The clearing of the decks continues apace at BP. The last chief executive, Murray Auchincloss, got the heave-ho in December. Last month brought news of hefty write-downs on the troublesome low-carbon energy assets in solar and biogas. Now comes an admission that the current debt-reduction measures aren’t enough to ease the strain on an over-extended balance sheet. Share buy-backs are being suspended.
Buy-backs have become the essential symbol of financial virility in today’s oil industry. At the right price, they represent an efficient use of excess capital and are a way for managements to send obligatory signals about “financial discipline”, meaning refraining from empire-building adventures.
