BP Plc is making drastic moves, including replacing its gaffe-prone chief executive, to recover from the disastrous Gulf of Mexico oil spill and rejuvenate its business, reports China's Xinhua news agency.

Yet a crush of challenges remain before the battered British oil giant, as it scrambles to cover the costs related to the environmental catastrophe, repair its reputation, streamline its structure and deal with various probes and legal action.

CEO Change

In a widely anticipated move, BP decided to remove Tony Hayward from the helm, after his verbal miscues and controversial behavior in handling the massive leak irked the White House and infuriated the US public.

Among his public relations gaffes, he once called the spill's impact "modest," grumbled about wanting to have his life back, and attended a yacht race off the coast of England while American residents were busy grappling with gooey blobs along the Gulf shores.

BP's whip will be handed over on Oct 1 to Bob Dudley, the first American to lead the company. He is currently in charge of the cleanup operations in the Gulf of Mexico.

Placing safety among his highest priorities, Dudley has vowed to learn from the incident and to "change the culture" of how the company handles safety-related issues.

"We are taking a hard look at ourselves, what we do and how we do it... What we learn will have implications for our ways of working, our strategy and our governance," said BP Chairman Carl-Henric Svanberg, adding that BP "will be a different company going forward."

For its part, the White House stressed that, no matter who is in charge, BP has to perform its obligations and responsibilities in what is regarded as the biggest environmental disaster in US history.

"Our concern is not who heads BP. The key is that BP can't leave and should not leave the Gulf... They have obligations and responsibilities as the responsible party in this instance that have to be met regardless of who the CEO is," White House spokesman Robert Gibbs said.

Financial Bite

Together with the management change, BP on Tuesday also reported a US$17 billion loss in the second quarter this year, after setting aside US$32 billion to cover spill-related costs.

Meanwhile, it announced that it plans to sell US$30 billion in assets over the next 18 months to help cover its liabilities and streamline the company into a smaller, higher-quality business.

The company said the sell-off would help reduce its net debt to somewhere between US$10 billion and US$15 billion within one and a half years, from the US$23 billion at the end of June.

However, many analysts doubt the amount set aside will be enough to cover the actual cost for cleaning the waters and shores, repairing local ecosystems and compensating affected residents and businesses.

On Tuesday, BP shares closed 1.7 percent and 2.6 percent lower in the US and London markets respectively. Since the spill began in April, the company has lost about 40 percent of its market value.

Legal Battles

On the legal front, the company is also beleaguered by a variety of investigations.

The US Securities and Exchange Commission and the Department of Justice have launched "informal enquiries" into securities matters related to the spill.

The US Senate is also pondering a probe into whether BP played a role in the release of Abdelbaset Ali Mohmet al-Megrahi, a Libyan national and the only man convicted over the 1988 Lockerbie bombing that killed 270.

Meanwhile, several US government agencies are reportedly preparing a criminal investigation into whether BP and at least two other companies committed crimes in the leadup to the Gulf of Mexico incident, such as making false statements to regulators, obstructing justice, or falsifying test results.

There are of course piles of private lawsuits and a probe by Texas authorities into possible excessive pollution in April and May at a BP refinery in Texas City, which suffered a deadly explosion in 2005 that killed 15 and injured 180.

Cleanup Efforts

After the deadly rig explosion on April 20 opened the gusher about 1.6 km under the Gulf of Mexico, hundreds of millions of liters of oil spewed into the sea before BP managed to seal the leak two weeks ago with a tight-fitting containment cap.

Yet the efforts to permanently stop the spill have encountered new challenges as the region enters the hurricane season. After the latest tropical storm faded, the company on Saturday resumed "static kill" operation.

The so-called "static kill" involves pumping heavy drilling fluids, known as mud, through the blowout preventer valve system that sits on top of the well, and then injecting cement to seal it.

However, the ultimate solution is drilling relief wells. The first of the two relief wells under construction is expected to be completed in August, yet it is still contingent on the weather.

With the gusher having been sealed for two weeks, visible oil slicks are decreasing off the shores. But scientists cautioned that a large amount of spewed oil is still in the Gulf but its exact quantity and whereabouts remain unknown.

They feared that much of the oil had been trapped below the surface following the use of millions of liters of chemical dispersant. Evidence has been found that large clouds of oil suspend in the water.

As this oil can affect the food chain and deplete oxygen in the water, scientists say that they want to know how fast the oil is being eaten by microbes and being diluted and where it is heading for.

Much now depends on nature's ability to eventually clean up the oil, they say. 

- Bernama