bp names Murray Auchincloss CEO after predecessor Bernard Looney’s shock resignation

Laura Hurst, Bloomberg January 17, 2024

(Bloomberg) – bp Plc appointed Murray Auchincloss as its permanent chief executive officer, four months after the shock resignation of his predecessor.

bp CEO Murray Auchincloss (Photographer: Christopher Pike/Bloomberg)

The decision ends a period of uncertainty for the London-based oil major and indicates a continuation of the company’s existing plan for the transition to clean energy.

Even so, Auchincloss  — who had been serving as interim CEO — faces significant challenges as he seeks to move the company on from the scandal that brought down Bernard Looney, while also getting investors to support the long-term strategy laid out by his predecessor.

“Continuity of the existing strategy is no bad thing,” said Derren Nathan, head of equity research at Hargreaves Lansdown. “Auchincloss certainly has a job to do to restore investor confidence and close the valuation gap with archrival Shell, and an even wider gulf with its U.S. peers.”

According to people who have worked with Auchincloss directly, both within bp and externally, the new CEO’s character stands in contrast to his gregarious predecessor. Looney, 53, was known in the company and beyond as a people person, with an uncanny ability to remember employees’ names and backgrounds, even in bp’s far-flung operations around the world.

bp’s former chief stood down Sept. 12 after admitting he’d failed to fully disclose past relationships with colleagues. Looney misled the company’s board and will forfeit as much as £32.4 million ($40.8 million) in pay, bp said last month.

Auchincloss, a 53 year-old Canadian, is less of a social butterfly. He has shied away from the limelight, telling senior employees in the weeks after he was appointed as interim CEO that he would be limiting interviews with journalists and would not be posting on social media. He is rarely seen wearing a suit around the company’s London headquarters, preferring casual dress. He has a young child with his partner, who is also a bp employee. That relationship had been previously disclosed and appeared in financial filings from April 2021.

He has worked at bp since the company’s merger with Amoco in 1998 and held positions including chief of staff to former CEO Bob Dudley. He was named chief financial officer in 2020, a few weeks before Looney unveiled bp’s net zero strategy.

Lagging peers. Auchincloss’s “deep understanding of the opportunities and challenges in the energy transition will serve bp well as we continue our disciplined transformation to an integrated energy company,” Chairman Helge Lund said in a statement on Wednesday.

During his time as interim CEO, Auchincloss stuck with Looney’s strategy of favoring growth in clean energy and a plan to keep oil and gas output flat for the rest of this decade, a plan that has had a mixed reception from investors as the company’s shares have lagged rivals.

bp shares fell 1.3% to 446.25 pence as of 9:8 a.m. in London amid a broader decline in oil and gas stocks.

As bp grappled with the turmoil created by Looney’s sudden departure, its U.S. competitors have spent more than $100 billion on big acquisitions, doubling down on oil and gas in what analysts predict will be a wave of consolidation within the industry.

Lately, bp has been seen more as a potential takeover target rather than a buyer. Auchincloss has batted away such speculation, but the gap between the London-based company and peers such as Exxon Mobil Corp. or Chevron Corp. has rarely been wider.

The appointment of Auchincloss on a permanent basis “represents the best possible outcome for bp shareholders in the short term,” RBC analyst Biraj Borkhataria said in a note. “With less focus on takeout speculation and potential strategy shifts, we believe investors should be able to focus more on the portfolio, underlying growth and potential returns.”

He was selected after a “robust and competitive search process,” according to the statement. A range of candidates were considered, including people from outside bp. By appointing Auchincloss, bp’s board has stuck with the company’s long tradition of choosing its top executive from within its own ranks.

Auchincloss will receive an annual salary of £1.45 million, a cash allowance in lieu of pension equal to 20% of his salary and performance-related bonuses.

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