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BP chief Dudley prepares to hand over the reins

by ace
British energy giant BP CEO Bob Dudley

BP Chief Executive Bob Dudley is preparing to step down after a decade-long term in which he guided the British oil giant back after the Gulf of Mexico disaster.

Sky News can exclusively reveal that Dudley is planning to retire within 12 months.

The American, who turned 64 earlier this month, would have detailed discussions with BP president Helge Lund about his retirement plans.

City sources said this weekend that an announcement about Dudley's decision to resign would be possible by the end of this year, and could be until the end of October, when BP is due to release third quarter results.

It is unclear on Saturday whether BP will announce Dudley's successor at the same time as his departure.

Bernard Looney, BP's chief executive – who incorporates the company's exploration, development and production activities – is widely regarded as the main candidate to replace Dudley.

Oil giant Brian Gilvary's chief financial officer is also highly regarded by investors, while Lund must also evaluate outside candidates since taking office last year.

Dudley is not under pressure to step down, meaning that a prolonged transfer to his successor is possible and could occur after he turns 65.

One source said it is still possible, though unlikely, that any announcements will be made by BP until 2020.

Dudley is the oldest head of all major oil companies in the world, including Royal Dutch Shell and Exxon Mobil Corporation.

Whatever the exact time of his retirement, the appointment of BP's next CEO will be a defining moment for one of Britain's most important companies.

Boardroom planning for the arrival of a new chief executive will come during a period of intense pressure on the world's largest oil companies to reduce their carbon emissions.

At BP's annual Aberdeen meeting in May, investors voted for further disclosure by the company of its plans to meet the climate change targets set at the Paris conference in 2015.

Dudley said this month that the company would sell some of its more carbon-intensive projects and reduce investments in others to improve its environmental footprint.

"We are sure we have a way – it may not be linear – to be consistent with the Paris objectives," he said at a conference hosted by investment bank JP Morgan.

"There will be projects we haven't done, things we could have done in the past – certain types of oil, for example, with a different carbon footprint."

BP, however, declined to set firm targets to reduce carbon emissions, igniting a growing international campaign against oil companies that attracted some of the world's largest institutional investors.

In February, BP said it would support a resolution proposed by investors participating in the Climate Action 100+ initiative to pave the way for clearer environmental reporting in their accounts.

He added that he would also evaluate greenhouse gas emission reductions in his bonus calculation for 36,000 employees worldwide.

Dudley's 10 years at the top of BP were initially dominated by the company's efforts to rebuild following the Deepwater Horizon explosion and oil spill that killed 11 workers and threatened the company's existence.

The American replaced Tony Hayward, whose often quoted comment that he wanted "my life back" provoked the anger of President Barack Obama.

The accident eventually cost BP approximately $ 65 billion in compensation payments and fines, although the company bitterly complained that some of the money it was forced to pay was fraudulently claimed by local businesses.

Dudley oversaw a radical process of rationalization to pay the bill, selling tens of billions of pounds in assets for what analysts and rivals found attractive prices.

For a time, BP seemed vulnerable to a takeover bid from Exxon-Mobil, its largest US rival, although a formal approach never materialized.

Since then, the company has recovered much of its lost value following the Gulf of Mexico crisis and, at Friday's closing price, had a market capitalization of just over £ 106 billion.

BP shares fell about 12% last year.

Dudley tried to reposition BP into growth-oriented projects and invested heavily in shale oil, buying BHP's unconventional US assets for $ 10.5 billion last year.

He has also established substantial partnerships in key markets such as India.

Prior to taking over as CEO of BP, he had a turbulent time managing the company's Russian joint venture, resulting in him being forced to hide in 2008 amid bitter dispute with his partners in the country.

BP eventually sold its stake in TNK-BP in a $ 55 billion deal in 2013, with the deal giving the company FTSE-100 billion in cash and a 12.5% ​​stake in state-owned giant Rosneft. from Russia.

A source who advised BP said it was important not to underestimate the extent to which BP's Russian crisis also threatened the company's future.

"Bob was also responsible for getting BP out of a mess there," the source said.

"When he goes, he will miss you."

Dudley's tenure was also hampered by a series of fights over his salary, particularly in 2016, when 59% of shareholders opposed his £ 14m pay package.

Since then, the opposition has been more muted, and a consultation on its upcoming three-year payment policy is unlikely to provoke renewed shareholder revolt.

BP said on Saturday it did not comment on speculation.


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