Shock BP CEO resignation leaves investors unfazed
BP's shares were trading lower by 1pc soon after the London stock exchange opened this morning, following the company's announcement of the sudden resignation of chief executive Bernard Looney last night.
BP said on Tuesday, 12 September, that Looney had resigned after he accepted that "he was not fully transparent" about previous disclosures of historical relationships with colleagues prior to becoming chief executive.
Analysts noted that chief financial officer Murray Auchincloss, who has been appointed as interim chief executive, is well respected in the investor community. But bank RBC raised the prospect that BP's strategy might be tweaked further under its temporary boss.
"The bottom line is that the world has clearly changed since Bernard took over as CEO," the bank's analysts said. "Views on [environmental, social and corporate governance] and the energy transition have evolved dramatically, and the outlook for the commodity business has also." They pointed out that with Auchincloss at the helm BP might see a step back "with more focus on value and value growth in the core business."
When Looney took over from Bob Dudley as chief executive in February 2020 he embarked on a plan of "greening" BP, which included bold targets to aggressively slash its oil and gas production and build a 50GW portfolio of renewable power production by 2030. But the company's share price performance has lagged not only those of its US peers, which enjoy greater earnings multiples than the European majors, but also those of Shell and TotalEnergies.
Looney's tenure as chief executive began when the Covid-19 pandemic was spreading, and BP's shares hit a trough in October 2020. But they have only this year recovered to trade at their pre-pandemic levels — they are currently around 15pc higher than on 1 January 2020 — while Shell's and TotalEnergies' shares are 28pc and 40pc higher respectively.
On 7 February, Looney scaled back some of his 2030 targets for BP, saying the company would no longer target production of 1.5mn b/d of oil equivalent (boe/d) by the end of the decade and target 2mn boe/d instead. That day saw BP's shares bounce by more than 7pc.
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