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BP chief Dudley to call time on decade running major oil company | Business News

By September 29, 2019 No Comments
British energy giant BP CEO Bob Dudley

Bob Dudley, the chief executive of BP, is preparing to step down after a decade-long tenure in which he steered the British oil giant back from the brink after the Gulf of Mexico disaster.

Daily Week News can exclusively reveal that Mr Dudley is drawing up plans to retire from the job within about 12 months.

The American, who turned 64 earlier this month, is said to have detailed discussions with BP’s chairman Helge Lund about his retirement plans.

City sources said this weekend that an announcement about Mr Dudley’s decision to step down was possible by the end of this year, and could come by the end of October, when BP is due to report third-quarter results.

It was unclear on Saturday whether BP would announce Mr Dudley’s successor at the same time as his departure.

Bernard Looney, BP’s upstream chief executive – which incorporates the company’s exploration, development and production activities – is widely regarded as the front-runner to replace Mr Dudley.

The oil giant’s chief financial officer Brian Gilvary is also highly regarded by investors, while Mr Lund is also expected to have been assessing external candidates since becoming chairman last year.

Mr Dudley is under no pressure to step down, meaning a lengthy handover to his successor is possible and could take place after he has turned 65.

One source said it remained possible, although unlikely, that no announcement would be made by BP until 2020.

Mr Dudley is the longest-serving boss of any of the world’s oil majors, including Royal Dutch Shell and Exxon Mobil Corporation.

Whatever the precise timing of his retirement, the appointment of BP’s next CEO will be a landmark moment for one of Britain’s most important companies.

Boardroom planning for the arrival of a new chief executive will come during a period of intense pressure on the world’s largest oil companies to slash their carbon emissions.

At BP’s annual meeting in Aberdeen in May, investors voted in favour of greater disclosure by the company of its plans to meet climate change goals set at the Paris conference in 2015.

Mr Dudley said this month that the company would sell some of its most carbon-intensive projects and reduce investment in others in order to improve its environmental footprint.

“We are certain we’ve got a path – it may not be linear – to being consistent with the Paris goals,” he told a conference hosted by JP Morgan, the investment bank.

“There are going to be projects that we don’t do, things that we might have done in the past – certain kinds of oil, for example, that has a different carbon footprint.”

BP has, however, declined to set firm targets for reducing carbon emissions, inflaming a growing international campaign against oil companies that has attracted some of the world’s largest institutional investors.

In February, BP said it would back a resolution proposed by investors participating in the Climate Action 100+ initiative to pave the way for clearer environmental reporting in its accounts.

It added that it would also assess greenhouse gas emission reductions in its calculation of bonuses for 36,000 employees around the world.

Mr Dudley’s 10 years at the top of BP were initially dominated by the company’s efforts to rebuild after the Deepwater Horizon explosion and oil spill that killed 11 workers and threatened the company’s existence.

The American replaced Tony Hayward, whose frequently quoted remark that he wanted “my life back” drew the ire of President Barack Obama.

The accident ultimately cost BP approximately $65bn in compensation payouts and fines, although the company complained bitterly that some of the money it was forced to pay was claimed fraudulently by local businesses.

Mr Dudley oversaw a radical streamlining process in order to foot the bill, selling tens of billions of pounds-worth of assets for what analysts and rivals regarded as attractive prices.

For a period, BP appeared to be vulnerable to a takeover bid from Exxon-Mobil, its larger US rival, although a formal approach never materialised.

The company has since recovered much of the value it lost in the aftermath of the Gulf of Mexico crisis, and at Friday’s closing price had a market capitalisation of just over £106bn.

Shares in BP have fallen by about 12% during the last year.

Mr Dudley has sought to reposition BP towards growth-oriented projects and has invested heavily in shale oil, buying BHP’s unconventional US assets for $10.5bn last year.

He has also forged substantive partnerships in key markets such as India.

Prior to taking over as BP’s chief executive, he endured an often-turbulent period running the company’s Russian joint venture, which resulted in him being forced into hiding in 2008 amid a bitter dispute with its partners in the country.

BP eventually sold its stake in TNK-BP in a $55bn deal in 2013, with the transaction handing the FTSE-100 company billions of pounds in cash and a 12.5% stake in Rosneft, Russia’s state-owned energy behemoth.

One source who has advised BP said it was important not to understate the extent to which BP’s Russian crisis had also threatened the company’s future.

“Bob was also responsible for getting BP out of a mess there,” the source said.

“When he goes, he will be missed.”

Mr Dudley’s tenure was also marred by a series of rows over his pay, most notably in 2016 when 59% of shareholders opposed his £14m pay package.

Since then, opposition has been more muted, and a consultation on its next three-year pay policy is not expected to trigger a renewed revolt among shareholders.

BP said on Saturday that it did not comment on speculation.

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