UPDATE 1-BP reorganises core oil and gas production unit

By Tom Bergin

LONDON, Jan 30 (Reuters) - BP said it was making ten seniormanagement changes in a reorganization of its core oil and gasproduction unit, continuing a reversal of the structure adoptedin the wake of the Gulf of Mexico oil spill.

The move is the latest in BP's struggle to return to normalas it continues to tackle legal challenges in the United Statesand a share price a long way short of its pre-spill levels.

Lamar McKay, Head of the Upstream division, which finds andpumps oil and gas, told staff of the changes in a series ofemails seen by Reuters.

A spokesman confirmed the emails, which were sent onTuesday, and said the changes reflected McKay's desire to puttogether his own leadership team for the division which isresponsible for most of BP's profits.

The restructuring follows McKay's appointment late lastyear. From Dudley's appointment as CEO in Oct. 2010 until McKaytook up his job, Dudley had overseen the oil exploration andproduction operations, which in turn had been arranged intothree different operating units.

"Dudley felt that upstream had become too independent beforethe spill. Now he probably feels he doesn't need to keep such aclose eye on it," said one analyst who asked not to be named.

U.S. government reports blamed poor risk management by BP,and some mistakes by its contractors, for the April 2010 rigblast that killed 11 men and led to the oil spill.

Analysts and industry peers said BP's practice of giving oilfield and refinery managers a high degree of independence in howthey hit targets had contributed to its weak risk management.

Dudley reduced this independence and a spokesman said thepractice of having tight, global reporting lines for functionswould continue.

As part of the changes, former head of the now abolisheddevelopments group, Bernard Looney, 42 -- tipped by someinternally as a possible future leader of the company -- becomesChief Operating Officer, Production.

Former head of the Production grouping, Bob Fryar, 49, hasmoved out of Upstream to become group head of safety, replacingMark Bly, 55, who is retiring.