BP shares sink after CEO quits over relationships

BP shares sink after CEO quits over relationships

BP CEO Bernard Looney is leaving after less than four years in the role
BP CEO Bernard Looney is leaving after less than four years in the role. Photo: Arun SANKAR / AFP/File
Source: AFP

Unlock the best of Legit.ng on Pinterest! Subscribe now and get your daily inspiration!

Shares in British energy major BP sank Wednesday after chief executive Bernard Looney resigned unexpectedly over his failure to disclose past relationships with colleagues.

BP's stock slid 2.8 percent to close at 508.20 pence on London's flat FTSE 100 index, despite rising oil prices that normally boost energy firms.

The company announced late Tuesday that Looney, 53, resigned "with immediate effect" after admitting he had not been "fully transparent" about historical relationships with colleagues.

The Irishman is leaving after less than four years in the role, having steered the energy major through a tumultuous period that included huge swings in prices owing to the Covid pandemic and Russia's invasion of Ukraine.

"The higher oil price might limit some of the fallout from the shock resignation... but this is a highly unwelcome turn of events for investors given his long tenure at the company and his pivotal role at the helm as it navigates the tricky transition to greener energy," said Susannah Streeter, head of money and markets at Hargreaves Lansdown.

Read also

BP shares drop after CEO quits over relationships

"Change at the top is always unsettling and the abrupt nature of his departure will intensify reactions, particularly as it comes at such a sensitive time in the company's strategy," she said.

PAY ATTENTION: Join Legit.ng Telegram channel! Never miss important updates!

Looney took the top job in February 2020, shortly before the 10th anniversary of the explosion on the BP-leased Deepwater Horizon rig in the Gulf of Mexico that triggered the worst oil spill in US history.

The disaster killed 11 employees and cost the British firm tens of billions of dollars in damages and compensation.

Looney's arrival came also shortly before oil prices briefly turned negative as Covid lockdowns slashed energy demand and slammed the sector.

Finance chief Murray Auchincloss will now act as interim CEO while the group seeks a permanent successor.

Uncertainty

"Compared to the multi-billion-dollar fines following the Deepwater Horizon spill, briefly negative oil futures prices and dividend cuts during the pandemic, the resignation is a surprise but perhaps not a major chapter in BP history," said Interactive Investor analyst Richard Hunter.

Read also

Asian markets swing as crude spike stokes inflation concerns

"With a temporary replacement now confirmed, BP will be hoping for markets to regard the situation as business as usual," he said.

"There will, however, inevitably be uncertainty until such time as a permanent replacement is found and the company clarifies whether there will be any changes to its current strategy."

Looney had also come under fierce criticism from environmentalists, who have accused BP and rivals of not going far enough in transitioning away from fossil fuels.

He is not the first head of a major global company to resign or be ousted over relationships with employees.

Steve Easterbrook was ousted as CEO of McDonald's in 2019 for having a "consensual relationship" with an employee, in violation of company policy.

A year earlier, Brian Krzanich stepped down as chief executive of US computer chip giant Intel over a "past consensual relationship" with an employee in violation with the company's non-fraternization policy.

Source: AFP

Authors:
AFP avatar

AFP AFP text, photo, graphic, audio or video material shall not be published, broadcast, rewritten for broadcast or publication or redistributed directly or indirectly in any medium. AFP news material may not be stored in whole or in part in a computer or otherwise except for personal and non-commercial use. AFP will not be held liable for any delays, inaccuracies, errors or omissions in any AFP news material or in transmission or delivery of all or any part thereof or for any damages whatsoever. As a newswire service, AFP does not obtain releases from subjects, individuals, groups or entities contained in its photographs, videos, graphics or quoted in its texts. Further, no clearance is obtained from the owners of any trademarks or copyrighted materials whose marks and materials are included in AFP material. Therefore you will be solely responsible for obtaining any and all necessary releases from whatever individuals and/or entities necessary for any uses of AFP material.

Online view pixel