BP names Meg O’Neill CEO after sudden Auchincloss exit

Dec 18 (Reuters) - BP has ‌named Meg O'Neill, chief executive of Australia's Woodside Energy, as its next CEO, signalling a renewed push to boost returns and double down on oil and gas after retreating from an ‍ambitious renewables ‌strategy.

O'Neill, who will take over in April following the abrupt exit of Murray Auchincloss, becomes BP's first external CEO in its more than century-long history and the first woman to lead any ⁠of the world's top five oil majors.

Here's what analysts are saying about the announcement:

ASHLEY KELTY, ANALYST, PANMURE ‌LIBERUM

"This is a really positive update, as Murray Auchinloss was one of the chief architects of the disastrous pivot towards low margin renewables that BP undertook under disgraced former CEO Bernard Looney. His uninspired leadership has seen BP underperform peers for a number of years."

"Ms. O'Neill does have a job on her hands as the balance sheet is in poor shape and the bloated cost base needs to be addressed."

"It's not clear whether the move is down to pressure ⁠from activist investor Elliott or Chairman Bert Manifold making moves to sort out the business, but we would imagine that investors will be thrilled to see the end of the woke management ethos that has prevailed under Auchincloss."

MAURIZIO CARULLI, GLOBAL ENERGY ANALYST, QUILTER ​CHEVIOT

"BP's decision to replace Murray Auchincloss as CEO is striking, not least for its timing."

"The move underlines new Chair Albert ‌Manifold's hands-on approach and likely accelerates BP's strategy reset. While takeover chatter will inevitably resurface, with ⁠Shell's bid for BG (Group) after a leadership change remaining fresh in memory, the odds of a major deal feel lower than earlier this year.

"In the short term, expect some uncertainty, but with Carol Howle stepping in as interim CEO, BP has a safe pair of hands to steer the ship until April."

BERNSTEIN ANALYSTS

"Whilst a CEO change will create initial uncertainty as to what lies ahead ​strategically for BP, the Chairman's comment gives a clear signal: BP needs to shift up a gear or two to a more radical transformation of what has emerged as a complex organization."

"Taking a completely fresh view, as only an outsider can do, will be critical to shaking BP up and speeding up what is a necessary process of asset restructuring, organizational/simplification and, ultimately, delivery of what really adds value, namely low cost hydrocarbon growth."

BIRAJ BORKHATARIA, ANALYST, RBC CAPITAL MARKETS

"It is a little surprising to see the Chairman willing to make a major change in such a short period of time, given he ​has little direct ‍oil and gas experience. That said, with the activist in ​the shares, it felt like this move was more of a 'when, not if'."

"This move potentially sets BP for renewed focus over time, however it will clearly create short term turbulence and more uncertainty for now."

MATTHEW LOFTING, ANALYST, J.P. MORGAN

"The decision is likely to be seen as a bold move by the BoD under new chair Albert Manifold."

"Overall we expect investors to be receptive to the change and adopt an 'open door' to fresh eyes being cast over BP's strategic agenda."

SAUL KAVONIC, ANALYST, MST MARQUEE

"Meg has built a very strong reputation in the oil and gas industry in the space of a few years, and is even more highly regarded overseas than in Australian markets."

BRYNN O'BRIEN, EXECUTIVE DIRECTOR, AUSTRALASIAN CENTRE FOR CORPORATE RESPONSIBILITY

"At Woodside, O’Neill’s departure is an opportunity for a much-needed strategy refresh."

"Investors will be hoping that O’Neill’s departure is a circuit breaker ⁠on Woodside’s habit of pursuing high-capex, marginal fossil fuel projects, and is an opportunity to instead start focusing on better capital returns."

PIPER SANDLER ANALYSTS

"Although the announcement was surprising in terms of timing and immediacy, we expect that the change will ultimately be positive for the stock.

"While investors have generally been ​positive on the direction of travel under Auchincloss, including material changes to capital allocation and strategic direction, it has also been clear that there is market appetite for a more aggressive approach in both scope and pace."

"The decision highlights a level of speed and focus under new Chairman of the Board, Albert Manifold, that was lacking previously, and is likely to be welcomed by investors."

PAUL CHENG, ANALYST, SCOTIABANK GLOBAL EQUITY RESEARCH

"We believe the market will view the step-down of Auchincloss with positive lens. In our opinion, the appointment of a new outsider ‌CEO signals the Board's impatience with the pace and extent of previously announced restructuring efforts."

"In the past, we have found successful cases where the new outsider CEO with no legacy baggage had successfully served as a disrupted change agent that led to a significantly higher performance level within a couple of years."

(Reporting by Arunima Kumar in Bengaluru; Additional reporting by America Hernandez in Paris;Editing by Eileen Soreng and Ronojoy Mazumdar)