BP. Bp Plc

By Adria Calatayud 

BP PLC Chief Executive Bob Dudley will retire next year, after nearly a decade steering the energy giant through the aftermath of the Deepwater Horizon crisis.

Mr. Dudley will step down in February and be succeeded by Bernard Looney, the chief executive of BP's upstream operations. Mr. Looney will take over the CEO role and join the BP board on Feb. 5, the company said Friday.

BP appointed Mr. Dudley as CEO about six months after the 2010 Deepwater Horizon disaster, which killed 11 people in the U.S.'s largest oil spill. The American-born leader replaced Tony Hayward, who had received criticism for what some observers saw as insensitivity toward the oil-spill crisis. Mr. Hayward said he wanted his life back in the midst of the ordeal.

Before Mr. Dudley took over, some feared BP could be destined for bankruptcy. The company's value declined by more than half in the months following the accident. The spill resulted in a $20 billion settlement with the U.S. government, which requires the company to make payments through to 2032.

Mr. Dudley's time as BP's chief was marked by crises that forced the company to adapt and evolve. He took the reins as CEO from Mr. Hayward taking responsibility for the Gulf of Mexico oil-spill containment and cleanup operation. A few years later, he navigated the company through a collapse in oil prices, which forced the entire industry to cut costs and adjust to a world of cheaper crude.

Through the combined efforts of Mr. Dudley and Mr. Looney, BP is able to maintain profitability during times of lower oil prices. The company's cash breakeven -- the oil price needed to make a profit after dividends and capital expenditure -- is around $50 a barrel of oil, below the industry's $55-$60 a barrel level, according to JPMorgan.

"During his tenure he has led the recovery from the Deepwater Horizon accident, rebuilt BP as a stronger, safer company and helped it re-earn its position as one of the leaders of the energy sector," said BP Chairman Helge Lund.

Under Mr. Dudley the company embarked on a massive divestment plan and is on track to have sold $75 billion of assets by 2020. The company has returned to making acquisitions, most recently buying BHP Billiton Ltd.'s onshore U.S. oil and gas assets for nearly $11 billion.

Mr. Dudley also oversaw BP's focus on low-carbon energy in recent years.

Before becoming chief executive, Mr. Dudley ran BP's joint venture with a group of Russian billionaires, TNK-BP. He will formally step down as CEO in February and retire in March.

His replacement, Mr. Looney, joined BP in 1991 as a drilling engineer and was appointed head of upstream in 2016. Mr. Looney has run BP's upstream business since April 2016 and has been a member of the group's executive management team since 2010, the company said.

Mr. Looney pushed for modernization in BP's upstream business, which handles oil and gas discovery and extraction operations, said Barclays PLC analyst Lydia Rainforth in a note to investors. His focus on innovation could help BP in its efforts to be seen as a cleaner, lower carbon company, she said.

"Given the drive for digital solutions and the work on reducing carbon emissions, it is likely that the appointment of Mr. Looney as CEO may accelerate the journey that BP is on regarding the energy transition," Ms. Rainforth added.

(END) Dow Jones Newswires

October 04, 2019 06:24 ET (10:24 GMT)

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