Dudley will be replaced by Bernard Looney, a BP lifer who currently runs the company’s upstream business that finds and taps oil wells.
Announcement of the succession comes after Dudley fuelled speculation about his imminent retirement earlier this week. The 64-year-old told reporters at an energy conference in Russia that he had always planned to retire when he was 65.
Dudley, who has been at BP for 40 years, said on Friday it was a “the privilege of a lifetime” to lead the company. He was promoted to the top job in 2010 after leading the oil giant’s recovery efforts from the Deepwater Horizon spill in the Gulf of Mexico. Lund said Dudley led the company through “probably the most challenging time in BP’s history.”
“I am enormously proud of all the things we have achieved together to provide energy for the world,” Dudley said in a statement. “Bernard is a terrific choice to lead the company next.”
Irishman Looney joined BP as a drilling engineer in 1991 and has worked his way up to lead one of the company’s biggest divisions. He currently oversees 17,000 people operating in almost 30 countries. His division produces the equivalent of around 2.6 million barrels of oil and gas a day.
“I am humbled by the responsibility that is being entrusted to me by the Board and am truly excited about both the role and BP’s future,” Looney said.
“Our company has amazing people, tremendous assets, and a set of core values that guide our actions, but most of all we have a desire to be better. I look forward to tapping into that desire and building on the strong foundation that Bob has built as we meet society’s demand for cleaner, better energy.”
BP chairman Helge Lund said: “Bernard has all the right qualities to lead us through this transformational era. He has deep experience in the energy sector, has risen through the ranks of BP, and has consistently delivered strong safety, operational and financial performance.
“He is an authentic, progressive leader, with a passion for purpose and people and a clear sense of what BP must do to thrive through the energy transition.”
Michael Hewson, chief market analyst at CMC Markets, said Dudley successfully steered “BP through some very difficult political waters” but Looney “still faces enormous challenges”. He cited the company’s high carbon footprint, the global shift towards greener energy sources, and BP’s “uncomfortably high debt levels.”
BP said Looney was chosen after “a comprehensive and deliberate search process, including consideration of a range of internal and external candidates.”
Looney will be paid £1.3m, plus a possible bonus and cash payments in lieu of pension worth up to 15% of his salary.