By Charles Kennedy - Mar 21, 2025
Elliott Management is discussing further actions with other BP shareholders to improve the company's performance.
These discussions include potential deeper cost reductions and leadership reshuffles.
The focus is on addressing BP's underperformance compared to peers and demanding more significant changes than the company's recent strategy shift.
Elliott Management, the activist investor pushing for changes at BP, has discussed with other large shareholders in the supermajor potential additional moves to boost the company’s performance including more cost reductions and leadership reshuffles, two shareholders have told Reuters.
BP’s stock has been underperforming its UK-based peer, Shell, and other major international oil firms in recent years. The BP board has been under increased pressure to seek fundamental changes to the business to reward shareholders more.
The pressure on BP became more intense earlier this year after Elliott Management bought a stake and demanded changes in strategy. Elliott has accumulated nearly 5% in the supermajor and signaled it would be pushing for changes in strategy, or even for board reshuffles, to address the undervalued shares of the company.
In a major reset back to oil and gas, BP last month said it would increase its investment in upstream oil and gas to $10 billion per year while slashing spending on clean energy by more than $5 billion a year.
In the upstream, BP will aim for 10 new major projects to start up by the end of 2027, and a further 8–10 projects by the end of 2030. Production is also expected to grow, to 2.3–2.5 million barrels of oil equivalent per day (boed) in 2030, with capacity to increase to 2035.
That’s a stark departure from the previous strategy to lower oil and gas output by 2030.
BP will also look to reduce costs and net debt, boosting the target to $4 billion–$5 billion of structural cost reductions by the end of 2027 and targeting $20 billion of new divestments to be announced by the end of 2027.
However, Elliott and other shareholders are seeking even deeper changes and have held meetings to build consensus around additional demands, according to Reuters’ sources.
Shareholders are meeting on April 17 for BP’s annual general meeting, at which they will be asked to vote on the re-election of the board, including chair Helge Lund and chief executive officer Murray Auchincloss.
By Charles Kennedy for Oilprice.com
No comments:
Post a Comment