The largest take a look at of Bernard Looney’s legacy at BP shall be how a lot of his technique survives his shock departure.
That plan was probably the most dramatic ever unveiled by the chief govt of a British firm.
Not one of the so-called supermajors – BP, Exxon, Shell, Whole, Chevron, ConocoPhillips and Eni – had, when in February 2020 Mr Looney gave a primary flavour of what he was planning, ever said publicly that they anticipated their oil and fuel manufacturing to fall over time.
Months later, with the world now within the grip of the pandemic, Mr Looney fleshed out these plans with extra element and got here up with one thing much more shocking. He stated that BP didn’t anticipate to extract the entire oil and fuel sitting in its reserves – stating successfully, within the slogan beloved of local weather activists, the corporate can be leaving a few of it “within the floor”.
This, together with a pledge to make BP internet zero by the center of the century, was actually revolutionary stuff.
What shone by means of, on this interval, was Mr Looney’s willpower to drive by means of an agenda extra radical than that of something tried by BP’s friends. It was knowledgeable by a conviction that the pandemic would speed up the transition away from fossil fuels to non-carbon vitality sources.
That agenda, although, offered an immense problem.
Primarily, the duty Mr Looney set BP was to step up funding in options to fossil fuels whereas, on the similar time, persevering with to maximise income from the corporate’s conventional actions to maintain shareholders onside and likewise to pay for that funding.
A yr into the job, Mr Looney was nonetheless stressing the significance of sticking to that agenda, however by then it was already clear he had not satisfied all of BP’s buyers that the brand new actions into which he was taking the corporate can be as worthwhile as those that had served it so effectively over the earlier 111 years.
Scepticism over BP’s potential to generate the identical returns in future that it had from its fossil gasoline actions noticed BP’s share value underperform these of its friends and, specifically, US supermajors like Exxon which remained explicitly wedded to fossil fuels.
That scepticism solely intensified when, for instance, BP was deemed to have overpaid in an public sale for licences to construct offshore windfarms within the Irish Sea.
Very progressively, Mr Looney was pressured to tone down a few of the radical facets of his technique.
By late 2021, on the time of the COP26 local weather summit in Glasgow, he was having to reiterate the corporate’s credentials in oil and fuel manufacturing, reminding buyers that, whereas BP was investing closely within the vitality transition, it was nonetheless investing in oil and fuel manufacturing as effectively.
It led to his unlucky – and oft-repeated – declare that, with crude costs at elevated ranges even earlier than Russia invaded Ukraine, that BP was a “money machine.”
By no means extra was that trimming of BP’s ambitions on the vitality transition extra deeply underlined than when, earlier this yr, Mr Looney scaled again a plan to chop BP’s hydrocarbon manufacturing by 2030 by 40% of its 2019 ranges to simply 25%.
Local weather campaigners – for whom BP may by no means transfer shortly sufficient – stated this proved the corporate was not honest.
However the transfer was additionally borne of pragmatism as a result of, by then, the corporate had been pressured to dump its 20% stake within the Russian oil and fuel producer Rosneft in response to the struggle in Ukraine.
The lack of that vastly money generative asset not solely made BP one of many world’s largest company casualties from Vladmir Putin’s warmongering. It additionally disadvantaged the corporate of significant cashflow that could possibly be directed to each shareholders and invested within the transition.
The large query now’s the place BP goes from right here and whether or not Mr Looney’s successor will stick along with his ambitions. A change of emphasis has definitely been discernible over on the firm’s previous rival Shell.
It too has simply seen a altering of chief govt and the brand new man, Wael Sawan, has been notably much less enthusiastic in discussing the transition than was his predecessor Ben van Beurden.
Discovering Mr Looney’s successor won’t be straightforward. At 53, he had a few years forward of him.
One doable candidate, although, could possibly be Charles Woodburn, the chief govt of BAE Programs.
It’s not overstating issues to say that he has completed an excellent job on the defence large – which has already made him a goal for different FTSE 100 firms.
The mining large Rio Tinto, for instance, is claimed to have tried to poach him final yr. Mr Woodburn rejected these overtures however, having begun his profession within the oil and fuel business, he might discover an strategy from BP more durable to withstand.
One other identify to look out for could possibly be Tufan Erganbilgic, a former BP govt, now operating the plane engine maker Rolls-Royce.
Both of these names would go down effectively with BP shareholders, as would Brian Gilvary, BP’s former chief monetary officer, who left the corporate in June 2020. However Dr Gilvary, one of many key figures in saving BP from collapse following the Macondo catastrophe within the Gulf of Mexico in 2020, seems to be having an excessive amount of enjoyable in his post-BP profession, having garnered a lot of senior roles, together with one at Ineos, Sir Jim Ratcliffe’s petrochemicals empire.
Both means, Mr Looney’s departure means a hyperlink with BP’s storied previous is about to be severed.
Mr Looney was the final of the elite cadre of executives – nicknamed ‘turtles’ after the Teenage Mutant Ninja Turtles – whose careers have been nurtured by BP’s visionary former chief govt, John Browne.
Two different ‘turtles’, Tony Hayward and Bob Dudley, went on to turn out to be BP’s chief govt however Mr Looney was the final of the road.
It’s deeply ironic that Mr Looney, like his mentor Lord Browne, has needed to depart BP, his work half-done, attributable to his private life. It’s also tragic for each him and for the corporate he liked.