BP chief executive Tony Hayward is planning a trip to Russia to reassure President Dmitry Medvedev the oil giant is not on the verge of collapse, the Financial Times reported Monday. Hayward will meet with Medvedev and tell him that BP can meet the cost of the liabilities from the Gulf of Mexico oil spill, said the paper, without citing a source. The timing of the trip has not been finalised, it added. The company last week announced a 20-billion-dollar compensation fund to deal with claims arising from the spill. BP is present in Russia through TNK-BP, the third largest oil producer in the country, accounting for roughly a quarter of BP's global production.
Hayward's decision to visit Russia came after Medvedev expressed concern last week over the future of the company, in a newspaper interview. "What I know is that BP will have to pay a lot of money this year," the president was quoted Thursday as telling the Wall Street Journal. "Whether the company can digest those expenditures, whether they will lead to the annihilation of the company or its breakup into pieces is a matter of expediency." As well as being saddled with the huge clean up and compensation costs, the oil firm's credit worthiness has been slashed and its shares have slumped on the stock market in the wake of the spill. The environmental disaster began on April 20, when a explosion ripped through the Deepwater Horizon rig, killing 11 workers.
Hayward's recent efforts to pacify American anger have proved disastrous, and the oil chief was under fire again Sunday when US politicians blasted him for attending a yacht race. Media reports that he went to the race off the Isle of Wight, the day after he was removed from management of the oil leak disaster, drew fierce criticism from the US administration.
