BP battles to keep green revolution on track as oil giant reels from sacking of boss Looney
BP’s new boss insisted yesterday that its strategy has not changed – after its green energy revamp was thrown into doubt by the abrupt departure of chief executive Bernard Looney.
The oil giant stunned the City late on Tuesday when it revealed that Looney had quit with immediate effect amid a probe into his past personal relationships.
Some analysts think his departure gives BP the chance to retreat from the plans championed by the 53-year-old Irishman to slash oil and gas production and pivot towards renewables.
But Murray Auchincloss, BP’s chief financial officer – who has stepped in as interim boss in the wake of Looney’s exit – told a staff meeting: ‘Our strategy hasn’t changed.
Eying the top job: BP chairman Helge Lund, left, and finance chief Murray Auchincloss, right, who has stepped in as the oil giant’s interim chief exec
‘And our focus remains on performance – quarter by quarter.’
Auchincloss said the company’s leadership still had ‘the full support of the board to continue to deliver the plan we have laid out’.
Looney trumpeted his plan to transform BP shortly after taking over as boss in February 2020.
It includes a pledge to reach net zero emissions by 2050.
But Looney has struggled to convince investors still hungry to enjoy the kind of returns from oil and gas that have made BP – in the Irishman’s own words – a ‘cash machine’.
The company scaled back the transformation earlier this year. But its transition plans still stand out as more ambitious than rivals.
It is the only oil major committed to cutting oil and gas output by 25 per cent by 2030.
Looney’s exit came after he admitted not being ‘fully transparent’ with the company over an investigation into his relationship with colleagues.
The probe, launched in 2022 after an anonymous tip-off, had resulted in the chief executive admitting to a ‘small number’ of relationships before he became boss and giving assurances about his future behaviour.
However, BP said that when further allegations ‘of a similar nature’ were received by the company recently, another investigation was launched which remains ongoing.
Looney then admitted that he had not been fully forthcoming about all relationships and quit.
Clean energy: BP It is the only oil major committed to cutting oil and gas output by 25% by 2030
Shares yesterday fell 2.8 per cent, or 14.6p, to 508.2p in the wake of his resignation.
With Looney gone, it leaves the board – chaired by Norwegian Helge Lund and with non-executives including Aviva boss Amanda Blanc and former MI6 chief Sir John Sawers – to ponder a future direction under the next chief executive.
Biraj Borkhataria, analyst at RBC, suggested that the company could go ‘back to the future, with more focus on value and value growth in the core business’.
‘We think investors have remained unconvinced on the strategic shift – and even following the most recent pivot earlier this year, BP has underperformed all super-major peers since Bernard took over,’ he added.
‘The bottom line is that the world has clearly changed since Bernard took over.’
Liberum analyst David Hewitt said Looney’s departure presented the company with major opportunities.
‘The first is to be the first “super-major” to appoint a female CEO – there is a wealth of quality in the current senior management team,’ he said.
‘Secondly to reverse the overzealous pivot to lower returning renewables back to its core skillset – the exploration and exploitation of hydrocarbons as a support to the energy transition.’
Analysts at UBS argued that BP may not have to look far in the search for a replacement chief executive.
‘We see Auchincloss and chairman Helge Lund as likely leading internal candidates for the role,’ they said.
The men behaving badly in the boardroom
Fired: Former hedge fund boss Crispin Odey
Bernard Looney is just the latest senior businessman to be forced out amid a string of high profile dismissals that have put the spotlight on executive behaviour.
Hedge fund tycoon Crispin Odey and CBI chief Tony Danker have been fired this year while earlier departures include Sir Martin Sorrell at WPP and Steve Easterbrook at McDonald’s.
Odey was forced to step down in June this year from the hedge fund he founded following sexual harassment claims by 13 women – which he denies.
That followed the sacking of Danker as boss of the CBI in April over complaints about his behaviour at work.
Easterbrook was fired by McDonald’s in 2019 over a relationship with a member of staff while Sorrell left WPP in 2018 following allegations – again denied – he used company funds to pay for a prostitute.
Three of the past four BP bosses have now left under a cloud.
Lord Browne – dubbed the ‘Sun King’ during his 41 years at BP including the latter 12 as chief executive – quit in 2007 after lying to a court about his relationship with a man.
Browne hid his homosexuality for decades to protect his mother, an Auschwitz survivor, and wanted to keep his four-year relationship with former escort Jeff Chevalier secret.
Browne was replaced by his protégé Tony Hayward, but his spell at the top was cut short by the Deepwater Horizon oil spill in the Gulf of Mexico. An explosion on the oil rig in April 2010 killed 11 workers and triggered one of the largest environmental disasters of all time.
He was criticised for saying ‘I’d like my life back’ as he dealt with the catastrophe and was replaced by Bob Dudley that year. Dudley is credited with putting BP on the road to recovery and handed over to Looney in 2020.
