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BP CEO Bernard Looney Resigns Over Past Relationships With Colleagues – WSJ

  • Executive was ‘not fully transparent’ in disclosures about relationships, company says
Bernard Looney began his tenure at championed the company’s move toward more renewable energy.

Jenny Strasburg, WSJ

LONDON
Energiesnet.com 09 12 2023

CEO Bernard Looney resigned abruptly Tuesday over past relationships with colleagues, the company said, less than four years after taking over the London-based oil giant and embarking on an ambitious plan to position it at the vanguard of the global transition to renewable energy.

Looney’s resignation was a surprise, and the company said in a release on Tuesday that his departure is immediate.

The company on Tuesday evening said Looney was “not fully transparent” about past personal relationships with colleagues. BP said Chief Financial Officer Murray Auchincloss would serve as CEO on an interim basis.

Looney had become the recognized face of BP, having quickly put his mark on the company as he steered it through the brutal first year of the pandemic. Amid steep losses and job cuts, BP sharply cut its dividend in 2020, before riding a wave of resurgent profits last year on high energy prices fueled by the global economic recovery and Russia’s invasion of Ukraine.

But BP and Looney had recently waffled over the pace of the energy transition and the company’s role in it. Like other European energy companies, BP has struggled to match the boom of major U.S. oil companies that have been rewarded for sticking with traditional fossil-fuel businesses and leaving low-carbon projects such as wind and solar to others.

BP said Tuesday that the company’s board in May 2022 reviewed allegations of what it said were Looney’s personal relationships with colleagues, based on anonymous information. It said Looney disclosed a small number of such past relationships that occurred before he became CEO. BP said it found no breach of company code.

But the board has received further allegations, which it continues to investigate. “Mr. Looney has today informed the company that he now accepts that he was not fully transparent in his previous disclosures,” according to BP’s statement. The Financial Times earlier reported Looney’s plans to step down.

Looney in 2019 was named as the successor to Bob Dudley, who had helped steer the company through the aftermath of the 2010 Deepwater Horizon rig explosion in the Gulf of Mexico that killed 11 people and led to tens of billions of dollars in penalties and lawsuit payouts.

During BP’s CEO-selection process in 2019, the board had candidates pitch their visions of the company’s future strategy, according to people familiar with the process at the time. With directors backing Looney over the competition, he was seen by investors as well as insiders as having a strong hand to forge a new path.

A native of Ireland and a BP lifer, Looney joined the company in 1991 as a drilling engineer and worked his way up to head of upstream before getting the top job at age 49.

Looney, now 53, quickly established himself as an outspoken advocate of the green revolution, with pledges to steer the oil company toward a cleaner, low-carbon future. He championed cutting oil-and-gas output this decade by 40% from 2019 levels and pledged to plow more money into clean-energy investments.

While initially well received by proponents of lower-carbon energy investment, that strategy came under pressure after the pandemic, when economies emerged from lockdowns and resumed their voracious consumption of fossil fuels.

BP’s profits, while still robust during a period of record profits for Big Oil, trailed its rivals, and investors signaled that they preferred superior returns in the short term over the longer-term commitment to renewables that Looney had championed.

Earlier this year, Looney dialed back that plan, saying he would slow the company’s transition away from fossil fuels—leading to a short-term bump in the share price.

Pressure on BP to prove it could boost lagging renewable-energy returns has continued to weigh on investor appetite for its shares. Looney and other executives have planned to host investors and analysts in Denver in October, showcasing the company’s U.S. oil and gas business and the biofuels business, Archaea Energy, that BP bought last year for $4.1 billion.

BP shares are mostly flat so far this year, compared with a gain of about 6% for its crosstown rival Shell, which under new CEO Wael Sewan has adopted a strategy that is more cautious about the returns currently possible through renewable-energy sources. Both companies still trail the market capitalizations of their American rivals,

.

Looney’s 2022 bonus was reduced as a result of safety issues including the deaths of two workers at a BP refinery in Ohio last year. His bonus was knocked down by 3.2%, or roughly $98,000, at the discretion of the board, while his total compensation more than doubled from the previous year, to around $12 million.

U.S. regulators have cited evidence that operational and training deficiencies were factors in the explosion at the oil refinery in Oregon, Ohio, just outside of Toledo.

BP has gone through abrupt executive transitions before. In 2007, then-CEO John Browne, who was largely responsible for building the company into a global powerhouse through a series of deals, stepped down after newspapers planned to publish details about his homosexuality.

