The chief executive of oil giant BP has resigned with immediate effect after admitting that he failed to fully disclose past personal relationships with colleagues.
Bernard Looney, who has spent his entire career with BP, was not "fully transparent" when questioned last year about his conduct. BP's board of directors launched a review after receiving information from an anonymous source in May 2022.
During that review, Mr Looney disclosed a "small number of historical relationships" with colleagues prior to becoming chief executive in 2020. No breach of BP's code of conduct was found, but the board was given assurances by Mr Looney regarding disclosure of past personal relationships and his future behaviour.
On Tuesday night, the company informed investors in a shock announcement that Mr Looney had failed to divulge all relevant details.
READ MORE: BP: Will Looney's departure derail climate ambitions?
"Further allegations of a similar nature were received recently, and the company immediately began investigating with the support of external legal counsel," BP said. "That process is ongoing.
"Mr Looney has today informed the company that he now accepts that he was not fully transparent in his previous disclosures. He did not provide details of all relationships and accepts he was obligated to make more complete disclosure."
BP added: “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 judgement in a way that earns the trust of others.”
BP's chief financial officer, Murray Auchincloss, will take over as chief executive on an interim basis. BP said no decisions have yet been made in respect of any remuneration payments to be made to Mr Looney, who faced a public backlash in March when it was revealed that he received nearly £10 million in salary and share awards as the company's profits ballooned amid the energy crisis.
His departure comes at a tricky time for BP, which scaled back on its climate ambitions while at the same time announcing that profits in 2022 more than doubled to £23 billion.
Analysts said the departure of the chief executive midway through BP's transformation programme into a greener operation is not ideal.
“BP is now in a position where a permanent replacement needs to be found," said Sophie Lund-Yates of Hargreaves Lansdown. "A clear path forward needs to be forged sooner rather than later to limit negative sentiment.
READ MORE: BP profits targeted by Labour despite missing expectations
"This of course all lands at a time when oil majors are already grappling to boost their ESG credentials, which adds weight to the problem. Looney has spearheaded an aggressive and green-thinking strategy during his tenure, and replacing him with someone that can convince the market they’re up for carrying the mantle and sprinting with it, isn’t going to be an overnight task."
She added that the recent oil price spike provides only limited support for BP’s share price, with longer-term forecasters far more concerned about how well-prepared BP is for the energy transition.
Edward Moya, a senior market analyst at OANDA, said the unexpected resignation could raise doubts about BP's transition towards renewable energy.
"BP share prices might not get rocked that hard as CFO Auchincloss appears poised to take over,” he added. “Whoever becomes the permanent CEO will have a greater impact on what happens to BP's stock."
READ MORE: BP sees North Sea opportunities after posting $2.6bn profit
Last month BP reported a big drop in profits during the second quarter of this year after energy prices fell from the highs seen following Russia’s invasion of Ukraine. Net profits came in at £2bn for the three months to the end of June, down from £4bn in the preceding three months and £6.5bn in the second quarter of last year.
Despite being more than two-thirds lower than last year, the results reignited criticism of the profits made by oil and gas companies since the onset of the energy crisis. BP’s North Sea business paid £755m in UK taxes in the first half of this year, with £358m of that linked to the energy profit windfall levy.
Shares in BP closed yesterday’s trading in London 14.6p lower at 508.2p, a decline of 2.8%.
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