Release date: 30 January 2020
During his decade at the helm of BP, Dudley mounted one of the greatest turnarounds in corporate history, brought the company through an era-defining oil price downturn, and made a major contribution to the energy transition.
Each of those tasks alone would be a considerable achievement. Dudley accomplished all three, and all with characteristic calmness under pressure.
His ascent to the top job at BP was sudden. In 2009, he had returned from Russia to play a roving ambassadorial role for BP.
Then, in April 2010, BP was engulfed by the Deepwater Horizon accident and its aftermath. Dudley flew to Houston to help, and was put in charge of the response on the ground. For everyone involved, the accident was a tragedy, but, for Dudley, it was also personal. He had grown up in Mississippi, fishing the Gulf Coast; these were the same waters he had sailed as a boy.
The leaking oil well was capped three months later and then permanently sealed, in an immensely complex feat of engineering.
But for Dudley, there was more to do. With only a few weeks’ notice, he went from leading the response to leading the company, taking over as chief executive after Tony Hayward stepped down.
His first tasks included verifying the safety of BP’s operations worldwide, restoring the environment of the Gulf Coast, and securing the company’s finances.
Addressing the media in Biloxi, Mississippi, in July 2010 following the Deepwater Horizon accident
On the podium with National Incident Commander Admiral Thad Allen, at the Southern Governors' Association conference in August 2010
Pictured with BPTT regional president Norman Christie during a visit to Atlantic LNG in 2015
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.
With Reliance Industries chairman Mukesh Ambani following signing of the BP Reliance deal in 2011
With former BP CEO Lord Browne at BP's Advancing the Energy Transition launch in 2018
With ADNOC CEO, Dr Sultan Ahmed Al Jaber (middle) and Sheikh Mohammed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi in 2018
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.
Chairing the OGCI conference in London in 2018
Bob Dudley, on delivering 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.
With BP chief scientist Dame Angela Strank at an AGM reception in 2018
Receiving his 2018 Petroleum Executive of the Year award at a gala in London
The energy transition is far from complete. It represents both the greatest challenge and the greatest opportunity of BP’s future. Yet the reason BP has a future, and one it views with optimism, is in large part because of what Dudley achieved with an unwavering belief in the company and the difference that energy can make for people and the world.
Dudley took the helm in the aftermath of a devastating accident, yet his final year was BP’s safest-ever on a like-for-like basis. He leaves BP a different company, and his successor, Bernard Looney, a firm base from which to build.
The announcement that Bernard Looney will succeed Bob in February 2020
Bob Dudley is born on a New York naval base. He goes on to spend his early years sailing the Gulf Coast and later excels as a Chicago high school swimming champion.
Graduates from the University of Illinois with a Bachelor of Science in Chemical Engineering. He then gains a Master of International Management at the Thunderbird School of Global Management in Phoenix, Arizona, and an MBA from Southern Methodist University in Texas.
1979: a fresh-faced Bob, centre, and friends at his MBA graduation at SMU in Texas
Dudley joins BP heritage company Amoco in the US. On his first day, he must wade through demonstrators shouting: “Stop big oil!” in protest at huge gas price hikes sparked by the OPEC crisis.
As a young engineer, Dudley accepts assignments in Aberdeen ̶ a city he describes as “the real heartland of offshore engineering”. Postings in China and Russia follow.
BP acquires Amoco. In the merger, Dudley is made executive assistant to BP CEO John Browne. Later, Dudley leads BP’s ground-breaking renewables business.
Dudley heads back to Moscow to lead BP’s new joint venture in Russia, TNK-BP. Tensions around the business force Dudley to flee the country only to return when Rosneft acquires TNK-BP. Differences settled, Dudley accepts a seat on the Rosneft board on behalf of BP.
2004: visiting Rosneft's giant Samotlor oilfield in western Siberia
Dudley takes a roving ambassadorial role for BP. Internally, he attracts the nickname ‘BP’s foreign secretary’.
With the clean-up from the Deepwater Horizon accident under way, Dudley succeeds Tony Hayward as chief executive.