Lord Browne of Madingley, the chief executive of BP, is to retire 18 months early from the helm of the world's third biggest oil company.
He will be succeeded by Tony Hayward, the head of BP's exploration and production division and long regarded as Lord Browne's heir apparent.
The surprise announcement, made late yesterday afternoon after a BP board meeting, marks a watershed in one of the most glittering business careers of the last half century - albeit one tarnished in the last two years by a succession of blunders which served to undermine both Lord Browne's reputation and the company's share price.
Lord Browne, 58, had been due to retire at the end of 2008 - a compromise date reached only after an unseemly and highly public boardroom row last July with his chairman Peter Sutherland, who opposed his chief executive's desire to remain at the helm for a longer period.
In the event, BP announced yesterday that Lord Browne will leave at the end of June this year. This will deprive him of the honour of leading the company through what will be its centenary year in 2008. After a career with BP spanning 41 years, he is in line for a £14m pay-off in addition to a pension pot worth £20m.
BP insisted that Lord Browne's decision to retire early was his and his alone and had not been the result of any boardroom coup or investor unrest. But it is clear in retrospect that last summer's bruising encounter with Mr Sutherland seriously harmed Lord Browne's authority within the company and unnerved shareholders, who had grown accustomed to BP's invincibility and its chief executive's apparently infallible track record - one that earned him the sobriquet of the "Sun King".
BP has also had to contend with a series of environmental, safety and production setbacks in the last two years which have resulted in its shares being the worst performing in the oil sector. Late last year Lord Browne only narrowly escaped having to give testimony in person in a US court over the fatal explosion in 2005 at its Texas City refinery, which resulted in 16 deaths. BP's reputation for environmental responsibility and high ethical standards was also dented by a pipeline leak in its Prudhoe Bay field in Canada and revelations that it has sought to rig the US propane market. On top of that, BP's oil production has been in reverse now for six straight quarters.
Paying tribute to his chief executive, Mr Sutherland said: "John Browne is the greatest British businessman of his generation and has transformed BP into one of the biggest energy groups in the world. His performance over the last 12 years has been extraordinary. His vision, intellect, leadership and skill have been a wonder to behold and he will be a difficult act to follow."
He added that Lord Browne had decided it would be in the company's interests to name his successor now to ensure an orderly succession, even though he was not due to leave for another two years. "Having made that decision, which the board fully supports, we came to the conclusion that a six-month handover would be more appropriate than 18 months."
Lord Browne said it had been "a privilege to have had the opportunity to turn BP into an energy company at the forefront of the energy industry".
Mr Hayward, 50, joined BP in 1982 and is a geologist by training. He also sits on the board of the steel maker Corus, which is the subject of a two-way bid battle between Tata of India and CSN of Brazil. His elevation to chief executive raises questions over the future of the other internal candidates - the company's head of refining and marketing John Manzoni, executive director Iain Conn, and Robert Dudley, the chief executive of the group's Russian joint venture TNK-BP.
Although he is leaving BP, Lord Browne has made it clear he is not about to stop work. Last July, when BP announced that Lord Browne would quit at the end of 2008, he said: "I don't believe in retirement. It is an idea invented by Bismarck and it is a touch out of date. It is a long time since he died and things have moved on. I am going to leave BP but I am not retiring. I am changing jobs."
He is not expected to be short of job offers and colleagues said the chairmanship of a FTSE 100 company would be his for the taking if his chose to take that route.
He will be best remembered at BP for two daring and transformational deals in the late 1990s - the takeovers of the American oil giants Amoco and Atlantic Richfield - and BP's move into Russia four years ago through the TNK tie-up.
* June 1995: Lord Browne is appointed chief executive at BP, having joined as a university apprentice in 1966
* 1996: British Petroleum in $52bn merger with Amoco
* 1999: The new oil major buys Atlantic Richfield for $26.8bn
* 2000: BP Amoco acquires Burmah Castrol for $4.7bn
* 2003: BP and Russian conglomerate Alfa combine their Russian oil assets to create TNK-BP
* March 2005: Explosion at BP's Texas City oil refinery kills 15
* March 2006: Oil spill from BP pipeline at Prudhoe Bay, Alaska
* June 2006: US energy regulator files lawsuit accusing BP of unlawfully trying to manipulate a portion of the American propane market
* July 2006: Lord Browne wins a 10-month extension to his term until December 2008
* Twelve wells in Prudhoe Bay, Alaska are shut down after leaks
* August 2006: It emerges BP is being investigated for possible manipulation of the crude oil and unleaded gasoline markets. More wells are shut down in Prudhoe Bay, Alaska.
* October 2006: Interim report by US Chemical Safety Board into the Texas City refinery explosion accuses BP of ignoring "catastrophic safety risks" and of knowing about "significant safety problems" at another 34 facilities around the world
* December 2006: BP reveals it is facing a civil enforcement action brought by the US Commodity Futures Trading Commission over its trading of unleaded gasoline futures contracts in October 2002
* January 12 2007: Lord Browne announces he will retire at the end of June and will be replaced by Tony HaywardReuse content