Oil giant BP was hit with a major blow on Tuesday as CEO Bernard Looney abruptly resigned. Looney admitted to misleading the company regarding his personal relationships with colleagues, prompting his departure. BP released a statement on its website, acknowledging Looney’s lack of transparency and failure to disclose all of his relationships.
Although the nature of these relationships was not disclosed, it is clear that Looney’s conduct in this regard had been under investigation. In May 2022, BP’s board looked into allegations of Looney’s “conduct in respect of personal relationships with company colleagues.” The investigation found that these relationships predated Looney’s appointment as CEO and did not violate BP’s code of conduct. However, recent allegations of undisclosed relationships prompted another investigation, leading to Looney’s resignation.
In response to Looney’s resignation, BP announced that its chief financial officer, Murray Auchincloss, would serve as interim CEO. This news had a negative impact on BP’s stock, as it closed down more than 1 percent.
This development comes at a time when BP is already undergoing a significant transition. The company recently scaled back its ambitious goals for reducing reliance on fossil fuels, even as oil profits soared. Looney, who became CEO in February 2020, had initially planned to reshape BP into a clean energy pioneer, setting a target for the company to achieve net zero emissions by 2050. However, under his leadership, BP curbed some of these ambitions. In February, the company announced lower targets for cutting oil production, despite record-breaking profits in 2022.
BP’s profits last year totaled $27.7 billion, more than double its 2021 profits. This windfall drew criticism, even from the highest levels of government. The substantial earnings were largely the result of global supply constraints caused by sanctions on Russia following its invasion of Ukraine. These profits were made at a time when drivers faced high gasoline costs, paying an average of over $5 per gallon at one point.
Looney himself benefited from BP’s successful year, as his pay doubled to $12 million. However, as he departs the company, BP has not yet made any decisions regarding remuneration payments to Looney.
Since then, BP’s profits have declined significantly, with last quarter’s earnings falling 70 percent compared to the same period in 2022.
Looney, who had been with BP his entire career since joining as an engineer in 1991, held positions in various regions, including North America, Asia, and Europe. Auchincloss, the new interim CEO, had been BP’s chief financial officer since the summer of 2020.
The sudden departure of BP’s CEO amid controversy and the company’s shifting goals in the face of strong oil profits highlights the challenges the oil giant faces in navigating an evolving energy landscape.