On Monday, BP announced Albert Manifold, former head of building materials producer CRH, as its new chairman.
This appointment comes as the company navigates a significant strategic shift aimed at improving its struggling share performance.
Bernard Looney’s unexpected departure from BP has paved the way for Murray Auchincloss to step in as interim CEO.
However, the more significant leadership change involves the appointment of Manifold, who is slated to succeed Helge Lund as chairman from October.
This decision comes amidst a period of considerable upheaval for BP, as it grapples with intense takeover and break-up speculation.
Manifold’s appointment is particularly noteworthy given his lack of prior senior experience within the energy sector.
Potential shift
The move signals a potential shift in BP’s strategic direction, especially as the company has recently announced significant cuts to its planned renewables spending.
This pivot away from aggressive investment in renewable energy, coupled with the change in leadership, suggests BP may be prioritising traditional fossil fuel operations in the short to medium term.
Over Manifold’s 11-year tenure at CRH, the Irish company’s shares surged almost fivefold.
This growth coincided with a significant portfolio realignment and the company’s primary listing relocation to New York in 2023.
“Manifold’s experience should serve him and BP well as they are embarking on a similar journey,” Allen Good, an analyst with Morningstar was quoted in a Reuters report.
Good said:
The question with BP is what the destination is and whether investors are willing to wait.
Good further added that Manifold may need to pressure current management to implement additional cost reductions.
Amanda Blanc, BP’s senior independent director, headed the succession search and stated that Manifold’s “ideal candidacy” to lead BP into its next chapter was a result of his proven track record.
Lund, 62, a Norwegian national who had served as BP’s chair since 2019, lost investor confidence after supporting former CEO Bernard Looney’s unsuccessful venture into renewables.
Shares rise
On Monday, BP’s shares increased by 0.6% to 402 pence in early trading. Since 2019, when Lund assumed the chairman role, their value has dropped by nearly 30%, significantly lagging behind competitors.
Amid strong criticism from activist investor Elliott and climate-focused shareholders, which significantly impacted support for his re-election in April, Lund was anticipated to depart from BP in 2026.
“While sustained delivery remains key, we expect the appointment and a faster succession to be quietly welcomed,” JPMorgan analysts said in a note.
The analysts said Manifold, despite lacking prior experience in the oil and gas sector, was highly regarded during his time at CRH.
Activist investor Elliott had acquired a stake exceeding 5% in BP, advocating for reduced expenditures, divestitures, and a renewed focus on the company’s core oil and gas operations.
Earlier this year, BP’s CEO, Murray Auchincloss, who was appointed in January 2024, revealed plans to overhaul the energy giant.
According to reports, Sam Laidlaw, former chief executive of Centrica, owner of British Gas, and Ken MacKenzie, former chair of mining group BHP, were also approached as potential successors to Lund.
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