Bernard Looney resigns as BP chief executive 'with immediate effect'

Energy company says former boss 'accepts he was not fully transparent in previous disclosures' about relationships with colleagues

Bernard Looney joined BP in 1991 at the age of 21 and has spent his entire career at the company. AFP

BP chief executive Bernard Looney has resigned with immediate effect after accepting that he was not “fully transparent” in his disclosures about past relationships with colleagues.

Mr Looney, 53, took over the role in 2020, replacing Bob Dudley, who retired.

His resignation followed previous allegations of personal relationships with colleagues before he became chief executive.

An investigation by the company last year found Mr Looney's behaviour did not breach its code of conduct.

However, similar allegations later surfaced, which led to a second investigation by the company that is still continuing.

BP said Mr Looney now “accepts that he was not fully transparent in his previous disclosures”.

He joined BP in 1991 at the age of 21 and has spent his entire career at the company.

As chief executive, he was given the task of turning the company into an integrated energy organisation.

He had been in the role for less than four years, pledging the company would become carbon neutral by the middle of the century.

Mr Looney aimed to cut oil and gas production to reduce emissions while investing in clean energy technology such as wind power, hydrogen and electric vehicle charging.

Nick Butler, a visiting professor at King’s College who is an energy economist specialising in the economic and political aspects of the transition to a lower carbon world, told The National BP's green future depended on who wass appointed as his successor.

“BP is a company that is very much individually led. The CEO is very important. And who they choose to appoint will set the agenda and it could be different or it could be an extension,” he said.

“Bernard started things going. He probably didn’t get it pushed forward as much as he liked. But now there is a real choice to be made.”

Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown told The National BP’s approach to net zero has set it apart from peers and it "would be a mistake to upset that trajectory".

“Investors will want proof that Looney’s replacement has the ability to drive forward BP’s net zero targets," she said.

"Despite these being trimmed in recent times, Looney was still seen as being an important force in overhauling BP’s approach to green energy and climate impact.

"With that in mind, there’s hope that the group’s net zero targets will be kept intact, if not extended, by the new CEO. Until there’s further clarity on who will be taking the top spot, it will be tough for the market to be too excited by the stock."

The energy company's shares weathered the storm on Wednesday, dropping by as much as 1.8 per cent after the London market opened, but soon paring back losses to edge about 0.4 per cent lower in morning trade.

Mr Looney did not respond to requests for comment.

BP said Murray Auchincloss, the company's chief financial officer, would act as chief executive on an interim basis.

“In May 2022, the board received and reviewed allegations, with the support of external legal counsel, relating to Mr Looney's conduct in respect of personal relationships with company colleagues,” the company said.

“The information came from an anonymous source. During that review, Mr Looney disclosed a small number of historical relationships with colleagues prior to becoming CEO. No breach of the company's code of conduct was found.

“However, the board sought and was given assurances by Mr Looney regarding disclosure of past personal relationships, as well as his future behaviour.

“Further allegations of a similar nature were received recently, and the company immediately began investigating with the support of external legal counsel. That process is ongoing.

“Mr Looney has today informed the company that he now accepts that he was not fully transparent in his previous disclosures.

“He did not provide details of all relationships and accepts he was obligated to make more complete disclosure.”

No decisions have yet been made in respect of any remuneration payments to be made to Mr Looney, BP said.

His departure follows other senior executive resignations in recent years due to personal relationships with employees.

Former McDonald's chief executive Stephen Easterbrook was ousted from his role at the fast food company in November 2019 for engaging in a personal relationship with an employee in breach of company policy.

'A clear path'

Ms Lund-Yates said BP needed to forge a clear path to replacing Mr Looney “sooner, rather than later, to limit negative sentiment”.

“This, of course, all lands at a time when oil majors are already grappling to boost their ESG [environmental, social and governance] credentials, which adds weight to the problem,” said Ms Lund-Yates.

“Mr Looney has spearheaded an aggressive and green-thinking strategy during his tenure, and replacing him with someone that can convince the market they're up for carrying the mantle and sprinting with it, isn't going to be an overnight task.”

David Hewitt, an analyst at Liberum, said the vacancy in the top job presents BP with an opportunity to possibly “be the first 'supermajor' to appoint a female CEO”.

“There is a wealth of quality in the current senior management team,” he said.

Mr Butler, who worked at BP with Mr Looney and described him as popular in the company, brought in a lot of new people.

“I think there are also people who have worked for BP who are working in different areas now, different other companies who could come in,” he told The National.

“It’s a big job, it’s tough because there is so much challenge and so many issues. But it’s a great job and I think there will be a good list of candidates.”