BP finance chief to retire amid further reshuffle at oil major

BP’s chief financial officer Brian Gilvary will retire from the oil and gas major in June, despite saying he would be “sticking around” as the group begins life under a new chief executive next month.

Bob Dudley announced last year he would be stepping down after a decade at the helm.

Mr Gilvary, 58, was a contender for the chief executive role before the appointment of Bernard Looney, currently head of BP’s exploration and production business, was announced in October.

Murray Auchincloss, 49, who as chief financial officer of BP’s upstream business has worked closely with Mr Looney, will take over from Mr Gilvary in June — marking a new generation of BP employees at the top of the company.

My Gilvary, who became CFO in 2012, helped to steer the company to recovery after the Deepwater Horizon disaster, which triggered a series of asset sales to pay for more than $60bn in legal and clean-up costs.

Mr Gilvary also helped BP navigate the 2014 oil price crash, which battered the energy sector and forced companies to streamline, overhaul portfolios of assets and cut costs dramatically for an era of low crude prices.

More recently he has steered BP through a period of growth, including taking on the $10.5bn deal for BHP’s US shale assets in 2018, the group’s biggest acquisition in 20 years.

But Colin Smith, analyst at Panmure Gordon, said he believed Mr Gilvary’s departure came “earlier than anticipated”. He said it was probably associated with “problematic guidance over dividend and strategy”.

A decision was made by the company not to buy back all scrip issuance, shares issued in lieu of dividends, by the end of 2019, despite a commitment by Mr Gilvary to do so. This signalled to analysts that BP would rather preserve its cash than spend it.

Last year, BP also raised expectations that it could increase dividend payouts as confidence in its cash flow grew. But when asked by an analyst on the third-quarter earnings conference call in October if BP would see dividends rise in the fourth quarter, Mr Gilvary said: “Right now . . . the assumption is we won’t.” The remark triggered a share price drop that prompted BP to issue a further statement stating that “no decision had been made”.

Mr Gilvary had told the Financial Times in October he would be “sticking around” despite the new chief executive appointment, adding: “I wasn’t planning on any sudden changes right now.”

In a shift, Mr Gilvary said on Tuesday that now was the “right time to move on”, adding that “BP is in good shape — strong and ready to face the future with new leadership”.

BP said Mr Gilvary informed the board of his decision to leave the company late last year and it was not linked to quarterly earnings.

Chairman Helge Lund described Mr Gilvary as “one of the architects of today’s BP” and said he had been “key to its transformation into a safer, simpler and stronger company”.

Mr Gilvary joined BP in 1986 and held a variety of commercial and financial roles including chief executive of its integrated supply and trading business. He was also heavily involved in the group’s Russia business.

Mr Looney, who takes over as chief executive on February 5, said: “All of us at BP will greatly miss Brian’s clarity of thought, his candour and his commitment to the company.”

He added: “I have worked side-by-side with Murray for many years and have the utmost confidence in his ability to step into this critical role.”

Mr Looney will have to spell out how the energy major will respond to a transition to cleaner fuels at a time of rising environmental activism and demands from shareholders that BP takes action on climate change. His team takes over as the company designs its next five-year strategy, to launch at the beginning of 2021.

Source: FT