The BP chairman, Helge Lund, has started the hunt for a new boss to replace Bernard Looney, which could lead to the oil giant’s first external chief executive hire for decades.
The chairman told BP staff in a webcast on Wednesday that he had begun the process of appointing a new chief executive and would consider hiring company outsiders to the role.
“We have initiated a process now to appoint the next CEO – we’ll look at internal and external candidates,” he said.
BP is under pressure to assure the markets of its succession plans after the shock exit of Looney earlier this week amid an ongoing investigation into allegations of undisclosed personal relationships with company colleagues.
BP said that Looney had admitted that he had not been “fully transparent in his previous disclosures” and “accepts he was obligated to make more complete disclosure”.
The oil giant has traditionally hired its chief executives from within its own ranks, and has not hired an outsider for its top job in in at least 30 years. But industry experts believe that appointing an outsider cannot be ruled out.
Lund did not give staff a timeline for the company’s search for a permanent chief executive.
The role is currently being filled by BP’s chief financial officer, Murray Auchincloss, on an interim basis. Auchincloss was appointed the company’s chief financial officer in July 2020, months after Looney stepped into the top job in February that year.
Lund said in the company’s 2019 annual report that Looney “was identified as the best suited candidate” by BP’s nominations committee following “a thorough and transparent process”.
In the same year the committee also undertook a review of the executive succession pipeline, he said, which had considered “the process, emerging talent and leadership role key-person risks”.
BP’s governance has come into question after industry insiders claimed that Looney’s workplace relationships were “an open secret” which predated his appointment as chief executive.
Looney became the third of BP’s last four bosses to leave abruptly from the oil giant when he announced his decision to step down on Tuesday evening with immediate effect.
Former BP boss, John Browne, a key mentor to Looney, left the company in 2007 after it was revealed he had lied to a court about his relationship with another man. Browne’s successor Tony Hayward stepped down by “mutual agreement” three years later following his handling of the Deepwater Horizon oil rig explosion and the subsequent environmental disaster. Only Bob Dudley, who preceded Looney, retired from the company without controversy.
Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, said: “BP is now in a position where a permanent replacement needs to be found. A clear path forward needs to be forged sooner rather than later to limit negative sentiment.”
Giacomo Romeo, an oil industry equities analyst, said the appointment of Auchincloss as interim chief executive suggested “a certain level of continuity of BP’s strategy”. He said Auchincloss and Lund were both considered likely internal replacements for the top job.
“An external hire, while not traditionally an option chosen by BP, can’t be ruled out,” Romeo added.
Lund told the staff webcast: “While the person in the CEO’s chair has changed, the fundamentals have not changed.” He added that the company’s focus on safety and strategy would remain, alongside BP’s focus on performance.
“The leadership team we have in BP is also unchanged,” Lund said. “It’s a team with huge depth and experience, with a record of performance. And together we have the full support of the board to continue to deliver the plan we have laid out.”
