BP looks to charismatic oil man to lead response to climate crisis
It has been almost 10 years since BP was mired in the largest marine oil spill in history, following the explosion at the Deepwater Horizon rig in the Gulf of Mexico. In 2010 Bob Dudley was the man tasked with steering the group back from the brink of collapse as compensation payouts threatened to suffocate the business.
A decade on, Dudley’s successor will now have to navigate an environmental crisis on a global scale.
Bernard Looney becomes BP’s new chief executive next month at a time of mounting public pressure to prevent a climate breakdown by phasing out fossil fuels. His career success has been built on the millions of barrels of oil that BP produces every day, but his tenure at the helm will be defined by his response to the climate crisis.
The dapper, 49-year-old Irishman has been hailed as a charismatic moderniser of the oil industry for the millennial generation. This week he launched an Instagram account to encourage a “candid” conversation about the energy transition. Many believe this unconventional oil man may be BP’s best hope of surviving the global shift from fossil fuels. Sources within the company say Looney was the natural frontrunner in the race to take over from Dudley.
“It was no surprise to me whatsoever,” says one. “This is a business which needs to continue to deliver on its promises to shareholders, but must also evolve. The new leader will need to do both, and for many Bernard was the natural choice.”
So, how “green” is BP’s new chief executive? “It’s a legitimate question,” says Mark Lewis, head of sustainability at the asset management arm of French investment bank BNP Paribas. “The burden of truth will rest firmly on his shoulders.”
He adds: “In Europe’s financial centres the sense is that BP may be the European major with the most work to do in terms of improving their reputation and performance on climate change. I think Mr Looney will find that this is the first and most important question that he will need to give reassurance on.”
Looney is a BP “lifer”. He was marked as a rising star soon after joining as an engineering graduate from University College Dublin, and primed for senior leadership. A series of plum apprentice roles beside BP bosses followed, including stints working directly for John Browne and Tony Hayward.
When Dudley took the reins in 2010 he promoted Looney to BP’s senior management team. Looney later became the global boss of “upstream” oil and gas production, where he was in charge of reigniting the company’s fossil fuel growth.
Under his leadership BP produced 2.6 million barrels of oil and gas every day, and secured a series of multibillion-dollar investments that will pour millions more barrels into the global market in the years ahead.
Mark van Baal, from the Dutch shareholder activist group Follow This, warns that a career steeped in oil reserves may make it difficult for Looney to “imagine a future beyond oil and gas” or see renewables “as a business opportunity not a chore”.
However, Nick Boyle, the chief executive of BP’s solar joint venture Lightsource BP, says he has “absolutely no doubt” about BP’s commitment to developing renewable energy. Boyle teamed up with BP two years ago and has met Looney twice in recent months.
“He was genuinely interested and asking intelligent questions about challenges and what we thought the future would be for solar. We know from any of the energy projections available that solar is going to play an ever increasing part in the energy mix, and part of BP,” he says.
Still, the oil bosses who have led the most meaningful climate action have tended to be new arrivals to the industry. The Danish energy giant Orsted has traded oil rigs for offshore windfarms under the leadership of Henrik Poulsen, a former telecoms boss who was once an executive at Lego. Spain’s Repsol set out industry-leading plans to emerge as a carbon- neutral company by 2050, mapped by its chief executive, Josu Jon Imaz, after a career in politics and scientific academia.
Looney intends to be the exception. In an industry speech shortly before he was named as BP’s new boss, he told delegates: “We need to listen, hard, to society’s concerns. They are real concerns – the world is not on a sustainable path – and they are our concerns. Shouting louder about the good that we do is not a winning strategy. We need to demonstrate that we are part of the solution – that we get it.”
He is reportedly poised to unveil the biggest strategic overhaul of the company’s century-long history. According to Reuters, the plan is to broaden BP’s carbon targets beyond the emissions it produces within its operations to include the emissions from the product it sells to customers.
Environmental campaigners believe this would be a crucial step, an essential means of pushing oil companies into providing cleaner sources of energy.
“Maybe it’s the Irish thing,” Boyle adds. “But he instils a confidence and a positive, can-do mentality which is infectious. It’s a big company, but he’s always been well-known as a charismatic, lead-from-the-front, roll-your-sleeves-up type of guy. The big plus with Bernard is that he gets it.”
BP’s chances of surviving beyond its next environmental crisis will depend on that.
Activist investors say oil firms must:
Cut their own emissions
Oil companies can do a lot to reduce CO2 emitted during production – by, for example, cutting methane leaks from rigs and stopping “flaring” – the burning of “waste” gas from oilfields.
Take responsibility for the carbon footprint of the energy they sell
Outgoing boss Bob Dudley stated that BP “cannot control” how people choose to drive or heat their homes, but setting an emissions target for the energy they produce should help a shift towards clean sources.
Set a clear strategy for hitting the Paris climate goals
To achieve net zero emissions by 2050, oil companies also need to invest in measures such as tree planting and carbon capture.
Link executive pay to climate action
This would incentivise leaders and guard against “greenwash” promises.