CEO: BP Needs To Raise Its Game After Challenging Year

LONDON, April 17, 2008 (Dow Jones Newswires)

U.K. oil and gas giant BP PLC needs to raise its game after a year in which its competitors were more successful at profiting from high oil prices, the company's Chief Executive Tony Hayward said Thursday.

"BP's replacement cost profit for 2007 was down 22% to $17.3 billion. That number tells you a lot. It came at a time when the external trading environment was, by and large, extremely robust," because of high oil prices, the CEO said at BP's annual general meeting in London. "Our competitors were more successful at exploiting this environment than we were."

"Our way of doing business is too complex, we are overly bureaucratic, not consistent enough and our costs are too high," Hayward said.

Hayward said his focus in 2008 will be on improving the operational performance upstream -- in oil and gas exploration and production -- and in refining, reducing overheads by 15%-20% and implementing a "fundamental change to the company culture." The company's 31% dividend increase in the fourth quarter of 2007 was a statement of confidence that this would be a success, he said.

Hayward said that safety performance, his immediate focus after taking over as chief executive last year, improved threefold over the last eight years to be among the best in the industry.

LONDON, April 17, 2008 (Dow Jones Newswires)