City analysts shrugged off the premature departure of BP chief executive Bernard Looney overnight, saying the business has management depth to cope and is in good shape operationally.
Murray Auchincloss, the finance head, will take over as chief executive on an interim basis and that is a good thing, according to UBS.
Auchincloss, who has been in his role since 2020, has been an integral part of the elaboration of the strategy, providing continuity, said the Swiss bank.
Looney took over 3 years ago in July 2020 and while he made a mixed start, according to UBS, he steered the company through challenging times for the industry and set the course for BP to become an Integrated Energy Company.
A recent strategy update in February 2023 addressed key investor concerns, in UBS’s view, and put the company on a more robust and balanced energy transition path.
“He leaves the company in a strong financial position and with a clear strategic direction.
“We see Auchincloss and Chairman Helge Lund as likely leading internal candidates for the role.”
Berenberg adds that Looney went the furthest of the major European chief executives in prioritising energy transition, becoming the first major oil company to commit to reducing oil and gas activity and to target net-zero CO2 emissions, including Scope 3, by 2050.
While the company has recently slightly toned down its nearer-term targets for reducing oil activities, it remains committed to a material shift into low-carbon businesses.
“It is uncertain whether the next leadership team will stick with the existing plans or change tack, and until there is greater clarity on the management team and strategy, this uncertainty could weigh on the stock.”
RBC Brewin Dolphin, added: “BP is going through a business transformation programme that recognises the significant changes in the energy market.
“While the departure of the CEO midway through this process isn’t ideal, there is depth in the management team to cope until a suitable replacement can be found.”
Berenberg has a share price target of 490p and UBS 600p.
BP shares were down 1% at 518p