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Donald Trump’s inaugural speech as US president this week included praise for fossil fuels and “liquid gold beneath our feet”. Although BP has large oil and gas operations and reserves in Texas and the Gulf of Mexico (or the US), you have to dig deep to find gold in its cash.
UK company now Traces Another big investor-owned energy sector is priced at market value: not only a sixth of ExxonMobil’s price, but less than half that of old Anglo-Dutch rival Shell. He announced Last week it was cutting 4,700 jobs in a renewed effort to become a “leaner, more focused and high-value company”.
But BP has made many statements about the future over the years and has a disappointing record. It has also gone through a few CEOs, the most recent being Murray Auchincloss, who just had to do it Extend it A long-awaited strategy update for investors to recover from the medical process next month.
Auchincloss replaced Bernard Looney, who was He was fired In the year In 2023, allegations of misconduct were made against his former colleagues. “It’s almost Shakespearean. This company is star-crossed,” reflects a BP veteran. It has indeed experienced a series of tragedies as it tries to appease investors and respond to climate change.
Worst of all was the 2010 Deepwater Horizon oil spill, which killed 11 workers, polluted the Gulf of Mexico and forced it to sell its assets for a $65 billion bill. The company took a long time to recover and arguably never has—it still has net debt of $24bn and only approved The sixth stage in the Gulf last year, in the field that he achieved for the first time in 2006.
Then came Looney’s pledge five years ago to cut BP oil and gas production by 40 percent by 2030 and “reimagine energy for people and the planet.” This was bolder in its rhetoric than its substance, and BP has been moving away from it ever since, as high interest rates have demonstrated the ability to build wind farms cheaply.
Quaker In 2022, Vladimir Putin invaded Ukraine, forcing BP to divest its minority stake in Russian oil company Rosneft at a cost of $25 billion. In the year He was eventually fired in the mid-2000s for making large sums of money from TNK-BP, working in partnership with a group of oligarchs. Like others, Russia took it in stride.
But companies make their own fortunes, and BP can’t simply say they’re lucky. A thread that runs through his recent history is his great sense of will and purpose that exceeds his ability to execute plans. While ExxonMobil remains on par with the world, BP is vulnerable to ambition.
This goes to Lord John Brown, who transformed the company as CEO by acquiring Amoco and Arco in the US and striking the TNK-BP deal. He also brought intellectual rigor to strategy, including the thinly veiled idea that BP would go “beyond oil.” The slogan didn’t last but the legacy is that every BP leader needs a vision.
BP is not a cowboy outfit. Despite the Deepwater Horizon delay, its operations are generally well managed, and it takes compliance seriously. But he has more intelligence than instinct (“There’s a lot of smart people out there,” says an observer, not entirely as a compliment). Another calls it “more like a government than a business,” lacking the powerful profit motive of its competitors.
The 2016 Paris Agreement to limit global warming was driven in part by social and governmental pressure to release carbon. It also hopes to attract investment from ESG funds and benefit from the financial transition. But that failed and it didn’t respond as fast as Shell. Changing the course. It was plagued by poor financial results, executive dysfunction and a lack of strategic decision-making.
BP now faces a world where Trump is telling oil companies to “drill, drill, drill” and pull the US out of the Paris accord. Meanwhile, Greenpeace has been accused of greenwashing for not decarbonizing fast enough. If the past few years have proven anything, it’s that it’s impossible to please both parties, especially for an energy company headquartered outside the US.
Three months before Deepwater Horizon, the market price of BP In short, it passed But Shell is now far behind. There will be many bankers asking if they can fix or take the merger. If BP is to remain independent, it needs to show investors that it can get things done rather than looking ahead. There is such a thing as being too smart.
