LONDON (Dow Jones)--The likely departure of BP PLC (BP) Chief Executive Tony Hayward is a loss for the company given his strong record prior to the Gulf of Mexico oil spill, but it may be what the company needs to do to repair its battered image, analysts said Sunday. "If Tony stands down, it is a political give up for BP in order to kick start a new era for the company," said ING analyst Jason Kenney. "Hayward has transformed BP and improved the operational performance of the company," said Panmure Gordon analyst Peter Hitchens. "But I feel the board needs a scapegoat and that might be the CEO." BP's board is set to name Managing Director Bob Dudley as the company's new chief executive if, as expected, it approves on Monday the negotiated departure of Hayward, people familiar with the matter told the Wall St Journal Sunday. The decision to move toward Mr. Hayward's departure was "mutual," these people said. Mr. Hayward has been under heavy fire since the devastating explosion aboard the Deepwater Horizon drilling rig in April that killed 11 men and triggered one of the worst oil spills in U.S. history. However, prior to that tragedy, he was feted for making BP one of the star performers among the major oil companies. From being one of the industry's laggards when Hayward took over in 2007, BP's financial performance had overtaken longtime rival Royal Dutch Shell PLC, its total oil and gas production had outstripped the mighty ExxonMobil Corp. and safety and performance at its troubled U.S. refining operations appeared to be improving. "There will be more than a few core shareholders that will be sorry to see Tony Hayward stand down given his operational capabilities and business skills," said Kenney. Tuesday's second-quarter results are expected to be exemplary despite the effect of the cost of the spill, he said. Hayward's image changed following the Gulf of Mexico disaster, when the company's repeated failure to cap the well over the course of several months and a serious of gaffes transformed him from the toast of the industry to "The Bumbler from BP". Although BP was throwing all the resources and expertise it had at stopping the spill, Hayward's public missteps stoked a level of anger from the public and politicians alike that threatened to overwhelm the company. BP shares plunged by more than half, Capitol Hill was pressing BP to pays tens of billions of dollars in upfront compensation and even President Barack Obama said he would fire Tony Hayward if he was able. It was only by agreeing to suspend dividend payments for the remainder of 2010 and paying $20 billion over three-and-a-half years into a compensation fund that BP was able to calm the situation. BP has finally capped the oil leak, is just weeks away from permanently plugging the well and its shares have climbed almost a third from the 14-year low hit on June 29, but the damage to Hayward's stature remains. "It is a real shame if he has to go in such a way," said ING's Kenney. "I think his commitment to lead BP in a proactive response to one of the largest environmental crises the modern day oil industry has known has been admirable, particularly given the onslaught of political and media pressure." Hayward's likely successor, Robert Dudley, took over day-to-day control of BP's spill response in the Gulf of Mexico in June after Hayward left the country to resume oversight of international operations. Dudley already had a reputation as a BP troubleshooter before taking over the spill response. Until 2008 he ran BP's highly strategic joint venture with a group of Russian billionaires, TNK-BP. "Dudley is a diplomat," said Oppenheimer analyst Fadel Gheit. "He does not lose his temper, he does not get flustered easily. He navigated very treacherous waters dealing with the Kremlin," and regardless of the final outcome, he did a great job leading TNK-BP for many years, he said. TNK-BP is Russia's third largest oil company, and Dudley had to tread carefully given the politically sensitive nature of Russia's oil and gas industry. From 2003 to 2008, Dudley appeared to have mastered this role and TNK-BP avoided many of the troubles faced by other oil companies, notably Yukos and Royal Dutch Shell. It grew to be a major source of both oil and gas production and reserves for BP. However, Dudley ran into trouble in 2008 as long running tensions between BP and its Russian partners over control of the venture boiled over into public acrimony. The Russians, for their part, believed that Dudley ran TNK-BP too much in the interests of BP and over several months used their political connections to force out many of senior staff who had come from BP. Dudley fought hard to resolve the standoff but was himself forced to leave Russia in the summer of 2008 after the authorities refused to renew his visa. He stepped down permanently in September 2008 as part of a peace deal between BP and its Russian partners. That agreement was widely seen as a victory for the Russian partners that weakened BP's influence, but the worst fears--that it could lose its stake in the company altogether--were not realized. Dudley was rewarded for his service with an appointment to BP's board of directors in February 2009, taking responsibility for broad oversight of the company's activities in the Americas and Asia. Assuming control of BP at this juncture is even more of a challenge, Gheit said. "BP America needs wholesale change. That might require that the top of the whole division will have to be removed," he said. "Dudley has to be a little bit ruthless. This is the battle for the survival of BP," Gheit said. "Regardless of the people who have to be fired, (Dudley) must prevent any such accident from happening in the future." Original Email Message: http://enews.newswires.dowjones.net/Enewsmails/Links.aspx?Ac=6&ID=20100725-15467758-0 (MORE TO FOLLOW) Dow Jones Newswires July 25, 2010 16:25 ET (20:25 GMT)