BP's Green Energy Leader Resigns as Company's Profits Decrease: Activist Investor Elliott Secures Another Dismissal
A Change of Gears at BP: Elliott Management Stirs the Pot
BP's top brass is in turmoil after the infamous activist investor, Elliott Management, demanded a shakeup. Yesterday, BP announced that the architect of their failed renewable push, Giulia Chierchia, will indeed step down. The company's chairman, Helge Lund, is also planning to exit next year, adding to the chaos.
Elliott, the feared U.S. hedge fund that forces change at the companies they invest in, upped their stake in BP to over 5%, placing them between major shareholders like BlackRock and Vanguard. Elliott's relentless pressure led to the ousting of Chierchia, who had actively driven the company's green agenda.
Chierchia took up her role under former chief executive Bernard Looney, who was sacked in 2023 due to partners' complaints of inappropriate relationships.
BP's first-quarter results unveiled a dismal picture: profits plummeted by nearly half, tumbling from £2.01 billion to £1.03 billion, much lower than the expected £1.1 billion. Shares slumped by 2.4%.
Elliott wasted no time in demanding heads to roll following the disappointing results. The company's focus on renewables was abandoned in February, in a 'fundamental reset' led by BP's new boss, Murray Auchincloss. However, that change was not enough to satisfy Elliott.
The turbulent oil market, rocked by the return of Donald Trump to the White House and his subsequent tariff threats, could derail Auchincloss' strategy. BP's plan is based on an oil price of around $70 a barrel. Currently, oil trades at $64 a barrel.
BP acknowledged the impact of the weak oil price, reporting lower cash flow, a near £3 billion increase in net debt, and a reduced share buyback program. Yet, Auchincloss remains optimistic, emphasizing the company's progress in the first three months of the year.
Despite the shakeup, Elliott's influence may not be short-lived. The company's stake in BP gives them significant sway over strategic decisions at the energy giant. Some investors have expressed concerns about the course of action and how it has been handled, leaving a question mark over BP's future trajectory.
Sources1. BP Rethinks Climate Goals After Activist Investor Elliott Raises Stake2. Elliott Management discloses more than 5% stake in BP, pushes for board changes3. BP Successfully Divests Alaskan Oil Field; Elliott Management Pursues Further Changes
- Elliott Management, known for stirring change in the businesses they invest in, has increased their stake in BP to over 5%, placing them among major shareholders like BlackRock and Vanguard.
- The relentless pressure from Elliott led to the ousting of Giulia Chierchia, who had actively driven BP's green agenda.
- The company's focus on renewables was abandoned, as part of a 'fundamental reset' led by BP's new boss, Murray Auchincloss, but it was not enough to satisfy Elliott.
- The turbulent oil market, influenced by the return of Donald Trump and subsequent tariff threats, could derail Auchincloss' strategy, as BP's plan is based on an oil price of around $70 a barrel.
- Elliott's significant stake in BP gives them a strong influence over strategic decisions at the energy giant, and some investors have expressed concerns about the course of action and how it has been handled, questioning BP's future trajectory in the finance industry, energy business, and sustainability.
