BP’s Interim CEO to Stick to Energy Transition after Looney’s Exit

BP’s interim CEO Murray Auchincloss is expected to stick to the company’s plans to shift away from oil and gas following CEO Bernard Looney‘s abrupt resignation, company sources said. Looney took the top job in February 2020 with a vow to reinvent the British oil giant, and has since led it through a radical transformation with plans to become a net-zero emissions company by 2050. 

The 53-year-old Irishman scaled back the strategy earlier this year, but this still stands out among rivals for being the only oil major with plans to cut oil and gas output by 2030 by 25%. 

Looney resigned as CEO on Tuesday after allegations of personal relationships with company colleagues surfaced recently, prompting the company to launch an investigation. 

That followed similar allegations the BP board investigated in May 2022. Investors have responded coolly to the strategy, with BP’s shares underperforming peers since Looney took over, although they have risen more than rivals since the February revision.

Auchincloss, who was chief financial officer before the board named as interim CEO, worked closely with Looney in devising BP’s strategy in the past few years. The Canadian national who joined BP in 1998 has advocated a focus on high-return assets partly by leaning more heavily on BP’s legacy oil and gas assets that boosted profits to a record $28 billion last year, according to two company sources. And he is unlikely to change the strategy.

 “Murray is already the power behind the throne, he has been key in all the major decisions. The strategy is owned by the board and it is unlikely to change,” one company source told Reuters. 

“Delivering our 2025 targets remains our prime focus.” A BP spokesperson did not immediately respond to a request for comment. BP shares were down by over 1% by 1130 GMT, compared with a 0.2% decline for the broader European energy index.

BP plans to invest $55 to $65 billion in solar and wind power, biofuels, hydrogen and other low-carbon businesses by 2030, when it will account for half of capital expenditure. 

BP’s strategy came under renewed scrutiny after rival Shell also slowed down its energy transition strategy in June, scrapping plans to cut oil output. And while the BP board could opt to make some small changes, the strategy is unlikely to change, a source close to the company said. “(The BP board) have enough flexibility within the current strategy to focus more on cash flow,” a second source close to the company said.

“No-one wants to go out again and say that they will do less on climate change.” 

A lot will be determined by the choice of next permanent CEO, Berenberg analyst Henry Tar said in a note. “As the search for a new CEO begins, it is thus uncertain whether the next leadership team will stick with the existing plans or change tack, and until there is greater clarity on the management team and strategy, this uncertainty could weigh on the stock,” Tar said. 

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