bp interim CEO denies U.S. shale acquisition claims, defends focus on energy transition

Laura Hurst, Bloomberg October 31, 2023

(Bloomberg) – bp Plc’s temporary boss gave a robust defense of the company’s strategy, batting away suggestions that he needs to follow the big oil deals done by U.S. competitors Exxon Mobil Corp. and Chevron Corp.

bp Interim Chief Executive Officer Murray Auchincloss

“We’re focused really on transition” to net zero emissions, Interim Chief Executive Officer Murray Auchincloss said on Tuesday. bp’s growth engines will be clean energy “and not the oil and gas side.”

Speaking at his first earnings presentation since taking the top job after the surprise resignation of former CEO Bernard Looney, Auchincloss reiterated his commitment to his predecessor’s plan and questioned the wisdom of acquisitions when crude prices are high.

“At $90 oil, I’m not sure it makes sense for us to pursue very many oil and gas transactions given the scale of our resource base,” Auchincloss said on a call with analysts.

In the past month, Exxon and Chevron agreed a pair of takeovers together worth more than $100 billion, both of which are intended to boost oil and gas production growth. The deals threaten to widen the oil and gas industry’s trans-Atlantic valuation gap as investors reward the U.S. majors for doubling down on the superior returns from fossil fuels.

“I feel very confident that we’ll be able to continue to close that gap over time,” Auchincloss said. “We’re seeing heavy U.S. investment into the company.”

bp has adjusted its low-carbon ambitions since Russia’s invasion of Ukraine — pledging to keep its oil and gas output flat for the rest of this decade. In contrast, Exxon expects to more than double its production in the Permian shale formation through the takeover of Pioneer Natural Resources Co. 

Auchincloss didn’t rule out bp deals altogether.

“If I can do something counter-cyclical, I will,” he said in a separate interview with Bloomberg. “If I can find barrels that are cheap, that we think fit well into our portfolio near our operations, then I will.”

However, when it comes to the U.S., Auchincloss said the company didn’t need to buy additional barrels. bp has 8 Bbbl of resources to develop in in its Paleogene reservoirs of the Gulf of Mexico and 7 Bbbl from its shale business BPX Energy.

“We don’t really feel we need more acreage,” Auchincloss said. “We’re very, very happy with our position in the U.S.”

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