BP has appointed Murray Auchincloss as their new CEO four months after Bernard Looney left his position following the discovery of undisclosed relationships with staff.
The new CEO comes in at a time when BP is under increased pressure to push forward with its green agenda and a generally difficult time for the FTSE 100 company.
Auchincloss will have to contend with subdued oil prices and a poor valuation compared to US peers.
“The decision to appoint Murray Auchincloss as chief executive of BP on a permanent basis was greeted with the shrug it deserved by the market,” said Russ Mould, investment director at AJ Bell.
“There will be some disappointment about the failure to appoint an external candidate for the first time in its history to shake things up and revive a business which has trailed behind its US counterparts in recent years.
“Mr Auchincloss is a continuity candidate, in that he was on the board as CFO under Bernard Looney when the oil major drew up its plan to retreat more rapidly from hydrocarbons than its industry peers, and that he was appointed interim CEO when Mr Looney was sacked. As such, the board must be happy with this strategy, even if it was subsequently refined and the pace of the switch toward renewables and away from oil and gas was slowed down, and the idea is presumably that Mr Auchincloss can continue to implement it.”
Mould continued to explain that the new CEO has a job on their hands to impress investors after a period of relative underperformance versus peers.
“Investors have, thus far, been less pleased than the board, given how BP’s shares underperformed those of Shell as well as its American and European peers during Mr Looney’s tenure. Nevertheless, they may welcome some degree of calm in the company’s boardroom, given that three of its past four CEOs did not depart at a time of their choosing.
“Mr Auchincloss will still be expected to put his own stamp on the business and will get his first opportunity to introduce himself to the market properly with the company’s full year and fourth quarter results on 6 February.”
