BP replaces Heyward as CEO by October, reports record loss

LONDON (AP) — BP's much-criticized CEO Tony Hayward will be replaced by American Robert Dudley on Oct. 1, the company said today as it reported a record quarterly loss and set aside $32.2 billion to cover costs of the devastating Gulf of Mexico oil spill.

BP said the decision to replace Hayward, 53, with the company's first ever non-British chief executive was made by mutual agreement.

In a mark of faith in its outgoing leader, BP said it planned to recommend him for a non-executive board position at its Russian joint venture and will pay him 1.045 million pounds ($1.6 million), a year's salary, instead of the year's notice he was entitled to.

"The BP board is deeply saddened to lose a CEO whose success over some three years in driving the performance of the company was so widely and deservedly admired," BP Chairman Carl-Henric Svanberg said in a statement.

Svanberg said the April 20 explosion of the Macondo well on the Deepwater Horizon platform run by BP in the Gulf of Mexico has been a "watershed incident" for the company.