BP CEO says company must sharpen financial discipline, tighten spending
BP's Strategic Refocus and Financial Discipline
By Stephanie Kelly
Leadership Changes and Investor Trust
LONDON, July 9 (Reuters) - BP CEO Meg O'Neill said on Thursday the British energy major needs to prioritise financial discipline by simplifying its portfolio, cutting costs and tightening capital spending, as the company refocuses on its core oil and gas investments.
O'Neill, who took over as CEO in April following the abrupt departure of Murray Auchincloss last year and the removal of Chair Albert Manifold in May over bullying allegations, has been working to rebuild investor trust by cutting costs and debt. Manifold denies the allegations.
Investment Strategy Reset
She said BP needed to be more selective in its investment decisions as it works through its strategy reset after an unsuccessful push into renewables.
"We need to be deliberate about where we invest and where we don’t," O'Neill said in a LinkedIn post on the 100th day of her being in the role. "We need to make fewer, better choices and hold ourselves to account."
Key Priorities for BP
She laid out three priorities to make BP simpler and more valuable: operational excellence, improved accountability and strong discipline in costs, cash and capital.
Organizational Changes and Market Response
Business Segment Reorganization
BP's reorganisation into two business segments — upstream and downstream — from three, went into effect at the start of this month.
O'Neill said on Thursday the move will help reduce complexity at the energy major, with trading connecting the upstream and downstream businesses.
Response to Global Energy Crisis
The start of her tenure at BP came as the U.S.-Israeli war on Iran disrupted the global energy market with little shipping traffic going through the critical Strait of Hormuz.
Operational Excellence in Crisis
O'Neill said BP's trading and shipping teams worked with its refining unit to deliver an extra 50 million litres of diesel from Cherry Point refinery in Washington state to Sydney to help increase supplies in Australia, while BP's Castellón refinery in Spain increased jet fuel output 30% ahead of Europe's summer travel season in response to the crisis.
The crisis helped boost BP's results in the first quarter, with profit more than doubling year-on-year to $3.2 billion.
Reporting and Editing
(Reporting by Stephanie Kelly; Editing by Emelia Sithole-Matarise)
