In a sense, Hayward -- who shocked Gulf residents when he said "I'd like my life back" and weeks later went yachting -- will finally get his wish.
Dudley, who had led BP's operations in the Americas and Asia, was appointed president and chief executive of the newly created Gulf Coast Restoration Organization, effective immediately, and will report to Hayward.
"In the near term, my focus will be on listening to stakeholders, so we can address concerns and remove obstacles that get in the way of our effectiveness. And we'll build an organization that over the longer term fulfills BP's commitments to the restore the livelihoods and the environment of the Gulf Coast," Dudley said.
The reorganization followed a series of humiliations in recent days for BP. Last week it bowed to President Barack Obama's demand that it set up a $20 billion escrow fund to cover damages and to suspend dividend payments, followed a day later by a public thrashing for Hayward before a Congressional committee.
Hayward repeatedly apologized and expressed sorrow for the oil leak caused by a fire and explosion on the Deepwater Horizon drilling rig on April 20. Eleven workers on the rig died.
Members of the House Energy and Commerce Committee were infuriated when Hayward denied direct responsibility for operational decisions which may have led to the disaster.
"You're really insulting our intelligence," Rep. Eliot Engel, a Democrat from New York, said at Thursday's hearing. "I am thoroughly disgusted."
Hayward had a further public relations gaffe over the weekend when he was photographed at a yacht race, and on Tuesday he ducked out of a previously announced commitment to speak at an oil industry conference in London.
A defining moment in BP's response to the disaster came on May 30 with Hayward's unguarded remark that "There's no one who wants this over more than I do. I'd like my life back."
Prime Minister David Cameron intends to press Obama this weekend at the G8 summit for more clarity on the ultimate financial cost that BP will face, the British leader's office said.
Cameron told the House of Commons on Wednesday that the company is prepared to meet its obligations to fund the clean up and compensate those whose businesses have been blighted by the spill. "But we do want to make sure that this remains a strong and stable company, for our benefit but also for the benefit of the United States," Cameron said.
BP said the newly formed organization will manage all aspects of the response to the Deepwater Horizon incident and the oil and gas spill in the Gulf of Mexico. That includes clean-up operations, coordinating with the U.S. government and local officials, and managing the $20 billion escrow account.
"Having grown up in Mississippi, Bob has a deep appreciation and affinity for the Gulf Coast, and believes deeply in BP's commitment to restore the region," Hayward said.
"Our commitment to the Gulf States is for the long-term. And that requires a more permanent sustainable organization to see it through," Hayward added.
BP had said on Tuesday that Dudley would be taking the lead in the United States while Hayward retreated to his chief executive role.
Dudley, 54, lost out to Hayward when BP chose a new CEO three years ago. His oil industry career began in 1979 with Amoco Corp., which merged with BP in 1998.
Between 1994 and 1997 Dudley was based in Moscow, working on developing Amoco's business in Russia. From 2003 to 2008, he was president and chief executive of TNK-BP, a joint venture in Russia.