BP CEO Hayward to Testify: 'I Fully Grasp the Terrible Reality'

June 16, 2010 -- BP CEO Tony Hayward will try to reassure lawmakers that he fully understands the gravity of the massive oil leak in the Gulf, while acknowledging he does not have answers to serious questions the disaster has raised, when he testifies before a Congressional subcommittee Thursday.

"Since April 20, I have spent a great deal of my time in the Gulf Coast region and in the incident command center in Houston, and let there be no mistake -- I understand how serious this situation is," Hayward will say, according to a transcript of the testimony the embattled executive is expected to give before the House Energy and Commerce Subcommittee on Oversight and Investigations.

"This is a tragedy: people lost their lives; others were injured; and the Gulf Coast environment and communities are suffering," the transcript says. "This is unacceptable, I understand that, and let me be very clear: I fully grasp the terrible reality of the situation."

However, the testimony, which will come one day after Hayward met with President Barack Obama to pledge to put $20 billion in an escrow account to compensate people affected by the Gulf coast oil spill, offers no clear explanations for -- or solutions to -- what has happened.

"How could this happen? How damaging is the spill to the environment? Why is it taking so long to stop the flow of oil and gas into the Gulf?" the script of the testimony continues. "Can we as a society explore for oil and gas in safer and more reliable ways? What is the appropriate regulatory framework for the industry?

"We don't yet have answers to all these important questions."

The testimony also outlines steps BP has taken so far to stop the flow of oil and minimize the environmental and economic impacts from the oil spill, the largest in the country's history.

On Wednesday, the president said he was "pleased" with BP's $20 billion pledge.

"The people of the Gulf have my commitment that BP will meet its obligations to them," Obama said. "BP has publicly pledged to make good on the claims it owes to people in the Gulf. And so, the agreement we reached will set up the financial and legal framework in which to do it."

The president said that the $20 billion figure is not a cap but will "provide substantial assurance that the claims people and businesses have will be honored."

BP Chairman Carl-Henric Svanberg announced after the meeting that the company's board has decided it will not pay stockholders any further dividends this year.

"We made it clear to the president that words are not enough. We understand that we will and we should be judged by our actions," he said.

Svanberg also apologized for the oil spill.

"I would like to take this opportunity to apologize to the American people on behalf of all the employees of BP many of whom are living on the Gulf cast," he said. "I too thank you for the patience that you have in this difficult time. Through our actions and commitments we hope that over long-term that we will regain the trust that you have in us."

The oil company also pledged to establish a separate $100 million fund to compensate unemployed oil rig workers affected by the closure of other deep water rigs as a result of the April 20 explosion.

Obama said today that BP's liabilities for the Gulf spill are "significant" and said his administration will continue to hold them and other responsible parties accountable.

"I'm absolutely confident BP will be able to meet its obligations to the Gulf Coast and to the American people," he said. "BP is a strong and viable company and it is in all our interests that it remains so. This is about accountability. At the end of the day, that's what every American wants and expects."