Why does BP CEO Bernard Looney Step Down?

BP announced on Tuesday that the 53-year-old CEO Bernard Looney was resigning due to his failure to fully disclose past relationships with colleagues to the company board. Chief Financial Officer Murray Auchincloss will serve as interim CEO.

Looney’s sudden departure as CEO of BP signifies the loss of an executive who championed a more aggressive transition to clean energy. Looney’s exit comes after three tumultuous years leading BP through its most radical strategic shift since John Browne transformed the company into a transatlantic giant by acquiring US rivals Amoco and Atlantic Richfield Co. over two decades ago. From the North Sea to West Texas, Looney spearheaded BP’s efforts to venture into greener areas, such as hydrogen and offshore wind.

Edward Jones analyst Faisal Hersi called the change at the top “definitely a big surprise” and suggested that a shift back to a more fossil-fuel-centric strategy would be positive, as BP’s energy transition pace had been overly ambitious.

In 2020, shortly after assuming the role of CEO, Looney announced BP’s ambitious commitment to achieving net-zero emissions, aiming to combat climate change. This move was bold given that BP was considered a climate laggard at the time, and Browne’s previous attempt to rebrand BP as “Beyond Petroleum” in the early 2000s largely resulted in financial losses.

Investors had a lukewarm response to Looney’s approach as the company’s valuation fell below $50 billion due to the COVID-19 pandemic’s impact on revenue and a dividend cut. Despite the challenges, Looney earned praise for his shareholder-friendly management, commitment to clean energy, and effective capital allocation.

Born to an Irish dairy farmer, Looney joined BP as a drilling engineer in 1991, making him the first in his family to graduate from college. He rose through the ranks, working in Alaska and the Gulf of Mexico, and became part of an elite group of executives known as the “turtles” under former CEO Browne. Looney’s predecessors, Tony Hayward and Bob Dudley, also came from this group, making Looney the last of the turtles.

Looney’s leadership style differed significantly from his more reserved predecessor, with a more open and socially engaged approach. He often used Instagram to share messages on a wide range of topics, championed mental health initiatives, and promoted gender diversity in his leadership team.

BP initially found no breaches of its code of conduct when reviewing allegations related to Looney’s past personal relationships with colleagues in 2022. However, additional allegations emerged recently, prompting Looney to admit that he had not been fully transparent during the previous investigation, leading to his resignation

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