Oil & Gas News

BP to Stick With Energy Transition Strategy

BP, Energy

Helge Lund, Chairman of BP, assured employees that the company’s energy transition strategy would remain unchanged despite the sudden departure of CEO Bernard Looney, according to insiders. The announcement was made during a brief internal town hall meeting.

Mineral RightsThe search for a new CEO is underway, with BP’s board considering candidates both within and outside the company, Lund revealed. The company spokesperson chose not to comment on the matter.

Looney stepped down on Tuesday amid recent allegations concerning personal relationships with fellow employees, triggering an internal investigation. This follows a similar inquiry in May 2022, after which Looney had committed to future conduct changes.

Appointed in February 2020, Looney had aimed to transform BP into a net-zero emissions entity by 2050. Although he scaled back these plans earlier this year, BP remains unique among oil majors, pledging to reduce oil and gas production by 25% by 2030.

Investor reaction to BP’s strategy has been lukewarm, with the company’s stock lagging behind competitors since Looney’s tenure. However, the shares have outperformed those of rivals following the strategy’s revision in February.

Murray Auchincloss, the company’s Chief Financial Officer, has been named interim CEO. Having joined BP in 1998, the Canadian executive has been instrumental in shaping BP’s current strategy, particularly by focusing on high-return legacy oil and gas assets, which contributed to a record $28 billion in profits last year.

Auchincloss is not expected to deviate from the existing strategy. “Murray has been a key player in all major decisions. The board owns the strategy, and it’s unlikely to change,” said an internal source.

BP’s stock was down 1.4% at 1240 GMT, compared to a 0.1% decline in the broader European energy index.

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The company plans to invest between $55 and $65 billion in renewable energy sectors like solar, wind, biofuels, and hydrogen by 2030, which will then constitute half of its capital expenditure.

BP’s approach was reevaluated after competitor Shell scaled back its own energy transition plans. However, insiders say that while minor adjustments may occur, BP’s overarching strategy is expected to remain intact. “The board has enough leeway within the current strategy to focus more on cash flow,” said a source close to the company, adding, “No one wants to backtrack on climate commitments.

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