In one sense it’s a baptism of fire – in another, hardly at all. Meg O’Neill’s arrival as the first female chief executive of BP comes, in a sense, at an auspicious moment.
Oil majors’ earnings are set for a significant windfall from the conflict in Iran, with those of BP and Shell forecast to see a combined £5bn this year – and that’s if the war is limited in timeframe.
That cannot mask, though, the scale of the task facing O’Neill, who arrives from Australia’s Woodside Petroleum with a formidable reputation for rapid, hard-nosed corporate decision-making.
“Right now, we’re operating in an environment of significant complexity: geopolitical tension, conflict, rapid technological change and shifting global energy demand,” she told colleagues yesterday.
“There’s always more to do and I believe we can safely accelerate performance and drive innovation, sustainability and growth.”
BP needs it now more than ever. Its target for reducing net debt to $14bn-$18bn by the end of 2027, partly driven by asset sales, may be within reach a year early, but that will do little to address the more fundamental questions being posed by the company’s shareholders: how to shape a strategy which returns it to long-term sustainable growth.
O’Neill’s predecessor, Murray Auchincloss, was resistant to big strategic decisions that would shift BP away from the diversified energy group it had become and back towards its roots as a more focused – but smaller – oil and gas exploration and production company.
His new chairman, the former CRH boss Albert Manifold, had no truck with that resistance, repeatedly telling investors that he wanted to drive radical change at BP to improve its performance.
“That’s how we make bp simpler, stronger and more valuable,” O’Neill wrote. “I’m committed to providing clear direction and consistency so we can move forward together with confidence.”
The Iran war has put the wind in BP’s sails, with its shares up by nearly half since her appointment was announced. Investors will want rapid evidence of O’Neill’s strategic vision, though, to be convinced that her arrival isn’t yet another false dawn.
By Mark Kleinman for CityAM
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