British oil and gasoline company BP (British Petroleum) signage is being pictured in Warsaw, Poland, on July 29, 2024.
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British oil major BP on Friday said its chair Helge Lund will soon step down, kickstarting a succession process shortly after the company launched a fundamental strategic reset.
“Having fundamentally reset our strategy, bp’s focus now is on delivering the strategy at pace, improving performance and growing shareholder value,” Lund said in a statement.
“Now is the right time to start the process to find my successor and enable an orderly and seamless handover,” he added.
Lund is expected to step down in 2026. BP said the succession process will be led by Amanda Blanc in her capacity as senior independent director.
Shares of BP traded 2.2% lower on Friday morning. The London-listed firm has lagged its industry rivals in recent years.
BP announced in February that it plans to ramp up annual oil and gas investment to $10 billion through 2027 and slash spending on renewables as part of its new strategic direction.
Analysts have broadly welcomed BP’s renewed focus on hydrocarbons, although the beleaguered energy giant remains under significant pressure from activist investors.
U.S. hedge fund Elliott Management has built a stake of around 5% to become one of BP’s largest shareholders, according to Reuters.
Activist investor Follow This, meanwhile, recently pushed for investors to vote against Lund’s reappointment as chair at BP’s April 17 shareholder meeting in protest over the firm’s recent strategy U-turn.
Lund had previously backed BP’s 2020 strategy, when Bernard Looney was CEO, to boost investment in renewables and cut production of oil and gas by 40% by 2030.
BP CEO Murray Auchincloss, who took the helm on a permanent basis in January last year, is under significant pressure to reassure investors that the company is on the right track to improve its financial performance.
‘A more clearly defined break’
“Elliott continues to press BP for a sharper, more clearly defined break with the strategy to pivot more quickly toward renewables, that was outlined by Bernard Looney when he was CEO,” Russ Mould, AJ Bell’s investment director, told CNBC via email on Friday.
“Mr Lund was chair then and so he is firmly associated with that plan, which current boss Murray Auchincloss is refining,” he added.
Mould said activist campaigns tend to have “fairly classic thrusts,” such as a change in management or governance, higher shareholder distributions, an overhaul of corporate structure and operational improvements.
“In BP’s case, we now have a shift in capital allocation and a change in management, so it will be interesting to see if this appeases Elliott, though it would be no surprise if it feels more can and should be done,” Mould said.