The British oil company BP has announced this Tuesday a new internal reorganization that affects several top-level executives and reinforces its focus on oil and gas activities, just two weeks after the abrupt dismissal of its president Albert Manifold for "unacceptable" conduct issues.
The company has decided to concentrate its activity in only two major business areas: exploration and production ('upstream') and refining and marketing ('downstream'), compared to the three segments into which it was structured until now. With this redesign, the renewable energy division will no longer be integrated into these operational blocks and will report to the technology function, thus consolidating BP's strategic shift towards traditional energy sources.
Within the framework of this new organization, CEO Meg O'Neill has appointed Gordon Birrell as Executive Vice President of 'upstream', while Richard Harding will temporarily assume the position of Executive Vice President of 'downstream', pending the definitive appointment of a permanent head.
"Over the last two months, I've spent time with our teams, partners, and investors around the world, and I'm encouraged by the strong support for our strategic direction. Focusing BP into two distinct segments is an important step to accelerate delivery. It will reduce complexity and strengthen execution," stated Meg O'Neill.
The chief executive defended this overhaul, assuring that it will facilitate the capture of opportunities across its portfolio, strengthen the balance sheet, and enable the promotion of sustainable growth.
Thus, the 'upstream' area will encompass the oil and gas business, exploration, development, and production tasks, as well as BP's joint ventures in this field and its renewable natural gas and carbon capture and storage activities.
In parallel, the 'downstream' segment will integrate refineries, terminals, pipelines, convenience and mobility, biofuels, aviation, and hydrogen, which, according to the company, will facilitate more aligned management of the manufacturing, transportation, and marketing of its products.
"This organizational change is based on the concrete measures BP is taking to simplify its portfolio, reduce costs, maintain strict capital expenditure discipline, and strengthen its balance sheet, all in order to generate greater value and profitability for shareholders," concludes a company statement.
At the end of May, BP's board of directors unanimously decided to end Manifold's tenure as chairman following "serious concerns expressed to the Board regarding significant governance, oversight, and conduct standards" and appointed Ian Tyler as interim chairman.
On the other hand, Meg O'Neill took over as CEO of the oil company just over six months ago, and the new interim chairman stressed during this period that the board of directors is "very impressed with her."