BP chief executive Tony Hayward is optimistic and upbeat about the company's future. Suzanne Plunkett/Reuters

With £5bn being wiped off the share value of his company overnight, a difficult future trading environment ahead and his beloved West Ham football club close to the relegation zone, BP chief executive Tony Hayward might have been in tetchy mood.

But he bounces into the boardroom with his habitual shy smile in place, an affable greeting, and no hesitation in discussing potentially prickly issues such as tar sands, Iraq and the role of his former boss, Lord Browne.

Judging by the body language of an ever-present public relations head, Browne remains a sensitive issue but Hayward is happy to explain how things stand with his brilliant but controversial predecessor.

"We remain good friends," he says calmly outlining how he continues to meet his former mentor for regular lunches and dinners. Only when he is asked whether Browne could have any residual influence over current BP policy does he bridle.

"Definitely not," he says, although the younger man is happy to lavish praise on the man dubbed the Sun King and who is on the verge of publishing his own biography. "John Browne was a strategic ­visionary. He transformed the ­industry so I have no complaints about the ­inheritance. What we have concentrated on in the last few years is ensuring we run our operations safely, reliably and efficiently."

Changing direction

Hayward took over from Browne nearly three years ago in the wake of a high court scandal, the Texas City fire and a series of other problems that badly tarnished BP's image and sent the share price into freefall after a period of major takeovers and financial success.

The Browne "turtle" – as Hayward and other acolytes were known internally – quickly changed direction away from the glossy, green-tinged rhetoric and expansionist policies of his predecessor in favour a slimmed-down, back-to-basics approach.

BP might have seen 5% slashed from the share price this week after Hayward warned of tough market conditions in 2010 – as the economic slowdown has sucked out some of the expected demand for oil and gas. But he was talking after reporting a 33% increase in fourth-quarter profits, which was compared with a drop of 75% at arch-rival Shell. BP, partly by removing 17,000 staff from the payroll, has now replaced Shell as Europe's biggest oil group by share valuation and most City equity analysts continue to favour ­Hayward's firm over a stumbling Shell.

BP raised its oil and gas production levels by 4%, while Shell saw a 2% fall over 2009. But the latter has also been looking madly for cost-savings and has rowed back on plans to invest more heavily in carbon-intensive tar sands. Hayward has kept Browne's sunburst logo and "beyond petroleum" slogan on its marketing material but has followed Shell into Canada's tar sands.

The BP boss – an improbably youthful 52-year-old – says he is not cutting back there despite mounting criticism from green groups that they are in danger of triggering runaway global warming.

He is keen to emphasise that BP is engaged in a much more limited way than Shell while steering clear of the more controversial mining techniques.

"BP has never been in the strip-mining of the tar sands and never will be. We are focused on so-called steam-assisted gravity drainage, which is much more akin to conventional reservoir engineering … therefore the environmental footprint on the ground is no more or worse than normal oil or gas operation." "It is clearly carbon-intensive and we also see that it will remain commercial even with a very high legislative price of CO2."

Tar sands are part of a wider diversity of supply of energy sources that the world is going to require, Hayward argues, dismissing the idea that the growing pressure on the US military not to use these imports will bear fruit. By 2015 BP could be providing 100,000-200,000 barrels a day from this source for which the company is preparing two US refineries specially to process the crude.

"The likelihood of the US army not using a secure local supply of energy is quite low … Canadian heavy oil is going to be a very important part of America's energy," he argues.

He rejects the suggestion that exploiting tar sands contradicts the "beyond petroleum" mantra, seeing it instead as just another fuel source on top of its wind, solar and biofuel investments.

He is particularly upbeat about the prospects of the latter even allowing for the food-not-fuel arguments that arose when crop-price increases were blamed on biofuels. By 2020 up to 10% of global petrol supplies will be made up of plant-based biofuels, Hayward believes, while the figure could be as high as 20% in the US. BP is preparing for this by making big investments of between $5bn-$6bn in Brazil on sugar-based ethanol "first-generation" biofuels. But BP is also working on synthetic "second generation" biofuels in conjunction with US chemical group, Du Pont, in this country.

The wind operations that BP is involved with are based onshore in the US where the land is cheap and planning easy to obtain. But Hayward makes clear he has enormous reservations about the North Sea wind "revolution" launched by the UK government.

He questions whether the UK can build 14 to 15 gigawatts (GW) of offshore wind by 2020, never mind the 25-27GW – the total expected by ministers and industry here. Equally, he questions how quickly nuclear power plants can be built and whether a rush will help either develop in the most cost-efficient way.

But he feels nuclear and the wider renewables industry have an important part to play in the future energy mix. "The history of the energy industry is one of evolution not revolution," he says, citing past examples of moves from wood-to-coal and from coal-to-gas to argue his point.

All of this can be seen as entirely self-serving. Hayward is not interested in offshore wind or following oil companies such as Total of France or ENI of Italy into a flirtation with nuclear. The Hayward solution is to exploit gas, a carbon fuel but one with a much lighter carbon content than oil.

BP wants critics – including the energy regulator Ofgem – to drop their fears about becoming dependent on foreign gas supplies so new gas-fired power stations can be ­constructed in Britain to take up the slack when the old atomic and coal-fired power stations are retired. He describes as "paranoiac" the idea that Britain will become dependent on Russian gas imports leaving us in the hands of Vladimir Putin's foreign policy designs.

Serious minded

Hayward knows about the Russians through the TBK-BP joint venture but he has a good grounding in most markets, given almost 30 years working for BP in different parts of the world.

As a serious-minded student he did a PhD in Edinburgh prior to joining BP and being sent to France and China, before a five-year stint in South America. He later moved around the group doing stints as a geologist, project manager and even group treasurer. Hayward first came to the attention of Browne when he was part of a team which organised a company leadership conference in Phoenix, Arizona, in 1990 and became a personal assistant to Browne when he took over BP's group exploration and production department, something Hayward himself did in 2003.

The straight-talking oil explorer, who is said to still enjoy the occasional triathlon, is an optimist and has little time for those who argue the world has passed, or is even approaching, peak oil supplies. "I personally – and BP – have never believed we will see peak oil because of supply. We always believed we would see peak oil because of demand. There will come a time – I believe it is beyond 2020 – when because of the changes in the energy portfolio, because of the drive for energy efficiency, because of the introduction of biofuels, demand for oil will peak."

There is plenty of oil in the world, he argues, not least in Iraq, where BP has staff working on the ground, even ahead of important political elections.

Hayward expects Iraq's oil production to grow from a couple of million barrels a day today to close to 10m, putting it on par with Saudi Arabia. This makes it "a big part of oil security for the world."

BP will have to pump large amounts of investment into the country – a ­prospect many may compare trivially with taking a punt on West Ham, say, whose new owners are looking for cash too. Is Hayward – a Hammers supporter since his sixth birthday – going to help out? That is one question he is not going to answer and with a bound he is out of the room.

www.guardian.co.uk