BP’s diplomat: Dudley, new man in charge of spill response, has faced big challenges before

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Head of BP’s spill response has survived trials

He has been cast in the role of fixer, sent in to clean up after BP’s gaffe-prone chief executive and oversee efforts to contain the Gulf of Mexico oil gusher. But Robert Dudley is really more of a diplomat.

In his first week running the spill response for BP, Dudley shuttled between the Gulf and Washington, defended BP engineers after a setback, toured a center where oil-covered turtles are treated and enlisted the help of a politically connected relief expert.

“Until we close the well off,” he acknowledged at one point, “I think there’s a period here where it’s going to be very difficult to restore BP’s reputation.” Dudley added he was confident the well would be plugged by the end of August.

He picked his words carefully and stressed that the understands the public outrage toward the company. He mentioned growing up in Mississippi and spending summers on the Gulf. It was vintage Dudley, according to acquaintances: steady and methodical.

“He’s not real emotional,” says Don Stacy, who was chairman of Amoco’s Russian operations and Dudley’s boss in the 1990s. “He doesn’t frighten people. He stays calm and analyzes problems.”

The 54-year-old managing director faces no shortage of problems as he takes command from Tony Hayward, the British CEO who angered Americans by minimizing the spill’s environmental impact and expressing his exasperation by saying, “I’d like my life back.”

Dudley’s task is not just logistical — capping the well and directing the cleanup. He must repair the less tangible damage, too, soothing angry people along the Gulf and at least starting to salvage BP’s reputation.

“His mission is restoring BP’s image in the Americas,” says Mark Gilman, an analyst for The Benchmark Co. who has known Dudley since the 1990s. “This is almost form over substance. BP needs to start looking good.”

Dudley got a quick idea of just how difficult that will be. On his first day on the job, an undersea robot bumped the cap being used to contain the gusher, forcing BP engineers to remove the cap and then scramble to reattach it.

At a briefing with reporters the next day in Washington, Dudley said rig workers did “exactly the right thing” and learned from the incident. Dudley was in Washington to meet Interior Secretary Ken Salazar and other top administration officials to discuss the rate of oil flowing from the broken well and BP’s use of chemicals to break down oil plumes.

Dudley said he expects to split his time between the Gulf, Houston and Washington — a sign that dealing with regulators will be an important part of the job. Already there are calls in Washington to subject BP to extra scrutiny before letting the company drill again in the United States.

Notably, Dudley asked James Lee Witt to review BP’s response to the disaster and offer recommendations. Witt is well-known to regulators in Washington and Louisiana — he was director of the Federal Emergency Management Agency during the Clinton administration and worked for the state of Louisiana after Hurricane Katrina.

Arjen Boin, a Louisiana State professor who wrote a book on crisis management, says enlisting Witt, a southerner from neighboring Arkansas, was a wise move. But he says BP must do more to win over governors, regulators and local officials in the Gulf states, some of whom have been more strident than the feds in their criticism of the company.

Dudley has experience dealing with combative regulators and difficult partners.

In the 1990s, he ran Amoco’s operations in Russia before BP bought the company in 1998. Stacy, the retired Amoco executive, says Dudley was instrumental in persuading Russian investors to let Amoco have an equity stake. The Russians didn’t know much about capitalism, and Dudley, he says, “knew how to educate them without lecturing.”

Later, at BP, Dudley oversaw exploration and production in Russia, the Caspian region, Angola, Algeria and Egypt. In 2003, BP tapped him to run TNK-BP, a joint venture with a group of Russian billionaires.

The venture was enormously successful, but the Russian partners eventually pushed for more control — and Dudley’s removal. Russian government officials raided the venture’s offices, denied work permits to dozens of foreign workers and forced Dudley to leave the country in 2008.

“My strong view is that the conflict wasn’t aimed at Bob, but rather against the British partner (BP),” says Peter Necarsulmer, CEO of The PBN Co., which BP hired as consultants in Russia. “Bob was the ham in that sandwich.”

BP and its partners eventually settled their differences, and the venture still makes money for BP. Back in London, Dudley got a board seat and oversight of BP’s operations in Asia and the Americas.

Dudley was supposed to take charge of the spill response only after the well was plugged. But the switch was moved up after two key events in Washington — a June 16 meeting between President Barack Obama and Dudley, Hayward and BP Chairman Carl-Henric Svanberg; and Hayward’s disastrous appearance the next day before a congressional panel, where the CEO came across as uninformed and uncooperative.

Dudley hasn’t agreed to every interview request — BP denied one for this story — but he has been more accessible and relaxed around reporters than Hayward. Last week, when a scheduled 45 minutes with reporters was up, Dudley kept talking, ignoring aides who were trying to shoo him out the door.

But echoing Hayward, Dudley says it’s too early to know what caused the April 20 rig explosion that killed 11 workers and triggered an environmental disaster. He says he hasn’t been involved in the search to explain the accident, adding, “I haven’t read even our internal investigation.”

Dudley staunchly defends BP’s actions since the blowout. He says he hopes the world will someday recognize BP’s “incredible response” to the spill.

Analysts say if Dudley can manage the well-capping and the cleanup, he could replace Hayward as CEO. BP officials spent Monday swatting down a report out of Russia that Hayward would resign soon.

People who know Dudley say he is flexible when problems arise.

Aleksey Knizhnikov, an energy policy official in Russia for the World Wildlife Fund, says that while he ran TNK-BP Dudley listened to activists and agreed to delay seismic testing and reroute a gas pipeline for environmental reasons.

John Hofmeister, former president of Shell Oil and author of “Why We Hate the Oil Companies,” says he talked to Dudley recently to urge the use of supertankers to capture more of the oil spewing from the broken well. Dudley said BP’s engineers would study the idea.

“Bob is well-respected in the industry because he’s open to ideas, and that’s what BP needs right now,” Hofmeister says.

Christine Tiscareno, an oil industry analyst in London for Standard & Poor’s who has met Dudley, says his background makes him well-suited for the new job and to replace Hayward as the public face of BP in the United States.

“He is used to working under very, very stressful circumstances,” she says, “but more than that, he’s an American.”

Business Writer Jane Wardell in London contributed to this report.