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BP to Overhaul Strategy Following Profit Decline and Investor Pressure

The oil giant plans a strategic reset, with reduced renewables focus and potential asset sales, as activist investor Elliott Management takes a stake.

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Analysts believe that Elliott could push for increased spending on oil and gas
BP’s shares have underperformed its more oil-focused rivals as its green investments have struggled to deliver promised high returns
FILE - A logo of BP at a gas station in London, on Nov. 1, 2022. (AP Photo/Kin Cheung, File)

Overview

  • BP reported a 36% drop in annual profits for 2024, with fourth-quarter earnings falling 61% year-on-year, attributed to stagnant oil prices and weak refining margins.
  • CEO Murray Auchincloss announced plans to 'fundamentally reset' BP's strategy, focusing on improving cash flow and performance, with details to be revealed on February 26.
  • BP's shift includes scaling back renewable energy investments, spinning off its offshore wind business, and potentially abandoning earlier oil production reduction targets for 2030.
  • Activist investor Elliott Management has acquired an undisclosed stake in BP, raising expectations for strategic changes, including possible asset sales or a board reshuffle.
  • Analysts warn BP's underperformance compared to rivals and strategic uncertainty could make it vulnerable to a takeover or further investor agitation.