BP's new chair appointment revives talk of US listing

BP's appointment of Albert Manifold, who successfully oversaw CRH's primary listing shift to New York, as its new chair has reignited speculation regarding a potential US listing for the oil major. While BP CEO Murray Auchincloss previously dismissed the idea, UBS suggests Manifold's arrival could prompt a re-evaluation, despite potential significant costs and BP's lower US earnings contribution compared to CRH's precedent. The company also strengthened its board with additional oil and gas expertise, though shares remained flat and UBS maintains a 'neutral' rating.

Analysis

BP's appointment of Albert Manifold as its next chair has reintroduced the possibility of a US primary listing, a topic previously dismissed by CEO Murray Auchincloss. Manifold's credibility stems from his tenure as CEO of CRH, where he oversaw a successful relisting from London to New York in 2023, which was followed by a share price increase of over 60%. However, the strategic parallel is imperfect; while CRH derived 75% of its earnings from the US, BP's US earnings contribution is significantly lower at approximately 30%, which, as noted by UBS, presents a weaker case for a costly and disruptive move. The market reaction has been muted, with the share price remaining flat, suggesting investors are not yet pricing in this potential catalyst. This sentiment is echoed by UBS's 'neutral' rating and a 375p price target, which underscore ongoing fundamental challenges for BP, including debt reduction and reserve replenishment. The recent additions of David Hager and Simon Henry to the board, alongside Manifold, also signal a reinforcement of oil and gas expertise at the highest level, which could presage a broader strategic review.

Key Decisions for Investors

• Investors should monitor for any shift in management's commentary regarding a US listing, as confirmation could act as a significant, though currently speculative, catalyst for the stock.
• Given the 'neutral' rating from UBS and its price target below the current market price, a cautious stance is warranted until there is clarity on how the new board will address fundamental challenges like debt and reserve replenishment.
• Consider the appointment of a new chair with a strong shareholder return track record as a potential long-term positive, but weigh it against the substantial operational and financial hurdles a US relisting would entail for BP compared to the CRH precedent.