Zeus: BP clears the decks for new CEO

Writedown of up to $5 billion for green businesses may not be its last

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Meg O’Neill will be BP’s next CEO. O’Neill most recently was CEO of Woodside Energy in Australia. Photo: Woodside Energy.

(David Callaway is founder and Editor-in-Chief of Callaway Climate Insights. He is the former president of the World Editors Forum, Editor-in-Chief of USA Today and MarketWatch, and CEO of TheStreet Inc. His climate columns have appeared in USA Today and The Independent. He is also the author of a debut novel called Unregulated Militia, about drone warfare in the United States).

SAN FRANCISCO (Callaway Climate Insights) — Most energy investors could see BP Plc’s $4 billion to $5 billion writedown this week for disposing of its green businesses coming from a mile away. The fact that it came even before its new CEO starts this spring is also not surprising.

The timing of it coming the same week that scientists confirmed last year was the third hottest in human history, following the previous two, should give climate investors pause.

Nine months after the British oil and gas giant said it would make a massive pivot away from renewable energy after a decade of investment, and instead refocus on its global fossil fuels operations, the other shoe was bound to drop sooner rather than later. Chairman Albert Manifold’s shock decision last month to oust CEO Murray Auchincloss for moving too slow in the reorg favored sooner.

Meg O’Neill, who runs Woodside Energy Group, won’t start her new CEO job at BP until April, but with time wasting during the quaint British tradition of “gardening leave” between executive jobs, Manifold clearly wanted to get as much of the bad news out of the way as possible, before it reports earnings on Feb. 10.

The writeoff of some $4 billion to $5 billion for the green assets illustrates for investors that the company’s solar, wind, and hydrogen businesses were worth much less than originally thought, and more than it was carrying on its books. The charges bring to more than $20 billion the writeoffs BP has taken in the past three years.