Bernard Looney has built a nearly flawless career at BP over the past 32 years. This week, it unraveled in a matter of days.
The Irish chief executive resigned on Tuesday night with immediate effect, shortly after the Financial Times reported that he was leaving the company for failing to disclose past relationships with colleagues.
His sudden departure leaves BP without a key architect of its energy transition strategy. The FTSE 100 company now also faces questions about the extent and precise nature of Looney’s ties and whether his behavior reflects wider cultural issues within the 113-year-old energy giant.
“Why isn’t there clearer information that you won’t jeopardize the well-being of the company with something like this?” one major shareholder asked.
BP declined to disclose the nature and number of Looney’s romantic relationships with co-workers. An internal investigation is ongoing and the company has not said whether the results will be made public.
Looney, 53, officially resigned after misleading the board. In May 2022, the company received an anonymous complaint about his past relationship. Looney discussed the complaint at length with the board and then said he had nothing further to disclose, but the company received a slew of new allegations as recently as last week.
From that point on, Looney’s tenure at BP quickly unraveled. As of Tuesday, Looney had decided to resign, but BP’s board and its external crisis communications team wanted a few more days to get the message across, according to people familiar with the matter. Few within the company were aware of the rapidly evolving situation.
While his departure shocked the business community, to some investors and BP employees, the reasons for his departure were no surprise.
Current and former BP employees, particularly at the company’s London headquarters near Buckingham Palace, said Looney’s romantic history with colleagues had been quietly discussed among employees for years.
Rooney joined BP in 1991 at the age of 21 and was married from 2017 to 2019.
A former senior executive who left BP several years ago after a long career knew Looney but rarely worked with him directly. He said he remembered at least four relationships between Looney and other BP employees. While some of the women held lower positions in the company than Looney, the senior executive said he was unaware of any relationships between Looney and the women under his direct supervision.
As is common with senior executive appointments, BP’s board discussed some of Looney’s past relationships during the CEO selection process. It concluded there was nothing inappropriate, no signs of abuse of power and that the personal history would not hamper his ability to hold the top job, people familiar with the matter said.
Others are less convinced that his romantic life won’t cause problems in the future. “We always knew it was going to come back to bite him,” said one person who has worked with Rooney. “It’s a matter of time.”
Industry executives and investors have questioned whether the board conducted an appropriate level of due diligence in appointing Looney as CEO.
BP declined to comment beyond Tuesday’s statement. Looney did not immediately respond to a request for comment.
Pressure has mounted on Looney since the first internal investigation in May 2022, but the findings were not publicly disclosed at the time.
Looney has spearheaded the industry’s most ambitious transformation strategy, pledging to move away from oil and gas while ramping up spending on so-called “transformational growth engines” such as electric vehicle charging and biofuels. But many investors remain unconvinced. BP’s shares have lagged rivals since taking over in February 2020.
A recent internal company survey even revealed that many employees struggle to understand the strategy. In response, BP began this year working to refine and better explain its plans.
BP Chairman Helge Lund tried to stabilize the situation this week, assuring investors in a series of emergency meetings that BP’s strategy and operations would not be affected.
Shareholders, however, have speculated whether BP will continue its commitment to transformation with Looney at the helm.
“It would be interesting if management changed the way capital is allocated between energy transition and conventional energy,” one major shareholder said.
That may depend on who is appointed to replace Looney. Lund has ruled himself out as the next CEO and said internal and external searches have begun. In addition to BP executives, analysts consider Maarten Wetselaar, who missed out on the chance to become Shell’s chief executive last year, as a potential option.
Looney has made mistakes before. He became the target of British tabloid wrath in late 2021 when he described BP as a “cash machine” at a time when many households were struggling with soaring energy bills.
The Sun, Britain’s biggest-selling newspaper, ran a front-page story about his downfall this week with the headline “The cost of a love crisis.”
Despite the whirlwind of resignations, BP staff said the atmosphere at the company’s St James’s Square headquarters this week was “unexpectedly calm”, noting that many staff had already experienced the sudden sacking of a chief executive on at least two previous occasions .
Lord John Browne resigned as chief executive of BP in 2007 after lying to a court about how he met his partners. His successor, Tony Hayward, left the company in 2010 after a drilling rig exploded in the Gulf of Mexico, killing 11 people and causing the largest oil spill ever in U.S. waters.
Hayward went on to work on oil drilling in Iraqi Kurdistan and as chairman of Glencore, while Lord Brown eventually gained sympathy for his homosexuality and held a number of senior business and government posts.
It’s unclear what will happen to Looney. In 2022, Looney, who has no children, said in an interview with the Financial Times that BP is his life. “I didn’t do much else,” he said.
In the short term, he may find himself at loggerheads with his former employer over millions of pounds in severance packages and kickbacks. After leading BP to a record profit of $28 billion last year, Looney’s pay doubled to 10 million pounds, including 6 million pounds in long-term stock awards.
In announcing Looney’s resignation, BP said no decision had been made “on any compensation to Mr. Looney.”
One of the many dirty jokes circulating in the oil industry this week is that this could be BP’s biggest cleanup since the Gulf of Mexico oil spill.
Looney hired the London-based law firm Mishcon de Reya, which has a Rottweiler-like reputation for defending clients’ interests, according to two people familiar with the matter.
Meanwhile, shareholders and current and former BP employees have been asking what exactly happened: The company’s statement failed to address many questions, such as whether Looney’s behavior or the relationships he hid from the board were considered appropriate for the position. people.
BP did not disclose whether those relationships occurred while Looney was in the top job.
“The problem with any company is that it looks terrible,” said one senior oil industry analyst. “To the public, it may appear that the companies involved simply don’t care.”
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