A key architect of BP’s failed pivot towards renewables was ousted yesterday as profits halved.
With notorious activist investor Elliott demanding change, the FTSE 100 energy giant said green energy chief Giulia Chierchia will step down.
Chairman Helge Lund has said he will quit next year in another coup for the US hedge fund – although the Norwegian executive is under pressure to leave sooner.
Shares in BP slid 2.4 per cent yesterday as it unveiled a dismal set of first-quarter results that saw profits tumble 49 per cent from £2.01billion to £1.03billion – below market expectations of £1.1billion.
Under pressure from Elliott, boss Murray Auchincloss in February scrapped BP’s pivot to renewables, which had been pushed by strategy and sustainability chief Chierchia.
She was hired by former chief executive Bernard Looney – who was sacked in 2023 over relationships with colleagues – to drive his green agenda.
Ousted: BP said green energy chief Giulia Chierchia (pictured) – was hired by former chief executive Bernard Looney – will step down
Yesterday BP confirmed that she will leave at the start of June and will not be replaced. A spokesman for the company said Chierchia was ‘leaving BP to pursue other opportunities’.
The sustainability team will be moved to other parts of the business, which BP said would lead to ‘quicker decision making and clearer accountabilities’.
In a ‘fundamental reset’ earlier this year, Auchincloss refocused on oil and gas in an attempt to close the valuation gap with arch-rival Shell and US competitors Exxon Mobil and Chevron.
But Elliott, a feared activist investor that aggressively pushes for change at the companies it invests in, was not appeased.
It has upped its stake in the company to more than 5 per cent – placing it between top shareholders BlackRock and Vanguard – and called for heads to roll at the top.
Auchincloss’ new strategy could be derailed by a turbulent oil market which has been rocked by the return of Donald Trump to the White House and his subsequent tariff threats.
BP’s plan is based on an oil price of around $70 a barrel. It was trading at $64 a barrel yesterday. Auchincloss said: ‘We continue to monitor market volatility and changes and remain focused on moving at pace.’
And in a further blow, BP reported lower cash flow, a near-£3billion increase in net debt to £20.1billion and a reduced share buyback programme.
However, Auchincloss insisted that his turnaround plan had made ‘significant progress’ in the first three months of the year.
‘I’m confident that our plans to strengthen the balance sheet, reduce costs and improve cash flow and returns will grow long-term shareholder value and strengthen the resilience of BP,’ he said.
The company pointed to the recent discovery of six exploration sites including a ‘significant’ finding of oil in Namibia as evidence of its commitment to the strategy.
Some £1.1billion worth of divestments have been completed during the quarter from a target of £15billion by the end of 2027, it said.
‘Management doesn’t appear to be going far enough and fast enough for the activist’s liking while other institutions have reservations about the shift in direction and how it has been handled,’ said Russ Mould, investment director at AJ Bell. ‘Some investors have just been underwhelmed.’
David Morrison, a senior market analyst at broker Trade Nation, said: ‘The company blamed the weak oil price, although it is well known that BP has lagged behind the rest in its sector due to a succession of poor management decisions.’
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