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Murray Auchincloss says BP’s faith in green energy transition was ‘misplaced’ as it increases oil and gas investment to $10bn a yearBP is under pressure from shareholders, notably Elliott Management, the New York hedge fund. The world’s most prominent activist investor took a near-£4bn stake in the company recently, just under 5% of its shares.Elliott is expected to be pushing for major changes behind the scenes, including a shift back towards fossil fuels to boost profit, a boardroom cull with the chairman, Helge Lund, seen as most vulnerable, and a potential break-up of the company.Having already cut back its energy transition targets in 2023, BP’s subsequent underperformance compared with peers has created pressure for BP management to focus on sustainability of a financial rather than ecological nature. For sustainable investors, this will hardly be the end of the argument.Several of BP’s shareholders decided to vote against the company’s chair the last time BP reduced its commitment to energy transition, after not being offered the opportunity to vote on the company’s adjusted strategy. That’s a possibility again this year, unless the BP decides to table a “say-on-climate” vote at its upcoming AGM as 48 investors have already requested.The refocus on hydrocarbons is positive for BP as is the overall lower spending, which is driven by lower renewable spending. Along with the asset divestitures it should improve the balance sheet and returns. However, there still is little, if any, production growth, and BP’s repurchase rate has been reduced materially. Continue reading…
Murray Auchincloss says BP’s faith in green energy transition was ‘misplaced’ as it increases oil and gas investment to $10bn a year
BP is under pressure from shareholders, notably Elliott Management, the New York hedge fund. The world’s most prominent activist investor took a near-£4bn stake in the company recently, just under 5% of its shares.
Elliott is expected to be pushing for major changes behind the scenes, including a shift back towards fossil fuels to boost profit, a boardroom cull with the chairman, Helge Lund, seen as most vulnerable, and a potential break-up of the company.
Having already cut back its energy transition targets in 2023, BP’s subsequent underperformance compared with peers has created pressure for BP management to focus on sustainability of a financial rather than ecological nature. For sustainable investors, this will hardly be the end of the argument.
Several of BP’s shareholders decided to vote against the company’s chair the last time BP reduced its commitment to energy transition, after not being offered the opportunity to vote on the company’s adjusted strategy. That’s a possibility again this year, unless the BP decides to table a “say-on-climate” vote at its upcoming AGM as 48 investors have already requested.
The refocus on hydrocarbons is positive for BP as is the overall lower spending, which is driven by lower renewable spending. Along with the asset divestitures it should improve the balance sheet and returns. However, there still is little, if any, production growth, and BP’s repurchase rate has been reduced materially.
