Corporate oustings aren’t usually announced at 10pm. So BP’s decision to do just that took the world by surprise.

The move to disclose the exit of chief executive Murray Auchincloss late at night in London was a purely functional one, insiders have insisted, rather than being motivated by panic.

Auchincloss’s successor, Meg O’Neill, is based in Australia, where she currently runs Woodside Energy. BP wanted to give investors there a chance to digest the news that Woodside’s boss was leaving before trading on the Sydney stock exchange began.

Still, back on the other side of the world, the announcement was a bolt from the blue for many in the City. For more than a few, it was a welcome one.

“The optics of the announcement may not look great, but this is a good decision,” says Ashley Kelty, an oil and gas analyst at Panmure Liberum. “O’Neill is respected in the sector and she’s the kind of chief executive BP needs right now.”

Auchincloss is leaving after less than two years in the post, following an unhappy period that has seen BP besieged by activist investors after its ill-fated forays into green energy. Shares are down by around 16pc since he took over.

The company, valued at £66bn, has also faced unwelcome speculation – denied on all sides – that it was being eyed as a takeover target by arch-rival Shell.

BP under Auchincloss gave the impression of a business not in control of its own destiny.Murray Auchincloss departs as BP’s chief executive after less than two years in the role - Walaa Alshaer/Bloomberg

Albert Manifold, who took over as BP’s chairman in October, was not sparing when explaining his reasons for ousting Auchincloss.

The beleaguered oil and gas company needed to become “simpler, leaner and more profitable”, he said, with more “rigour and diligence” required in the C-suite.

Iain Pyle, senior investment director at Aberdeen Investments, which has a significant stake in BP, said: “Did BP need a change in CEO? I’m not sure it was necessary, but to drive genuine change at pace, I do think it is helpful to have a fresh voice at the top and for that to be external.

“There was widespread perception that the new chair may want to make a change and it is best if that is done quickly and effectively.”

He added: “When we met him [Albert Manifold] recently, it was very clear he would act to drive change through the business and, in particular, get BP back focused on what it does best, which is primarily upstream oil and gas production.”

Elliot Management is also understood to be pleased with Manifold’s decision to act. A person familiar with the hedge fund’s thinking said it welcomed the appointment of an outsider.

Manifold said O’Neill’s “record of driving transformation, growth and disciplined capital allocation” made her the right woman for the job.

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Her appointment signals a clean break from the approach taken under Auchincloss and his predecessor, Bernard Looney, which saw BP announce ambitious green energy targets only to incrementally row back on them.

Looney was a workaholic and gifted communicator who challenged the public and his investors to “reimagine” BP as a green energy champion.

He set out plans to slash the company’s oil output by 40pc and reach net zero carbon emissions by 2050, in a break from the rest of the industry.Meg O’Neill, who currently runs Woodside Energy, is set to take over as BP’s new boss - BP via Reuters

The plan won cautious praise from climate campaigners but soon looked poorly-timed, as investors baulked at lacklustre returns and the Ukraine war sent oil and gas profits soaring again.

After that, Looney was forced to scale back BP’s eco commitments. His dismissal in September 2023, following undisclosed relationships with colleagues, suddenly left then-finance chief Auchincloss carrying the can for the strategy.

The Canadian accountant was confirmed as full-time chief executive the following January but struggled to step out of his predecessor’s shadow.

His gradual retreat from renewable energy projects failed to satisfy activists such as the feared activist hedge fund Elliot.

Under Auchincloss, BP has halted plans for biofuel refineries planned in Rotterdam, the Netherlands, and another at Lingen, Germany.

It has also sold off 10 US onshore windfarms, frozen offshore wind investments and announced plans to sell most of its stake in solar developer Lightsource.

In the UK, the company has also abandoned planned investments in hydrogen production plants. But to some critics, it was never clear whether Auchincloss’s heart was really in it.

“He was Looney’s man,” says Kelty, “and one of the key people behind the whole pivot to renewables – he was the one signing all the cheques. His appointment didn’t really change anything.”

O’Neill is well-placed to forge a new path. A former Exxon Mobil executive who has been chief executive of Woodside since 2021, she has taken a much tougher stance on net zero, hitting back at young climate activists who have sought to shame Woodside over its carbon emissions.

“It’s been a fascinating journey to watch the discussion, particularly amongst young people who have this very ideological, almost zealous view of, you know, fossil fuels bad, renewables good, that are happily plugging in their devices, ordering things from [online Chinese retailers] Shein and Temu – having, you know, one little thing shipped to their house without any sort of recognition of the energy and carbon impact of their actions,” she has said.

“So that human impact and the consumer’s role in driving energy demand and emissions absolutely is a missing space in the conversation.”

At an annual general meeting in May this year, she also taunted campaigners by playing loud promotional videos to drown out the sounds of their protests.

“We have plenty more of these videos we can play,” O’Neill reportedly told them. She has been targeted by activists at her home in Perth, Western Australia, where she lives with her partner and daughter.

The activists tried to deface her property with paint, an experience O’Neill said left her family “shaken, fearful and distressed”.

“This was not a ‘harmless’ protest. It was designed to threaten me, my partner and our daughter in our home,” she said at the time, denouncing the campaigners as “extremists”.

It is understood Manifold’s search had been going on for months after Auchincloss expressed an “openness to step down were an appropriate leader identified”.

During the process, Rolls-Royce boss Tufan Erginbilgic, a former BP executive, is also thought to have been among the potential candidates approached by headhunters but turned down the opportunity to apply.

At Woodside, O’Neill earned a reputation for being hard-nosed and “low-ego”, with other reports describing her as “an engineer’s engineer”. She oversaw a large increase in production at the Australian company as well as transformative deals, including a merger with BHP Petroleum and a takeover of American LNG producer Tellurian.

One industry executive who has met her multiple times describes O’Neill as “very direct, sharp on the numbers, always well prepared but no patience for waffle”.

“She’s very demanding, but well respected,” they add. “If you like straight talk and clear expectations, she’s good to work with; if you prefer a softer, consensus-led style, she will be very tough on you.

“Personally, I think she will shake BP up – and that’s probably what it needs. It’s a very good hire.”

When she takes over in April, she will become BP’s first female chief executive and, more significantly, the first outsider chosen for the top job in the company’s 116-year history. The 55-year-old American from Boulder, Colorado, will also be the first openly gay woman to helm a FTSE 100 company.

One investor said they felt Auchincloss’s departure was a good opportunity for BP to finally “close the Bernard Looney chapter.” Auchincloss will stay in an “advisory role” for another year.

His exit is expected to be the trigger for changes beyond just the boardroom. Kelty believes O’Neill will be expected to take a scalpel to the company’s “bloated” corporate structure, with large numbers of redundancies expected.

“It’s absolutely ridiculous that BP has the same cost base as Shell but is a much smaller producer,” he adds. “They need to make a big dent in the headcount.”

Those for the chop could also include some of BP’s 14-strong board, whose 10 non-executive directors include several appointed under the chairmanship of Helge Lund and who strongly supported BP’s failed shift to green energy.

The person familiar with Elliott’s thinking says the investor also regards BP’s turnaround as being in the early stages, with further asset sales and cost reductions needed.

“It’s positive that O’Neill is an outsider, because she won’t have any pre-conceived ideas about the way things are done at BP,” says Kelty. “Hopefully, that means she can shake things up.”

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