BP delays key strategy update after CEO medical procedure

Article content
BP PLC delayed a highly anticipated presentation to allow chief executive Murray Auchincloss more time to recuperate from medical treatment.
Article content
The CEO, who is 54, was already in a difficult position as he prepared to give the crucial strategy update. Investors are looking for change after the London-based company fell far behind its fellow oil majors following a bold pivot toward clean energy during the 2020 pandemic.
Article content
The architect of that shift, former chief executive Bernard Looney, was dismissed in 2023 over his personal conduct, thrusting Auchincloss unexpectedly into the top job. The expectation is that BP will announce in February a further shift back toward oil and gas, yet there are questions about whether the company can accomplish this and maintain share buybacks at the current pace.
BP’s strategy update will now happen on Feb. 26, about two weeks later than planned, and the location was changed from New York to London. Shares fell as much as 3.1 per cent in London trading.
“Murray Auchincloss has recently undergone a planned medical procedure from which he is recovering well,” according to a statement from the company on Tuesday. “He will be back in the office by February.”
In a statement on Tuesday, BP also flagged broad weakness across its business in the fourth quarter, the latest indication of a tough end to 2024 for the world’s largest energy companies. Last week, Shell PLC said its natural gas divisions saw lower sales volumes and trading earnings, while Exxon Mobil Corp. said its profit took a US$700 million hit from lower crude prices and narrowing refining margins.
Article content
BP said upstream oil and gas production in the fourth quarter was lower than the prior period. It saw seasonally lower sales volumes and profit margins in its road fuel business and “the oil trading result is expected to be weak.”
The update from BP suggests fourth-quarter earnings will be weaker than the current consensus, analysts from Jefferies said in a note.
BP’s financial framework looks stretched and the balance sheet “needs work,” RBC Capital Markets analyst Biraj Borkhataria said in a note. BP in October raised the possibility that its share buybacks will slow this year from the US$1.75 billion quarterly pace seen in 2024.
In the final months of 2024, unexpected weakness in what is typically one of the strongest seasons for oil consumption forced big players in the market to adjust, with the Organization of Petroleum Exporting Countries and its allies delaying the planned restart of some idle production.
Recommended from Editorial
-
Brace for bigger discount on Canadian oil and potential Alberta deficit
-
Oilpatch industry associations band together to fight U.S. tariffs
-
Danielle Smith warns Trump’s tariffs are coming and will include oil
However, Brent crude futures have jumped so far this year, especially after the United States imposed its most sweeping and aggressive sanctions yet on Russia’s oil industry on Friday.
Bloomberg.com
Share this article in your social network
link