Bob Dudley: a decade at the top

‘Value over volume’

Later recalling the period, he said: “That event caused us to look afresh at everything we do in BP. Not only safety, but also how we create value in a way that is sustainable over many decades.”

 To that end, Dudley embarked upon a radical divestment plan. Its aim was to safeguard BP’s future, while also ensuring it could fully meet its commitments to the Gulf.

Over three years, the number of BP-operated upstream installations was cut by half, and the number of wells by a third, though only around 10% of BP’s oil and gas reserves were given up. It was an approach best summarized in Dudley’s own phrase: the pursuit of ‘value over volume’.

Dudley was also clear that BP needed more than operational and financial reform. Its culture also needed to change. He instilled a new set of values, of which safety  ̶  now overseen by a new global Safety and Operational Risk team  ̶  was the most prominent. BP steadily became a more open, inclusive, and modern place to work where leaders were encouraged, by Dudley, to ‘listen to the quietest voice in the room’.

In Russia, he saw an opportunity to resolve business tensions that had been simmering for years. He brokered a deal to sell BP’s share of the venture, TNK-BP, to Russian oil producer Rosneft resulting in a significant infusion of cash, a 19.75% stake in Rosneft, and a positive turnaround in a key relationship.

Under Dudley’s leadership, a different BP was emerging – one that was simpler, more flexible, and in which safe operations and profitability went hand-in-hand.  

Lower for longer

By 2014, BP was in good shape, but there was little time to gather breath. That summer, the oil price began to plummet, falling from $115 per barrel to $27 in January 2016. It was one of the largest oil price declines in history, and the second great challenge of Dudley’s tenure. 

The difference was that, this time, it was an industry-wide problem. The industry responded by cutting projects, investment and nearly half a million jobs worldwide. 

BP was under pressure, yet one effect of its capital discipline and leaner portfolio was a better ability to weather the downturn. BP’s stronger position was reflected in Dudley’s own communicative style, which avoided spin in favour of plain speaking. Resisting any temptation to talk up prices, he could say with confidence that oil was likely to be ‘lower for longer’, and later, ‘lower for even longer’. 

By 2017, oil prices had climbed back to around the $60 per barrel mark – above BP’s break-even price.

Advancing the energy transition

BP’s recovery had been largely achieved, and BP was coming out of the downturn. But the final chapter of Dudley’s leadership saw BP enter a third phase – the era in which the energy transition became a global priority. 

While the Deepwater Horizon accident was a BP-wide challenge and the oil price slump was an industry-wide challenge, the energy transition remains a worldwide societal challenge. 

The drive for cleaner energy is not new territory for BP. Two decades ago, BP was one of the first energy companies to address the threat of climate change, pioneering alternatives like wind, solar and biofuels, under the leadership of then CEO John Browne. 

Dudley has been just as candid as his predecessor, saying in 2019: “The world is on an unsustainable path. We need a faster transition to a low carbon energy system and a net-zero emissions world. The last thing I want is a delay today that results in a precipitous course-correction tomorrow.”

These words were backed by action in a plan set out in the Advancing the Energy Transition report. In 2019, Dudley’s final year as chief executive, BP invested close to a billion dollars on low carbon activities.

Such investment has helped BP to grow one of the biggest solar developers in Europe, Lightsource BP. In BP Bunge Bioenergia, BP has built the world’s second-biggest sugarcane ethanol biofuels company by effective crushing capacity. And, supporting the growth in electric vehicles, BP Chargemaster operates the UK’s largest EV charging network, powering 50 million miles of electric driving last year alone.

Recognizing the need for cooperation across the industry, Dudley also took a lead in helping to establish and chair the Oil and Gas Climate Initiative, which brings together companies representing 30% of the oil and gas industry. Its members support the Paris Agreement and its aims through reducing the carbon intensity of their operations, and deploying large-scale carbon capture.