BP sticking with energy transition strategy: interim CEO

LONDON: BP’s interim CEO Murray Auchincloss said on Wednesday the company won’t be derailed from its energy transition strategy by former leader Bernard Looney’s abrupt resignation amid misconduct allegations.

BP scaled back its energy transition strategy earlier this year but still stands out among rivals as the only oil major with plans to cut oil and gas output by 2030 by 25%.

Looney had held the top job at the British oil giant since February 2020 and led a radical transformation. He stepped down on Tuesday over allegations of personal relationships with company colleagues.

Auchincloss told staff in a brief town hall meeting on Wednesday that the company’s aims were unchanged.

“Our strategy hasn’t changed. And our focus remains on performance – quarter by quarter,” Auchincloss, who was previously chief financial officer, told staff, according to a company spokesperson.

BP’s top leadership team is also unchanged and “we have the full support of the Board to continue to deliver the plan we have laid out,” he added.

BP’s board has started searching both internally and externally for a new permanent chief executive, Chairman Helge Lund told the town hall, according to sources in the meeting, which lasted around 10 minutes.

A company spokesperson declined to comment.

The fresh allegations of misconduct against 53-year-old Looney prompted BP’s board to launch an investigation after it investigated similar allegations in May 2022 against the Irishman, who had given assurances of his future behaviour, according to a statement.

As part of his energy transition strategy he had committed to BP reaching net-zero emissions by 2050.

Investors have responded coolly to the strategy, with BP’s shares underperforming peers since Looney took over and rising more than rivals when the plan was scaled back in February revision.

Auchincloss worked closely with Looney in devising BP’s strategy in recent 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.

“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.” BP shares were down 1.4% at 1240 GMT, compared with a 0.1% decline for the broader European energy index.

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

BP’s strategy came under renewed scrutiny after rival Shell slowed down its energy transition strategy in June, scrapping plans to cut oil output.

The BP board could yet opt to make some small changes without changing the overall plan, 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.”