BP shares climbed over 7% during early trading on Monday following reports that activist hedge fund Elliott Management has taken a significant stake in the British oil giant.
While the exact size of the stake remains undisclosed, the development has sparked speculation about potential strategic changes at BP. Both the company and Elliott Management have declined to comment on the reports.
BP shares were up 7.04% at 8:57 a.m. London time, marking a sharp rise after a challenging period for the energy major. The company has underperformed its peers over the past year, with its stock declining compared to significant gains for rivals like Shell and TotalEnergies.
Market observers believe Elliott’s involvement could place pressure on BP to adjust its strategic direction, possibly shifting back to a stronger focus on its core oil and gas business while reducing its renewable energy commitments.
The company has faced numerous hurdles, including the loss of key market opportunities, higher corporate costs, and declining refining margins. Last month, BP issued a trading update warning of weaker fourth-quarter results and announced plans to cut 4,700 roles as part of CEO Murray Auchincloss’s efforts to achieve $2 billion in cash savings by 2026.
Auchincloss, who became CEO in January 2024, has signaled a gradual pivot away from BP’s previous aggressive renewable energy strategy. The company has already spun off its offshore wind business into a joint venture and is exploring the sale of certain renewable assets in the US.
Led by Paul Singer, Elliott Management is known for its activist campaigns at major corporations, often pushing for changes that enhance shareholder value. The hedge fund has a history of advocating for strategic shifts, corporate breakups, and leadership changes.
Analysts suggest that Elliott’s involvement at BP could lead to a deeper focus on its traditional oil and gas operations and possibly a review of its clean energy investments. Some market experts speculate that Elliott may push for the divestment of certain units, including BP’s US shale or lubricants businesses.
BP is set to release its fourth-quarter financial results on Tuesday, with a broader strategic update planned for February 26. The update is seen as a crucial moment for CEO Auchincloss, who has been under pressure to stabilize the company’s finances and restore investor confidence.
With input from CNBC, Market Watch, and Bloomberg.
