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Exec says BP could plug well by end of July

By BRETT CLANTON, Houston Chronicle, July 2, 2010

Gulf Coast native takes over cleanup effort

BP could plug its gushing Gulf oil well by the end of July, ahead of a projected target of August, if weather conditions permit and the drilling of relief wells keeps going smoothly, the newly appointed executive in charge of the company's response said Friday.

Bob DudleyBob Dudley, BP's new man in charge of the Gulf disaster, said relief wells are progressing and, barring delays, the company's gushing oil well could be plugged by the end of July. (Michael Paulsen Chronicle)

"We are ahead of schedule, but all it takes is one storm, and we have to move off of station," Bob Dudley, CEO of BP's newly created Gulf Coast Restoration Organization, said in an interview with the Houston Chronicle. "I think it's not unreasonable to think one of those might happen, and then we're into August again. That's why August is probably a higher probability."

Still, even the hint of an earlier-than-expected capping of BP's Macondo well comes as a rare bit of good news to a national crisis in dire need of it — and Dudley's job is to make sure there's more such news to come.

In the nearly two weeks since he took over responsibility for the spill from embattled BP CEO Tony Hayward, Dudley has moved swiftly to improve the British oil giant's handling of all aspects of the Gulf disaster, from trying to speed up payment of claims to out-of-work fisherman to making sure the requests of local Gulf officials are being heard.

"I am from the U.S. I grew up on the Gulf Coast. I've got a passion for it, and I think people saw that. I hope I can help," said Dudley, sitting in a small conference room at BP's sprawling office complex in west Houston.

Dudley, a board member and former head of BP's joint venture in Russia, TNK-BP, had been selected for the job early in the crisis. An engineer with 30 years experience in the oil and gas industry, who grew up in Hattiesburg, Miss., he seemed a perfect fit. And he was supposed to take over once the well was capped.

But on June 23, BP announced Dudley was stepping in immediately and Hayward would return to London - fueling speculation that Hayward is on his way out and Dudley could be the next CEO.

Praise for Hayward

Dudley, 54, did not directly address such talk when asked about it. He praised Hayward's decision to commit huge resources to the crisis and not to hide behind a 1990 U.S. law that sets a $75 million liability cap on economic damages for oil companies involved in spills.

By law, BP is responsible for all costs of the cleanup itself, but the cap could have limited what it paid for damages such as lost wages, destroyed property and lost tax revenue.

Dudley said Hayward was needed in England to run the global company, as well as reassure foreign countries and investors that BP is a sound business despite ballooning spill bills. He said the two of them talk every day.

On another matter, Dudley denied accusations BP cut corners on safety to speed along its over-budget Macondo well, resulting in the April 20 blowout that killed 11 workers, sank the Deepwater Horizon drilling rig and launched the worst oil spill in U.S. history. But he also realizes that the attacks have eroded morale at the company, including in Houston, where BP has more than 5,000 employees.

"I think people want to know the company can shut the well off, clean the beaches up and have a good future in the United States, and those are the kind of questions we get from people: Is there a way through this?" he said.

'Calm the atmosphere'

Bruce Bullock, director of Southern Methodist University's Maguire Energy Institute, said Dudley's reputation as cool-headed, crisis manager has helped him get off to a good start.

"I think it's certainly helped to calm the atmosphere down a little bit. Certainly, Hayward had become a bit of a lightning rod," Bullock said.

Hayward drew criticism for several gaffes as he presided over the spill response, including saying "I'd like my life back" six weeks after the blowout and returning to England to watch a yacht race one weekend last month.

But Tyson Slocum, director of non-profit Public Citizen's energy program in Washington, said he sees no evidence of change in BP's handling of the Gulf spill and what he sees as a broken safety culture there. "I don't see that people, even at the very top of this company, get it," he said.

Last month, BP announced it would suspend its quarterly dividend, slash capital spending and sell $10 billion in assets to help fund a $20 billion escrow account demanded by President Barack Obama for spill-related claims.

Kenneth Feinberg, administrator of the escrow account, is moving fast and could have the new claims organization up and running within three weeks, Dudley said. So far, BP's 33 claims centers have paid out about $140 million, he said.

For the moment, however, the chief focus remains on sealing BP's gushing deep-water well off the coast of Louisiana, and the relief wells appear to be the best near-term option for doing it.

Relief wells progressing

Thad Allen, the retired Coast Guard admiral leading the federal spill response, said Friday that while the first of two relief wells is about a week ahead of schedule, he is sticking with his original mid-August prediction for completion of the drilling and plugging of the Macondo well.

Dudley said whatever the timing, the relief wells - through which BP will pump drilling mud and cement to plug the ruptured one - have a high chance of working and bringing an end to one phase of a disaster that will take much longer to fully mend.

"It doesn't really feel realistic now," he said, "but if I had a hope, it would be that a year or two from now that we've cleaned up the Gulf and people say, 'That was a really unusual corporate response on a massive scale, and they did a fair job at it.'"

brett.clanton@chron.com

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