Is BP Reshaping Its Energy Transition Business Priorities?

Following his predecessor Bernard Looney’s sudden departure last year, BP CEO Murray Auchincloss’ was left carrying the can for the company’s strategy calling for growing renewables and reducing oil and gas output by 2030 or “Reimagine BP.”

The plan – to make the energy giant net zero by 2050 – failed to impress both shareholders at a time of extreme energy market volatility as well as environmental groups who accused Looney of watering down pledges he initially publicly backed.

After a prolonged selection period for a new boss, when BP finally elevated Auchincloss from interim to permanent CEO, many billed him as the continuity candidate.

But in attempt to get shareholders onside and regain the initiative, it appears the new boss is rethinking or at the very least reshaping the company’s energy transition businesses, with a dose of cost-cutting thrown in the mix.

On April 18, BP announced the departure of its head of low carbon and natural gas Anja-Isabel Dotzenrath, who will leave the company after little over two years in the role. The company’s head of innovation and technology Leigh-Ann Russell would also be departing, it added.

BP would also be reducing the size of its executive leadership team to 10 members from 11. Veteran William Lin, who previously led the regions, corporates and solutions unit, will head the gas and low carbon energy business, while Auchincloss’ current chief of staff Emeka Emembolu will head the technology role.

The leadership shake-up followed a report by newswire Reuters that BP had cut over 10% of the workforce in its electric vehicle (EV) charging business BP Pulse. The report also claimed the energy major had pulled out of several charging markets after a bet on rapid growth in commercial EV fleets did not pay off.

BP did not confirm the number of employees who have been let go, but told Reuters it had whittled down the number of countries it focuses on from 12 to just four – China, Germany, U.K. and U.S.

However, company said its ambitions in the EV charging space had not changed, and that it still sees BP Pulse as a key part of its business. And following the shake-up, the energy major will continue to comprise of three business units: production and operations, gas and low carbon energy, and customers and products.

Additionally, BP’s operations will be supported by its five key functions which include finance, technology, strategy, sustainability and ventures, people and culture, and legal.

Following an interesting week and a half, BP’s shares ended trading in London on Friday (Apr 26, 2024) down 0.29% or 1.5p to 524p ($6.55), but up 1.69% on the week and 6.49% on the month.

Is this quite the pivot back to oil and gas, as rival Shell appears to be doing? Perhaps not. But maybe the energy major’s new boss has begun to figure out how he intends to unlock value from traditional energy while at the same time invest pragmatically in green energy and cleantech plays.