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Gennady Timchenko
Uggy. - you missed Colter and California disasters -
Another âgrowth engine runs out of fuel . How much money have they wasted on non-commercial Businesses. First wind farms, now EV charging. BP Ventures must go next. BP has cut over a tenth of the workforce in its electric vehicle charging business and pulled it out of several markets after a bet on rapid growth in commercial EV fleets didnât pay off, company sources said.
The changes at BP Pulse are part of CEO Murray Auchinclossâs efforts to focus on the British companyâs most profitable segments as it battles investor doubts over its plan to shift away from oil and gas to low-carbon energy.
BP Pulse reduced the number of countries it operates in from 12 to four in recent months, focusing now on the United States, Britain, Germany and China, where it expects the fastest growth in the EV market, BP told Reuters.
As a result, the division axed over 100 jobs in recent months, or over 10% of its global workforce of 900, with many employees being moved into other divisions and only a handful leaving the company, the sources said.
BP did not comment on the exact numbers of jobs that were cut.
The move comes as automakers across the world tighten their belts amid a slower than expected uptake of EVs. Tech publication Electrek reported on Monday that U.S. EV pioneer Tesla
would lay off more than 10% of its workforce.
EV charging, however, remains one of BPâs key growth engines.
BP had over 29,000 charging points globally at the end of 2023, compared with 22,000 a year earlier, it said in its annual report. It aims to have 100,000 points by 2030.
âOur EV ambitions have not changed,â BP said. The changes at BP Pulse are âa step towards ensuring that we can execute our goals with even greater precision and effectivenessâ.
BP Pulse has also stepped away from several bets it made since launching its energy transition strategy under previous group CEO Bernard Looney in 2020.
BP initially expected commercial car fleets would be first and fastest to switch to EVs at scale, but that did not pan out, in part because governments eased mandates for switching to EV vehicles, Auchincloss told analysts in February.
âWe thought fleets would move first. But given recessionary pressures and some relief from governments, fleets have slowed down,â Auchincloss said.
BP last May also shut down its home EV charging business. The company now focuses mostly on fast charging hubs.
The company says it expects returns from its EV charging and convenience stores operations to exceed 15% and create $1.5 billion in earnings before interest, taxes, depreciation, and amortization by 2025.
Auchincloss says no change in BP strategy - and 8 weeks later changes it. Latest interview - claims BP can change world oil prices - whatâs he on?
"We see growing demand for energy right now across the globe," he told the New York Times. "It is not slowing down." As a result, BP is "going to invest in today's energy system, to help make sure that prices don't get out of control," Auchincloss explained to the news outlet. "So that's investing into oil and gas."
With McKinsey disciple Looney out of the way, the new CEO has stated the obvious. For every barrel BP didnât produce Exxon, Shell and Chevron produced it instead. But whoever is advising him led him to claim that BP increasing oil production will affect world oil prices. Obviously nonsense.
BPâs reserves/production ratio is lowest of majors, there is no business renewal plan for oil/gas, Looney fired all the upstream experts and governments donât trust BP. No-one cares if motorists bought 21 million cups of coffee from BP last Tuesday. Itâs barrels/day, stupid.
This about-turn might save BP but one has to wonder why all the high-paid help on the Board and Leadership Team are still in their jobs. After all theyâve presided over the biggest disaster for BP since the Macondo blow-out in terms of lost value in the recent past and certainly in the future.
Voteâ them out at the AGM
Sou
âThe board is in complete agreement that Murray was the outstanding candidate and is the right leader for bpâ
Competitive process? Doubt it. In reality there was no option apart from MA because, after years as BLâs assistant running E&P and subsequently as CEO, MA knows âwhere the bodies are buriedâ.
They are the closely guarded secrets of BP which may be immoral, simply embarrassing or confidential. MA knew of his predecessorâs behaviour, but kept quiet and now has no moral authority - an essential ingredient for leadership.
More damage to the BP Boardâs reputation from investors
Theaky
Itâs a strategic decision. Equinor is 67% owned by Norwegian government and Norway supplies >25% of UKâs gas. Produces >2 m boe/day. And is dabbling in offshore wind with caution.
BP chairman Lund was groomed as a high flyer early in his career and made ÂŁ10s of millions in oil and gas.
Probably sees the chaos created by BPâs shaky management as an opportunity. Great chance to clear out BPâs âoveractive underachievers and replace them with a new team.
In fact, Lund rose through the ranks when Jens Staltenburg was Energy Minister and now runs NATO.
BP and Equinor are no strangers. In 1992 BP and Statoil formed an alliance to branch out into international ventures which took them into Azerbaijan, Kazakhstan, Angola, Nigeria and elsewhere with a preliminary share 66% BP and 33% Statoil. Also, Helge Lund is very familiar with UKâs E&P industry. Furthermore, the Norwegian state is one of BPâs top 10 shareholders.
At the time Helge Lund, BPâs current chairman was a management consultant with McKinsey and as political adviser for the Conservative Party in the Norwegian parliament. He became CEO for Aker KvĂŚrner in 2002 and CEO of Statoil in 2004, Lund oversaw Statoil merging with the oil & gas division of Norsk Hydro in 2007 to create StatoilHydro.
In 2014, Lund resigned as CEO for Statoil to join the management team of the UK's BG Group as CEO from 9 February 2015.
Following the takeover of BG Group by Royal Dutch Shell, Lund was out of a job, but did receive a total of ÂŁ5.5 million for his 11 months work, and ÂŁ9.7 million in shares in February 2016, as a result of the takeover.