  1. Business
  2. Energy & Oil

BP CEO Bernard Looney Resigns Over Past Relationships With Colleagues

Executive was ‘not fully transparent’ in disclosures about relationships, company says

By Jenny Strasburg

Updated Sept. 12, 2023 5:08 pm ET



Bernard Looney began his tenure at championed the company’s move toward more renewable energy. Photo: Sarah Blesener for The Wall Street Journal

BPBP -1.32%decrease; red down pointing triangle

CEO Bernard Looney resigned abruptly Tuesday over past relationships with colleagues, the company said, less than four years after taking over the London-based oil giant and embarking on an ambitious plan to position it at the vanguard of the global transition to renewable energy.

Looney’s resignation was a surprise, and the company said in a release on Tuesday that his departure is immediate.

The company on Tuesday evening said Looney was “not fully transparent” about past personal relationships with colleagues. BP said Chief Financial Officer Murray Auchincloss would serve as CEO on an interim basis.

Looney had become the recognized face of BP, having quickly put his mark on the company as he steered it through the brutal first year of the pandemic. Amid steep losses and job cuts, BP sharply cut its dividend in 2020, before riding a wave of resurgent profits last year on high energy prices fueled by the global economic recovery and Russia’s invasion of Ukraine.

But BP and Looney had recently waffled over the pace of the energy transition and the company’s role in it. Like other European energy companies, BP has struggled to match the boom of major U.S. oil companies that have been rewarded for sticking with traditional fossil-fuel businesses and leaving low-carbon projects such as wind and solar to others.

BP said Tuesday that the company’s board in May 2022 reviewed allegations of what it said were Looney’s personal relationships with colleagues, based on anonymous information. It said Looney disclosed a small number of such past relationships that occurred before he became CEO. BP said it found no breach of company code.

But the board has received further allegations, which it continues to investigate. “Mr. Looney has today informed the company that he now accepts that he was not fully transparent in his previous disclosures,” according to BP’s statement. The Financial Times earlier reported Looney’s plans to step down.

Looney in 2019 was named as the successor to Bob Dudley, who had helped steer the company through the aftermath of the 2010 Deepwater Horizon rig explosion in the Gulf of Mexico that killed 11 people and led to tens of billions of dollars in penalties and lawsuit payouts.

During BP’s CEO-selection process in 2019, the board had candidates pitch their visions of the company’s future strategy, according to people familiar with the process at the time. With directors backing Looney over the competition, he was seen by investors as well as insiders as having a strong hand to forge a new path.

A native of Ireland and a BP lifer, Looney joined the company in 1991 as a drilling engineer and worked his way up to head of upstream before getting the top job at age 49.

Looney, now 53, quickly established himself as an outspoken advocate of the green revolution, with pledges to steer the oil company toward a cleaner, low-carbon future. He championed cutting oil-and-gas output this decade by 40% from 2019 levels and pledged to plow more money into clean-energy investments.

While initially well received by proponents of lower-carbon energy investment, that strategy came under pressure after the pandemic, when economies emerged from lockdowns and resumed their voracious consumption of fossil fuels.

BP’s profits, while still robust during a period of record profits for Big Oil, trailed its rivals, and investors signaled that they preferred superior returns in the short term over the longer-term commitment to renewables that Looney had championed.

Earlier this year, Looney dialed back that plan, saying he would slow the company’s transition away from fossil fuels—leading to a short-term bump in the share price.

Pressure on BP to prove it could boost lagging renewable-energy returns has continued to weigh on investor appetite for its shares. Looney and other executives have planned to host investors and analysts in Denver in October, showcasing the company’s U.S. oil and gas business and the biofuels business, Archaea Energy, that BP bought last year for $4.1 billion.

BP shares are mostly flat so far this year, compared with a gain of about 6% for its crosstown rival Shell, which under new CEO Wael Sewan has adopted a strategy that is more cautious about the returns currently possible through renewable-energy sources. Both companies still trail the market capitalizations of their American rivals, Exxon Mobil and Chevron

Looney’s 2022 bonus was reduced as a result of safety issues including the deaths of two workers at a BP refinery in Ohio last year. His bonus was knocked down by 3.2%, or roughly $98,000, at the discretion of the board, while his total compensation more than doubled from the previous year, to around $12 million.

U.S. regulators have cited evidence that operational and training deficiencies were factors in the explosion at the oil refinery in Oregon, Ohio, just outside of Toledo.

BP has gone through abrupt executive transitions before. In 2007, then-CEO John Browne, who was largely responsible for building the company into a global powerhouse through a series of deals, stepped down after newspapers planned to publish details about his homosexuality.

Write to Jenny Strasburg at jenny.strasburg@wsj.com

wsj.com 09 12 2023

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