BP Shares Fall on Report of 'Dreadful' Third Quarter

Shares in BP fell Tuesday after a newspaper reported that the oil company's chief executive had warned staff of poor third-quarter results.

The Financial Times said CEO Tony Hayward told a staff meeting in Houston that he planned a shake-up of the company's structure after its worst financial performance in 15 years.

The newspaper quoted Hayward as telling staff that third-quarter revenues, due to be announced Oct. 23, would be "dreadful" and that BP needed to streamline its overly complicated structure.

"There is massive duplication and lack of clarity of who does what," the newspaper quoted Hayward as saying. "We will reduce the number of organization units. (We) will reduce the number of layers from the workers up to the CEO from 11 to about seven."

BP confirmed the staff meeting had taken place but said Hayward's comments had focused on operating performance rather than a major hit to revenue.

Lost Revenue

The company would not confirm it was planning to restructure. But Hayward said in July that he was "determined to fix" BP's operational performance, simplifying the company's organization and cutting head office work force.

BP shares dropped 2.5% to 574.5 pence ($11.55) on the London Stock Exchange.

Hayward succeeded John Browne as BP's chief executive on May 1. The company is still struggling to recover from a series of high-profile mishaps including a deadly refinery blast in Texas in 2005 and an oil spill in Alaska that contributed to Browne's departure.

Hayward blamed the company's underperformance on lost revenue from its Texas City and Whiting refineries in the United States, which are not running at full capacity, and from large production projects that haven't yet started operation, the FT said.