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Bob Dudley, who is
expected to be named BP’s next CEO, must move quickly to restore the
oil giant’s battered image in its most important market, improve safety
and make BP a leaner company.

BP’s board met on
Monday to discuss a plan for Tony Hayward to step down as Chief
Executive following criticism of his handling of the Gulf of Mexico oil
spill, and be replaced by Dudley, who is heading the spill response
effort.

Investors hope
Dudley will help repair BP’s image in the U.S, which has been damaged
by a clumsy public relations strategy and a series of gaffes by
Hayward. “As an American he (Dudley) may well be more acceptable to the
U.S. political machine than the other alternatives for the role, which
could serve to better protect value in the U.S. for BP long term,” said
Jason Kenney, oil analyst at ING in Edinburgh.

The U.S. is home to
40 percent of BP’s assets and much of its growth but the public and
political anger over the oil spill has led to fears BP may no longer be
able to operate effectively in the U.S.

Dudley benefits
from experience of navigating fractious disputes, having led BP’s
Russian joint venture, TNK-BP, through a dispute between BP and its
oligarchs partners over control of the company.

He will also need to improve BP’s safety record to recover the respect of U.S. lawmakers.

This could require
a change to BP’s buccaneering approach, where division managers have
had greater freedom than their peers in other big oil companies and top
management has been willing to take greater commercial risks.

“A total change in
the culture of this company is necessary,” Democratic Representative Ed
Markey, chairman of the House Select Committee on Energy Independence
and Global Warming, said on CBS’s “The Early Show.”

Expensive mistakes

In the past five
years, BP has endured three of the industry’s most expensive and
reputationally damaging safety and environmental lapses.

An explosion of a
Texas refinery in 2005 killed 15 workers and cost the company billions,
while an oil spill in Alaska in 2006 led to millions of dollars of
fines and helped cement BP’s reputation in the U.S. as a reckless
operator.

Regulators blamed both incidents on cost-cutting under Hayward’s predecessor John Browne.

Investors, once
charmed by BP cost cutting, may now be more focused on a safer approach
too from the group that pumped more oil and gas than any other
non-state controlled oil concern last year.

“The company’s
strategy will need to be fundamentally changed in order to rebuild
future confidence in the company. Clearly, safety will need to become
the centrepiece,” said Dougie Youngson, oil analyst at Arbuthnot.

Investors and analysts also predict strategic changes.

As part of a peace
deal with the White House, which had been putting massive pressure on
the oil giant, BP agreed to establish a $20 billion fund to compensate
those affected by the spill.

It plans to sell $10 billion of none-core assets in the coming year to help finance that.

Last week the
company said it had agreed the sale of $7 billion of assets and invited
offers for another $1.7 billion worth of gas fields in Asia.

-REUTERS