowing news that after many setbacks BP was finally making real progress in siponing and burning off oil from the underwater gusher.

Coast Guard Adm. Thad Allen announced earlier Friday that a newly expanded containment system is capturing or incinerating more than 1 million gallons of oil daily, the first time it has approached its peak capacity. And the system will soon grow. By late June, the oil giant hopes it can keep nearly 90 percent of the flow from hitting the ocean.

Allen also said the Coast Guard is ramping up efforts to capture the crude closer to shore with the help of private boats. As of Friday morning, between 65 million and 121.6 million gallons of oil have gushed into the Gulf of Mexico, based on federal daily flow rate estimates.

The optimistic news about the containment plan was tempered by Hayward’s removal, which follows a June 4 announcement by BP that Dudley, and American oil executive, would lead the long-term response to the oil spill once the leak had been stopped. Svanberg’s statement appeared to accelerate that timeline, as millions of gallons of crude continue to gush into the Gulf.

A BP spokesman in Houston, Tristan Vanhegan, says the “board still has confidence in Tony.”

The company also continues to struggle to compensate Gulf Coast residents and business owners who have been economically devastated by the spill. On Friday, the House Judiciary Committee said data it has collected shows that BP has paid less than 12 percent of the claims submitted, by dollar value. BP, however, said the number was higher.

The committee said in a statement that data it collected showed only $71 million out of an estimated $600 million had been paid as of Tuesday. In addition, the panel said that BP didn’t make any payments in the first two weeks following the April 20 explosion and oil spill, and that it hasn’t made a single payment for bodily injury or diminished home property value.

BP spokesman Scott Dean said in an e-mail that the company had paid out $95 million as of Friday, and it had written about 30,000 checks to settle about half of the 63,000 claims it has received.

Dean said it was streamlining its process for dealing with large commercial claims.

Michigan Democratic Rep. John Conyers said he’s concerned that BP “is stiffing too many victims and shortchanging others.”

The chief of the new independent office to pay claims said a plan to handle the remaining damage claims will be in place in 30 to 45 days. Kenneth Feinberg, who’s overseeing the Independent Claims Facility, said he also hopes to have a program going forward that would provide payment within 30 to 60 days of someone submitting a new claim.

“The challenge here is going to be to evaluate quickly, eligible claims, legitimate claims and get them paid,” said Feinberg, who was chosen by President Barack Obama and BP for the role.

Feinberg, who was in Mississippi Friday to meet with Gov. Haley Barbour, reiterated that his office isn’t a government program. The lawyer, who oversaw payouts to victims of the Sept. 11 attacks, said he will be paid by BP but didn’t say how much.

Connie Bartenbach, owner of Rental Resources in Ocean Springs, Miss., said Friday that she’s been unable to get her claims processed with BP. Her cancellation rates last month were six times higher than normal, and business is getting worse.

“They have somehow lost me in their system. I filed with them on May 18,” she said. “I should have gotten a call back long before now.”

Earlier in the day, the Coast Guard signaled a shift in strategy to fight the oil, saying it was ramping up efforts to capture the crude closer to shore.

The Coast Guard’s Allen said an estimated 2,000 private boats in the so-called “vessels of opportunity” program will be more closely linked through a tighter command and control structure to direct them to locations less than 50 miles offshore to skim the oil. Allen, the point man for the federal response to the spill, previously had said surface containment efforts would be concentrated much farther offshore.

The news of Hayward’s removal came a day after he told Congress members that he was “so devastated with this accident,” ”deeply sorry” and “so distraught.”

But he also testified that he was out of the loop on decisions at the well and disclaimed knowledge of any of the myriad problems on and under the Deepwater Horizon rig before the deadly explosion. BP was leasing the rig the Deepwater Horizon that exploded April 20, killing 11 workers and triggering the environmental disaster.

“BP blew it,” said Rep. Bart Stupak, D-Mich., chairman of the House investigations panel that held the hearing. “You cut corners to save money and time.”

Associated Press Writer Shelia Byrd in Jackson, Miss., contributed to this report.

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