Oil giant BP is at an uncomfortable crossroads
Shareholders, politicians, and environmentalists want BP to reverse its climate U-turn; an activist investor doesn’t think it’s gone far enough.
More than 115 years on from when it was founded as the Anglo-Persian Oil Company, UK oil giant BP is currently caught between a rock and a hard place.
On one hand, there’s Elliott Investment Management, an American hedge fund that’s already pressured BP into giving up some of its green ambitions and is apparently looking to push the company further to boost free cash flow. On the other, there are UK politicians urging it to rethink its new direction and questioning its commitment to national climate goals — as well as disgruntled shareholders who staged the biggest protest vote in five years at a FTSE 100 company’s annual general meeting last Thursday.
A little less conversation
While the issues now seem to be coming to a head in full public view, with increasing media attention on the £58 billion (~$77 billion) oil business’s green dichotomy, BP was already touting its eco credentials a little more quietly in 2024 than it had in years before.
Though infamous British environmentalist group Just Stop Oil’s recent announcement that it will disband at the end of April means one less thing for BP’s top brass to worry about, its eco decisions in recent months have seen the company come under fire more broadly. Its move last October, for example, to scrap market-leading plans to reduce oil and gas output by as much as 40% by 2030 — combined with its U-turn on renewable generation in February — contributed to almost 25% of investors voting against reelecting the company’s current chair at last week’s meeting.
However, shares in the company formerly known as British Petroleum are actually up after Elliott, the activist investor hedge fund at the heart of some of the drama, revealed it had built a bigger stake in the oil giant on Tuesday. Shares are up ~6% in the last five days.
