How BP top brass can get an Elliott-backed revamp

Reuters

22-05-2025

LONDON, May 19 (Reuters Breakingviews) - Elliott Investment Management's next big move at BP (BP.L), opens new tab is installing board leadership it likes. The U.S. activist, which now holds 5% of the struggling $78 billion oil major, understandably wants a swift replacement for departing Chair Helge Lund. While suitable candidates aren't exactly abundant, some exist. The sooner a new chair is in place, the sooner BP can push for more drastic changes – including identifying a new chief executive.
Lund and incumbent CEO Murray Auchincloss were key figures in a five-year diversion into low-carbon energy, now comprehensively ditched. Rightly or wrongly, the group now wants to be fossil fuel-focused again. Regaining credibility with investors means appointing leaders with experience in the extractive industries – fossil fuels or mining. The ideal new chair would be available right now, apply themselves to BP solely – unlike Lund, who also chairs pharma giant Novo Nordisk (NOVOb.CO), opens new tab – and be someone Elliott can work with.
That person could be John Manzoni, who used to run BP's refining operations and now chairs the board at Johnnie Walker maker Diageo (DGE.L), opens new tab. It could also be former Anglo American (AAL.L), opens new tab CEO Mark Cutifani, now chair at Vale's base metals unit. Given BP's strategic troubles, Cutifani would bring a valuable outsider's perspective.
Yet Ken MacKenzie would offer that too, and more. The 61-year-old, who retired as BHP's (BHP.AX), opens new tab chair in March, had Elliott's blessing, opens new tab on taking up his position at the $123 billion mining giant in 2017 after a decent record as CEO at packaging firm Amcor. During his tenure BHP's returns bested rival Rio Tinto (RIO.AX), opens new tab and the group largely followed through on the activist's main demands, including selling its U.S. shale assets – coincidentally, to BP – and dissolving a dual listing structure.
The Canadian-Australian would have to be tempted to relocate to London from Melbourne. Yet his near-namesake Andrew Mackenzie, who served as BHP CEO during his tenure, has repositioned BP's crosstown rival Shell (SHEL.L), opens new tab with some success. Investors would likely greet a Ken MacKenzie-chaired BP positively, giving confidence that it could complete Elliott's requirements for disposals of non-core assets and more aggressive cost cuts.
A new chair is only half the revamp challenge, though. BP may also need a CEO who knows the company but isn't implicated in its recent missteps. One appealing candidate is Rolls-Royce (RR.L), opens new tab Chief Executive Tufan Erginbilgic, a two-decade veteran in the fuels, lubricants and petrochemicals segment of BP before his exit in 2020. Since announcing his appointment in July 2022, $91 billion Rolls' shares have risen tenfold.
Erginbilgic is already 65, and may not want to check out of a winning situation. But BP is a similar turnaround challenge to Rolls. A company run by Erginbilgic, and overseen by MacKenzie, would at least give investors greater confidence a revamp is possible.
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CONTEXT NEWS
Ken MacKenzie retired on March 31 after eight years as BHP chair. According to the UK Corporate Governance Code, the recommended tenure limit for a chair is nine years.
During MacKenzie's time as chair, BHP's total shareholder returns grew 22% a year on a compounded basis, BHP said.
MacKenzie didn't respond to a request from Reuters Breakingviews to comment.
BP told Breakingviews the process to name a new chair was moving at pace, led by senior independent director Amanda Blanc. It added the company recognised that it was in everyone's interest that an appointment was made as swiftly as possible, without compromising the rigour of the process.