O’Neill will replace Murray Auchincloss, after less than two years in the role.
Auchincloss will step down today, with Carol Howle, BP’s executive vice president for supply, trading and shipping set to serve as interim CEO until O’Neill takes over the role on April 1. She will be BP’s fourth CEO in six years.
Stephen Isaacs, strategic advisor at Alvine Capital, which holds a position in BP, told CNBC’s “Squawk Box Europe” on Thursday that while BP has been “a very poor performer for a long, long time,” this move could be “the last piece of the jigsaw” in getting its house in order.
“It rather kind of drank a bit too much Kool Aid on the whole energy transition and neglected its core businesses … So I think [the replacement of the CEO is] a kind of confirmation that we’re going to get back to basics. And I think that’s pretty good for the stock,” Isaacs said.
BP’s share price ended the previous session up 0.7% following the news. It initially extended gains into Thursday before moving into negative territory. Shares were last seen 0.1% lower.
Auchincloss stepped up from his previous role as chief financial officer to the top job in January 2024, after his predecessor Bernard Looney left the company for failing to disclose a relationship with a colleague.
Looney, who had been in the role since early 2020 when he succeeded Bob Dudley, had sought to transform the oil major into a green energy giant but came under investor pressure amid share underperformance.
Auchincloss reversed that strategy, and focused on the company’s core gas and oil units.
In the Wednesday statement, Auchincloss said he’d told recently appointed Chair Albert Manifold he was open to stepping down if an “appropriate leader” was identified.
BP fielded off takeover rumors earlier this year, with fellow U.K. energy incumbent Shell
The London-listed oil exploration company that was founded in 1909 under the name Anglo-Persian Oil Company, has underperformed compared with its peers, having reported declining annual profits in both 2023 and 2024.
However, BP’s fundamental strategic reset that saw it U-turn on green pledges, shake-up its leadership, launch a cost-cutting program and a string of oil discoveries, helped ease pressure.
BP’s share price is up over 15% year-to-date and 21% over the past five years. The stock ended Wednesday up 0.7% as investors responded to the leadership announcement.
Holding the line
O’Neill will likely hold the line, drawing on more than two-and-a-half decades of experience in the oil and gas industry, including 23 yeas at U.S. giant ExxonMobil
Maurizio Carulli, global energy analyst at Quilter Cheviot, told CNBC that the move “signals a clear pivot back to upstream oil and gas.”
“Her track record, including Woodside’s acquisition of BHP’s oil division, suggests a sharper focus on [liquified natural gas] and international growth,” he said.
Speaking to CNBC’s Dan Murphy at the Future Investment Initiative Institute in Saudi Arabia in October about Woodside Energy’s strategy, O’Neill said that the firm’s investments are made by looking at the demand profile “for decades to come” — which led it to LNG.
Oil majors, including BP, have pushed hard into LNG production, which is considered a bridge fuel by the likes of the European Commission, given it is cleaner than coal.
“We’ve got deep conviction around the role of LNG as in many ways, finding the sweet spot between reliability, affordability and sustainability. When we talk to customers in places like North Asia and Europe and ask them what they want, they say ‘we want all three factors’,” she said.
When customers are asked whether they are willing to pay for more climate-friendly products, “the answer is often zero or near zero,” she added. “So that has underpinned our focus on LNG.”
At the time, Woodside expected LNG demand to grow 50% over the coming decade.
Woodside Energy’s stock price closed Wednesday’s session 1.3% lower.
Steering the ship
Isaacs tips “natural energy” stocks to rebound from recent damp investor sentiment. “They’re relatively cheap compared to the rest of the market, and they go with my general thesis of rotation — rotation out of tech into value,” he said.
For now, however, there could be some uncertainty according to Carulli.
“The move underlines new Chair Albert Manifold’s hands-on approach and likely accelerates BP’s strategy reset. While takeover chatter will inevitably resurface, with Shell’s bid for BG after a leadership change remaining fresh in memory, the odds of a major deal feel lower than earlier this year,” he said.
“In the short term, expect some uncertainty, but with Carol Howle stepping in as interim CEO, BP has a safe pair of hands to steer the ship until April.”
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