Former BP chief executive Bernard Looney was more aggressive than his industry peers when it came to embracing clean energy. Now the Kerryman has gone from BP. Following last week’s shock departure, might BP be tempted to row back on its plans to cut emissions?
Looney was criticised by environmental figures earlier this year after BP scaled back plans to cut emissions, but it remained the only major oil firm promising to cut hydrocarbon output by 2030.
However, investors didn’t reward Looney for his efforts. Since he announced in February 2020 BP’s ambition to be net zero by 2050, the company’s share price has lagged oil rivals such as Shell and TotalEnergies, while US giants Exxon Mobil, Chevron, and ConocoPhillips have all charged further ahead.
BP’s board had backed Looney. Indeed, just a week before his departure, he reiterated that “we’re holding our nerve on the transition” and that doing so would ultimately benefit both the world and shareholders.
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Still, BP might come under pressure to think again. Investors “remained unconvinced on the strategic shift”, said RBC Capital Markets last week. Edward Jones analyst Faisal Hersi said BP’s plans to move away from fossil fuels were “too ambitious”. Some strategic changes are possible, said Redburn analysts, adding that 2050 “is a long way away, after all”.
The ethics of such a move would be questionable, to say the least, but it would be naive to think it’s not being discussed in investor circles.
