The beleaguered energy giant BP unexpectedly named a successor on Friday for its chief executive, John Browne and said Browne would step down more than a year earlier than expected.
BP, the world's third-largest oil and gas producer after Exxon Mobil and Royal Dutch Shell, has been reeling from the fallout of a series of accidents and mishaps. In one particularly damning recent revelation, a US safety panel found in late October that BP knew about problems at its Texas refinery before 15 people were killed in an explosion in 2005, but did not fix them.
Tony Hayward, BP's head of exploration and production, will take Browne's place when he retires in July. Browne had been expected to stay until the end of next year, when he turns 60, BP's mandatory retirement age.
Analysts and investors said that market pressure drove him out early. Since the beginning of August, BP has lost nearly ?20 billion (US$39 billion) in market capitalization as its stock plunged.
In addition to the Texas explosion, the company has been criticized for a leak, caused by corrosion, that shut its Alaska pipeline last year and US regulators threatened last month to press civil charges against BP after an investigation into allegations of manipulation of the gasoline futures market.
BP is also more exposed than its rivals to Russia, through a joint venture, at a time when that country is taking back control of its natural resources. Market opinion reached a new low last week after the company said on Tuesday that production in the fourth quarter of last year was down 5 percent, worse than market expectations.
"There has been a lot of disappointment" for investors, said Mark Lovett, head of British and European equities for RCM, a division of Allianz Global Investors. The most powerful way to gauge the market impact of the company's problems is to "put Exxon's chart against BP," he said.
"Both companies have the same production issues," he said, "but Exxon has hugely outperformed BP."
BP's stock shot up on the New York Stock Exchange after the announcement was made and was up 4.95 percent, or US$3.05, for the day, closing at US$64.64.
Browne was widely credited with transforming BP into a global energy colossus through a string of deals and paying heed to the environment long before any of his oil and gas peers.
He is "the greatest British businessman of his generation," Peter Sutherland, BP's chairman, said in a statement. "His vision, intellect, leadership and skill will be difficult to follow."
During Browne's tenure, BP's profits and market capitalization grew fivefold and its share price increased 250 percent.
Many analysts and investors view the company's recent problems as an unfortunate end to what was a stellar career, but the series of problems have also raised questions about how well Browne was actually managing the company that he built.
Browne's successor, a BP veteran, was widely praised on Friday.
"He's one of the brightest sparks at BP," said Fadel Gheit, Oppenheimer's oil and gas analyst in New York, who said he had recently spent time with Hayward at BP's operations near the Caspian Sea. "He's extremely smart and very diplomatic," Gheit said.
He added that Hayward was "going to be a breath of fresh air, after the unfortunate incidents over the past few years."
Hayward has been with BP since 1982 and was the group's global treasurer before becoming chief executive of exploration and production. He was not available to comment on the move.
Taiwan will prioritize the development of silicon photonics by taking advantage of its strength in the semiconductor industry to build another shield to protect the local economy, National Development Council (NDC) Minister Paul Liu (劉鏡清) said yesterday. Speaking at a meeting of the legislature’s Economics Committee, Liu said Taiwan already has the artificial intelligence (AI) industry as a shield, after the semiconductor industry, to safeguard the country, and is looking at new unique fields to build more economic shields. While Taiwan will further strengthen its existing shields, over the longer term, the country is determined to focus on such potential segments as
UNCERTAINTY: Innolux activated a stringent supply chain management mechanism, as it did during the COVID-19 pandemic, to ensure optimal inventory levels for customers Flat-panel display makers AUO Corp (友達) and Innolux Corp (群創) yesterday said that about 12 to 20 percent of their display business is at risk of potential US tariffs and that they would relocate production or shipment destinations to mitigate the levies’ effects. US tariffs would have a direct impact of US$200 million on AUO’s revenue, company chairman Paul Peng (彭雙浪) told reporters on the sidelines of the Touch Taiwan trade show in Taipei yesterday. That would make up about 12 percent of the company’s overall revenue. To cope with the tariff uncertainty, AUO plans to allocate its production to manufacturing facilities in
COLLABORATION: Given Taiwan’s key position in global supply chains, the US firm is discussing strategies with local partners and clients to deal with global uncertainties Advanced Micro Devices Inc (AMD) yesterday said it is meeting with local ecosystem partners, including Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), to discuss strategies, including long-term manufacturing, to navigate uncertainties such as US tariffs, as Taiwan occupies an important position in global supply chains. AMD chief executive officer Lisa Su (蘇姿丰) told reporters that Taiwan is an important part of the chip designer’s ecosystem and she is discussing with partners and customers in Taiwan to forge strong collaborations on different areas during this critical period. AMD has just become the first artificial-intelligence (AI) server chip customer of TSMC to utilize its advanced
Chizuko Kimura has become the first female sushi chef in the world to win a Michelin star, fulfilling a promise she made to her dying husband to continue his legacy. The 54-year-old Japanese chef regained the Michelin star her late husband, Shunei Kimura, won three years ago for their Sushi Shunei restaurant in Paris. For Shunei Kimura, the star was a dream come true. However, the joy was short-lived. He died from cancer just three months later in June 2022. He was 65. The following year, the restaurant in the heart of Montmartre lost its star rating. Chizuko Kimura insisted that the new star is still down
RSS