BP shares fell on Wednesday after the previous night’s shock announcement that its chief executive had resigned having admitted to failing to fully detail relationships with colleagues.
Bernard Looney, who spent his entire career with the oil and gas multinational, departed the £88bn company with immediate effect, less than four years into his tenure.
BP informed investors on Tuesday night that Looney “did not provide details of all relationships and accepts he was obliged to make more complete disclosure”.
The company’s shares fell by as much as 2% during trading on the London Stock Exchange on Wednesday.
BP said in a statement that the board first received allegations “relating to Mr Looney’s conduct in respect of personal relationships with company colleagues” in May last year, after contact from an anonymous source.
The company and an external legal team reviewed the claims, prompting Looney to disclose “a small number of historical relationships with colleagues prior to becoming CEO”.
At the time, BP did not find any breach of the company’s code of conduct. However, it said its board “sought and was given assurances by Mr Looney regarding disclosure of past personal relationships, as well as his future behaviour”.
After receiving further allegations of a similar nature recently, BP said it and its external legal counsel began an investigation, which is ongoing.
BP said: “Mr Looney has today informed the company that he now accepts that he was not fully transparent in his previous disclosures.” It added that Looney did not provide details of all relationships and accepted he should have made more complete disclosure.
“The company has strong values and the board expects everyone at the company to behave in accordance with those values. All leaders in particular are expected to act as role models and to exercise good judgment in a way that earns the trust of others,” BP said.
Looney’s pay package more than doubled to £10m in 2022 – a move that was labelled a “kick in the teeth” for consumers battling the cost of living crisis.
His remuneration included a salary of £1.4m, a bonus of £2.4m – down fractionally on 2021 – and a £6m share award, as well as benefits. This meant that the total package was 120% more than the £4.5m he received in 2021.
BP said “no decisions have yet been made in respect of any remuneration payments to be made to Mr Looney”.
The company added that any decisions, including any payments made to Looney for his resignation, would be disclosed when its annual accounts and reports were published.
Murray Auchincloss, the company’s chief financial officer, will run the business on an interim basis while BP seeks a replacement.
Looney was raised on a dairy farm in Ireland and joined BP in 1991 aged 21, shortly after studying electrical engineering in Dublin. The 53-year-old would go on to hold roles in BP’s operations in the North Sea, Vietnam and Mexico, and took on its upstream division in 2016.
He took the top job at the company in 2020, and quickly set out an ambition for BP to “become a net zero company by 2050 or sooner”. Looney pledged to build up the company’s operations in low-carbon pursuits, including renewable energy and electric vehicle charging.
However, he came under pressure from investors who wanted BP to focus on its oil and gas business, and green campaigners urging the company to move more quickly away from fossil fuels.
Earlier this year, Looney faced criticism from environmental groups after scaling back its climate ambitions at the same time as announcing that annual profits more than doubled to $28bn (£23bn) in 2022 after a sharp increase in gas prices linked to the Ukraine war boosted its earnings.
Looney’s departure, first reported by the Financial Times, marks a changing of the guard at Britain’s two largest energy companies. Wael Sawan took over at BP’s rival Shell in January.
Looney “announced some bold intentions on taking over as CEO, with a pivot away from hydrocarbons and towards renewables”, said Biraj Borkhataria, an associate director of European research at RBC Europe. “The world has clearly changed since Bernard took over as CEO.
“With Murray at the helm, we wonder if we could see a step back … to the future, with more focus on value and value growth in the core business.”