In June 2016, Lund was appointed to the board of directors of Schlumberger. On 26 April 2018, it was announced by BP that he would join their board on the 1 September 2018 and succeed Carl-Henric Svanberg as chairman with effect from 1 January 2019. So perhaps a merger with Equinor is possible, provided Lund can sort out the political alignment in Oslo.
Https://www.thetimes.co.uk/article/bps-chairman-is-sliding-away-on-a-slick-of-poor-decisions-9g32l39f7
Another insightful article by Oliver Shah. BP goes from bad to worse.
gingy
itâs bad when investors start to doubt the ability of the management to function, but ten times worse when staff realise their leadershipâs authority is slipping through their fingers.
on a ship this causes a mutiny, and in a big public company staff start to **** off their leadership to customers which inevitably leads to lower sales as customers switch to brands they trust.
management then loses control, value is destroyed and a competent competitor takes over. it really is looking like a slow-motion car crash caused by the former ceo. beyond macondo.
Dr P
Many inside BP who know the whole, ugly story are watching those on BPâs Leadership Team gradually losing their moral authority to lead. None of them had the guts to follow BPâs own Code of Conduct and put an end to the former CEOâs serious misconduct.
So itâs not just a new CEO needed by BP, but rather a major clear-out of those involved - or FOBL to use BPâs internal acronym.
Crisis? What crisis?
The glacial progress in finding a new CEO is the subject of discussion and frustration for shareholders. /but all that aside, one concern is whether BP could respond to a major incident if it happens tomorrow - anywhere, any time. We all know production, transport, refining and distribution of oil and gas is an inherently hazardous enterprise. And the consequences of getting it wrong can wipe $ billions from BPâs value and wreck its reputation.
Yes, crisis management plans exist, but experience shows an effective response depends heavily on leadership and timely, convincing communications.
Would the current leadership team, CEO and board run for the exits rather than face up to an operational crisis in front of the worldâs TV cameras in person?
Weâve seen it happen.
By dragging their feet, without a credible CEO with experience of âkicking steelâ who really cares and a well-connected press office, BPâs Board is taking unnecessary risks.
Itâs Helge Lund - the invisible chairman of BP
Sou Tangile
If what BP says is so brilliant why itâs performance worst of the major oil companies? Answer - shambolic strategy brewed up by McKinsey which features no hard financial forward performance metrics.
Hopefully new CEO will clear out net-zero dreamers.
Dr P
Thanks.
30 years ago I think BP had 22% market share in Turkeyâs fuels market, including bottled gas for cooking. But the retail business everywhere in world is subject to rapid change as governments and minor officials meddle with taxes, surprise regulatory interventions etc which erode margins. In Turkey, managing relationships in Ankara is tough, which led to difficulties for OMV and Total who finally exited.
But, in contrast, BPâs big upstream and pipeline projects in Turkey like the $40bn Southern Gas Corridor and the BTC oil pipeline are protected by Inter-Government and Host Government Agreements which even Presidents dare not meddle with. So theyâve survived change of President in Azerbaijan,revolution and Russian invasion in Georgia, regime change, coup and earthquakes in Turkey.
Thatâs one reason E&P is a more robust, long term investment compared to grocery stores, EV charging and renewables.
Charley 156 - Turkey is very important for BP. BP was first present in Turkey 1912 with the registration of the âLion and Sunâ and âPalm Treeâ brands for use by the Anglo-Persian Oil Company, following the discovery of oil in Iran in 1908. Anglo-Persian negotiated with the Turkish Sultan for the Kirkuk area in 1926 leading to a huge oilfield. This was all under the Ottoman rule and later became Iraq.
In 1948 Anglo-Iranian Oil Company assumed complete responsibility to maintain Steaua Romanaâs quota share of the Turkish market, with bp entering the Turkish oil products market in 1949 as car ownership grew. Full acquisition was completed in 1958 and BP Petrolleri A.S (BPP) was established and registered. BP Petrolleri is what has been sold to Vitol.
BP was also a shareholder of the ATAS Refinery at Mersin that became operational in 1962, which was shut down in 2004 and turned into a terminal to import and distribute refined products in southern Turkey.
BP carried out a deep-sea drilling in eastern Black Sea, with the state oil company TPAO, in a 50/50 partnership in 2005. At one time in the 1980s BP held a permit for the entire Turkish Black Sea.
Baku-Tbilisi-Ceyhan pipeline was inaugurated in July 2006 and is operational since, where bp had and continues to have a key role in to export crude to the Mediterranean markets.
Turkey is a key âanchorâ market for Shah Deniz gas from Azerbaijan since 2006 and for Shah Deniz 2 since 2018. where bp did and continues to carry out a key role in both projects. At 16 bnboe (100 tcf) Shah Deniz is BPâs single ever biggest exploration discovery since Prudhoe bay. Shah Deniz is so big that it supports the new pipeline across Turkey and the Adriatic to Italy where Azerbaijanâs gas enters Europe.
A reminder that E&P is BPâs core skill and where the big money is made.
Weird
BP has been trying to sell the Turkey downstream fuels business for a long time. Successive downsizing projects and other things delayed the inevitable, but at the end of the day, the business just doesnât make enough money to stay afloat. Shell does OK because they made a couple of mergers and got up to a good size. their profit/site is not great, but the number of sites makes up for it. Total sold their Turkey business a few years ago. Vitol, via Petrol Ofisi, now have total control of the retail sector and some import terminals for refined products like ATAS near Mersin.
BP gives up in Turkey after 111 years
https://www.vitol.com/vitol-owned-petrol-ofisi-agrees-to-purchase-bps-turkish-fuel-operations/