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Tony Hayward’s comeback

After gaining infamy during the Gulf of Mexico spill, the former BP CEO is now drilling for oil in Iraqi Kurdistan


 
Tony Hayward’s comeback

Alex Wong/Getty Images

He became infamous during the Gulf of Mexico spill. Now he’s drilling for oil in Iraqi Kurdistan.

Drilling for oil has become an increasingly risky business. Most unexploited reservoirs are either far below the ocean, or in parts of the world where extracting the fossil fuel is either exceedingly expensive (like Alberta’s oil sands), or too dangerous. And Tony Hayward, the former chief executive of BP, doesn’t seem fazed by any of it.

After leaving BP last year in the wake of the disastrous Gulf of Mexico spill, Hayward recently re-emerged at the helm of a London-based energy investment company that, far from playing it safe, is hoping to strike it rich in one of the most geopolitically challenging places on earth: Iraqi Kurdistan. With Americans still furious about his now infamous Gulf crisis remark, “I want my life back,” Hayward earlier this year joined forces with financier Nat Rothschild, ex-Goldman Sachs banker Julian Metherell and entrepreneur Tom Daniels to create a so-called “blank cheque” investment company. Called Valleres PLC, it promised to buy and run an oil company somewhere in the world—and raised US$2.2 billion. “He is one of the most talented oil executives in the world,” says Karl Moore, a business professor at McGill University. “And some rich people saw that and said, ‘Hey, now we can get this guy to work for us.’ ”

Valleres this month inked a US$2.1-billion deal to take over Turkey’s Genel Energy International Ltd., which holds licences in Kurdistan. The plan is to make Genel a major independent player in the region by developing its six oil fields in Iraq, and buying other oil companies. Hayward, who will oversee operations as CEO, has described the Kurdistan region and its estimated 45 billion barrels of reserves as “one of the last great oil and gas frontiers.”

Of course, there’s a reason why those fields have yet to be exploited. Kurdistan is an autonomous region within Iraq, and its government has yet to hammer out a revenue sharing deal with Baghdad for oil exports. Baghdad claims that dozens of Kurdish oil contracts with foreign operators are illegal and has barred operators in the region from applying for contracts elsewhere in Iraq, effectively undermining Kurdistan’s influence on energy policy. In response, the taps from Kurdistan’s oil fields were turned off earlier this month, because of “technical difficulties.”

Hayward will also need to prove that his new company is a safe place for investors. One of Genel’s major shareholders, Mehmet Sepil, was handed a record fine by British regulators last year for insider dealing. Hayward, however, promises that Genel will adhere to “the highest standards of corporate governance.”

Regardless of the challenges ahead, Hayward is clearly well on his way to rebuilding his professional reputation, if not his public one. He helms what promises to be an important independent player in a key industry, and stands to reap a personal windfall after being handed a US$21-million stake in Genel upon completion of the Valleres deal (he could be entitled to more if the venture is successful). He is even working out of a temporary office on St. James Square in London, which, coincidentally, is the same address where BP is headquartered. Turns out that getting his life back wasn’t so difficult after all.


 

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