BP’s share price dropped as much as 1.8 per cent this morning as the company reeled from the shock departure of its chief executive after he failed to disclose the full extent of past relationships with staff. Before his appointment as CEO in 2020 Bernard Looney had “a small number of relationships with colleagues”, which he disclosed last year after a review was triggered by an anonymous source. No breach of conduct was found. But on Tuesday, Looney told the company he had not been “fully transparent”. His relatively short and tumultuous tenure will end with questions about his behaviour. But it’s worth remembering how it started: with an enormous overhaul of the company’s marketing and PR strategy and an ambitious pledge to cut emissions to net zero by 2050. After a 32-year career at the oil major, there’s questions over whether his successor will turn the tanker in the same direction. Potential successors include Charles Woodburn at BAE Systems, Tufan Erginbilgic at Rolls Royce and former chief financial officer at BP Brian Gilvary.
Looney is to be replaced on an interim basis by Murray Auchinloss, BP’s chief financial officer. Will his strategy persist? In February 2020, when Looney took up the role, he broke ranks with the other oil majors, announcing that BP expected oil and gas production to fall over time. He pledged to increase investments in low-carbon projects tenfold and build or acquire 50GW of renewable power by 2030. It was a genuine – albeit ill-fated – attempt to change direction. The war in Ukraine drove energy security up the agenda of shareholders, who told BP it needed to continue investing in oil and gas production. At the same time, the company had to extract itself from Russia and shake off criticism as a “cash machine” profiteering off energy bills. Eventually, investor pressure changed the emphasis. Looney scaled back a plan to cut BP’s oil and gas production by 2030 by 40 per cent of its level in 2019, down to just 25. But having a flexible strategy is no bad thing – and BP has recently shown a greener approach than rival Shell. It’s unfortunate that Looney’s personal actions got in the way.
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