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AS a result of the Gulf of Mexico oil spill, BP has recorded a $17.15b loss for Q2 2010, the largest loss in UK corporate history, and has confirmed rumours that it is replacing ceo Tony Hayward.

The loss results from BP budgeting $32.2b to cover the expected costs for containment, clean-up and compensation arising from the spill. Strip away this charge, which includes the $20b escrow fund that the company previously announced, and far from making a record loss in Q2, it would have made a $5b profit on a replacement cost basis compared to $2.9b in 2009.

Regardless, the oil giant needs to shrink itself to balance the coming costs, announcing plans to divest some $30b worth of exploration and production assets over the next 18 months. Aside from agreed deals to sell $7b of assets in Egypt and North America to Apache there are press rumours that it is talking to others about selling its Alaskan assets and stakes in its Argentine unit.

Despite the spill experience, BP executives plan to increase the company’s efforts in the US and in deep water environments.

BP chairman Carl-Henric Svanberg says: “There is no worry about our financial position and our ability to get through this. It's of course a tragedy and it has large consequences, but we have no doubt that we will be able to rebuild the company.”

One man that will not share this experience is ceo Tony Hayward who is being replaced by BP director Bob Dudley. Dudley began handling the company’s spill response after Hayward came under increasing public and political fire for comments about “wanting his life back” and accusations that he deliberately evaded answering questions from senators.

Those sympathetic with Hayward have described him as a scapegoat, with others adding that the appointment of Dudley, a US citizen, is a political one motivated to halt vociferous attacks by US politicians in a bid to begin restoring the damaged ‘British Petroleum’ brand.

This aside, Dudley previously worked for BP’s Russian joint venture TNK-BP, where he succeeded in easing tensions and conflicts between the two halves of the company. In a strange twist, there are rumours that Hayward, who will retire in October, will become a non-executive director at TNK-BP.

Hayward’s exit package is expected to include a year’s salary plus benefits, worth in total more than $1.5m. In two years he will also be entitled to collect a pension worth £600,000/y.