Robert Malone to retire as head of BP’s American operations

Houston Chronicle
January 6, 2009

By KRISTEN HAYS Houston Chronicle Copyright 2009
Jan. 6, 2009, 11:06AM

The chief of BP’s Houston-based U.S. arm is retiring after leading the division through the cleanup of a string of serious blunders that savaged the company’s reputation.

The company said today that Robert Malone, 56, a 34-year veteran of the oil and gas industry, is retiring Feb. 1 as chairman and president of BP America.

Lamar McKay, 50, who served as executive vice president and chief operating officer for BP America until spending the last year crafting a new governance model for BP’s Russian venture, TNK-BP, will succeed Malone in the top U.S. spot.

Malone took the helm of BP America in June 2006 when the company was grappling with operational mishaps that had sapped BP’s competitive edge as well as public and investor confidence in the London-based company.

Those included the March 2005 explosion at BP’s Texas City refinery that killed 15 people, two leaks from a critical Alaskan oil pipeline system, a propane trading scandal and design flaws that delayed the startup of its Thunder Horse oil and gas platform, the biggest in the Gulf of Mexico.

Less than two months after taking the helm, Malone acknowledged to a congressional committee that the repeated problems had generated questions about BP’s credentials and accusations that the company had profited at the expense of employee safety. He insisted he was committed to restoring confidence and operational integrity and that he had been “given the authority, the resources and the people” to make it happen.

However, tangible results weren’t immediately forthcoming. Three more deaths occurred at the Texas City plant while it was undergoing a $1 billion overhaulone each year since the blast.

John Browne, the chief executive who led BP’s transformation from a sleepy British company into a global oil and gas giant with significant U.S. operations, abruptly quit in May 2007 not because of the mishaps, but upon the disclosure that during a court battle with a London tabloid, he had lied to a judge about how he met his former companion.

Tony Hayward, then head of global exploration and production for BP, succeeded Browne and pledged to improve performance, remove unnecessary layers of management left over from BP’s 1999 merger with Amoco and restore confidence.

A few months later in October 2007, BP struck plea deals to resolve its criminal liability in cases involving the blast, trading and the pipeline leaks. The trading and pipeline issues were resolved quickly, but a Houston federal judge has yet to accept or reject the deal stemming from the blast after explosion victims challenged it.

Hayward said in a statement that Malone has “made an extraordinary difference during his tenure at BP America” and praised his “unflagging commitment to safe operations.”

The announcement of Malone’s retirement comes just days after the Texas City plant regained ability to operate at full capacity of 475,000 barrels a day. Also, Thunder Horse started pumping in 2008, three years after its initial startup date.

Malone started his career in 1974 as a metallurgical engineer for Kennecott Cooper Corp., holding environmental engineering and health and safety roles before moving up to assistant to Kennecott’s chairman and president.

In 1981 Standard Oil of Ohio acquired Kennecott, and six years later, BP bought SOHIO. Malone moved on to several roles within BP, including vice president of Carborundum Co. of Niagara Falls, president of BP Pipelines Alaska, then president and chief operating officer of Alyeska Pipeline Service Co., which operates the Trans-Alaska Oil Pipeline at Prudhoe Bay.

Malone later serves as western regional president and then headed BP Shipping Ltd. before taking the helm of BP America.

McKay joined Amoco as a petroleum engineer in 1980 and led production businesses in the Arkoma Basin, the Gulf and the North Sea. After the BP-Amoco merger, he led BP’s global exploration and production strategy. He also served as group vice president for Russia and Kazakhstan before joining BP America.

~ by fredfelleman on January 6, 2009.

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