BP is a victim of wishful thinking on fossil fuels.

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Donald Trump’s inaugural speech as US president this week included praise for fossil fuels and “liquid gold beneath our feet”. Although BP has large oil and gas operations and reserves in Texas and the Gulf of Mexico (or the US), you have to dig deep to find gold in its finances.

The UK company now trails the other big investor energy multinationals in market value: not just a sixth of ExxonMobil’s value, but less than half that of old Anglo-Dutch rival Shell. It announced last week that it was cutting 4,700 jobs in a renewed effort to become a “leaner, more focused and high-value company.”

But BP has made many statements about the future over the years and has a disappointing record. It has also gone through a handful of CEOs, most recently Murray Auchincloss, who had to postpone a long-awaited strategy update to investors next month as he recovers from a medical procedure.

Auchincloss replaces Bernard Lone, who was sacked in 2023, citing abuse over past relationships with colleagues. “It’s almost Shakespearean. This company is star-crossed,” reflects a BP veteran. It has indeed experienced a series of tragedies as it tries to appease investors and respond to climate change.

Worst of all was the 2010 Deepwater Horizon oil spill, which killed 11 workers, polluted the Gulf of Mexico and forced it to sell its assets for a $65 billion bill. The company has taken a long time to recover and arguably never has: it still has $24 billion in net debt and last year approved only a sixth platform in the Gulf, a field it first acquired in 2006.

Then came Looney’s five-year pledge to cut BP oil and gas production by 40 percent by 2030 and “reimagine energy for people and the planet.” This was bolder in its rhetoric than its substance, and BP has been moving away from it ever since, as high interest rates have shown it can afford to build wind farms cheaply.

Quaker In 2022, Vladimir Putin invaded Ukraine, forcing BP to divest its minority stake in Russian oil company Rosneft at a cost of $25 billion. In the year He was eventually fired in the mid-2000s for making large sums of money from TNK-BP, working in partnership with a group of oligarchs. Like others, Russia took it in stride.

But companies make their own fortunes, and BP can’t simply say they’re lucky. The thread that runs through his recent story is ambition and purpose that exceed his ability to execute plans. While ExxonMobil remains on par with the world, BP is vulnerable to ambition.

This goes to Lord John Brown, who transformed the company as CEO by acquiring Amoco and Arco in the US and striking the TNK-BP deal. He also brought intellectual rigor to strategy, including the thinly-veiled idea that BP would go “beyond oil.” The slogan didn’t last but the legacy is that every BP leader needs a vision.

BP is not a cowboy outfit. Despite the Deepwater Horizon delay, its operations are generally well-managed, and it takes compliance seriously. But he has more intelligence than instinct (“There’s a lot of smart people out there,” says an observer, not entirely meant as a compliment). Another calls it “more like a government than a business,” lacking the powerful profit motive of its competitors.

The 2016 Paris Agreement was driven in part by social and governmental pressure to limit global warming and pledges to release carbon. It also hopes to attract investment from ESG funds and benefit from the financial transition. But that failed and he didn’t react as quickly as Shell by changing direction. It was plagued by poor financial results, executive dysfunction and a lack of strategic decision-making.

BP now faces a world where Trump is telling oil companies to “drill, drill, drill” and pull the US out of the Paris accord. Meanwhile, Greenpeace has been accused of greenwashing for not decarbonizing fast enough. If the past few years have proven anything, it’s that it’s impossible to please both parties, especially for an energy company headquartered outside the US.

Three months before Deepwater Horizon, BP’s market value briefly surpassed that of Shale but now lags far behind. There will be many bankers asking if they can fix or take the merger. If BP is to remain independent, it needs to show investors that it can get things done rather than looking ahead. There is such a thing as being too smart.

john.gapper@ft.com