BP’s new chief executive must abandon net zero and steer the company decisively back to oil and gas, shareholders have said.

Investors said the shock departure of chief executive Murray Auchincloss should prompt the BP to refocus on “what it does best”.

The British oil giant shocked the world by announcing the departure of Mr Auchincloss late on Wednesday evening. He is to be replaced by Meg O’Neill, a 55-year-old American who currently heads up the Australian oil and gas company Woodside Energy.

Elliot Management, the activist investor with a near 5pc stake in BP, is understood to support the change and is pushing for Ms O’Neill to move quickly to sell-off underperforming assets, including those in green energy.Meg O’Neill will be the first woman to lead BP and the first chief executive to be appointed from outside the company - SeongJoon Cho/Bloomberg

Iain Pyle at Aberdeen Investments, which has an 0.4pc stake in BP, said Ms O’Neill’s appointment showed new chairman Albert Manifold was attempting to “get BP back focused on what it does best, which is primarily upstream oil and gas production”.

Analysts at AlphaValue said investors expected a “continued refocus on oil & gas” at BP after Ms O’Neill’s appointment, with a focus on “measurable outcomes” such as cashflow and return on investments.

The surprise leadership shake-up comes as BP attempts to improve performance and win back investor support after a misguided shift to green energy under former chief executive Bernard Looney.

Mr Looney pledged that the oil and gas business would reach net zero by 2050, out of step with the rest of the industry.

Mr Auchincloss, who replaced Mr Looney in 2023, had been rowing back on the strategy but faced criticism he was moving too slowly.

“In the past he has been a strong defender of capital allocation to low carbon areas of the business that have not yet delivered the expected returns, so it is perhaps easier for someone external to start with no baggage in refocusing the business and giving a credible message to the market,” one BP shareholder said.

Ms O’Neill has been publicly sceptical of net zero, criticising activists for ignoring the carbon footprints of online shopping and emphasising the importance of oil and gas to energy security.

At Woodside, the 55-year-old has overseen the acquisition of BHP Petroleum and expansion into the US since. She has run Australia’s biggest independent fossil fuel company since August 2021.

Prior to that, the American spent 23 years at ExxonMobile, the world’s biggest publicly listed oil company. At Exxon, her work included advising then chief executive Rex Tillerson, who later became US president Donald Trump’s first secretary of state.

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Ms O’Neill’s appointment marks a number of firsts: she is the first external chief executive of BP; the first woman to lead a global oil major; and the first openly gay chief executive on the FTSE 100.

Mr Pyle said: “Given the push to accelerate the pace of change through the business, an external view may well be helpful at this point.”

BP insiders insisted the late night announcement of the chief executive change was timed to allow investors in Australia, where Woodside is listed, to digest news of Ms O’Neill’s departure. Shares fell more than 3pc in Sydney.

However, the unusual timing and the suddenness of the change – Mr Auchincloss is stepping down immediately – unsettled the City. Shares in BP closed down almost 1.4pc in London on Thursday.

Mr Auchincloss will stay on as an adviser to BP until December 2026. BP declined to comment on what he will be paid for relinquishing the chief executive role and in his new job. The company similarly declined to comment on Ms O’Neill’s pay.

The Woodside boss was paid £2.6m in salary, bonuses and shares last year. Mr Auchincloss received £5.4m last year at BP and £8m in 2023, mostly in shares and bonuses.

Ms O’Neill is currently based in Perth, Western Australia. London-headquartered BP did not respond to questions about where she will be based when she takes up the chief executive role in April.

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