BP’s stock soared on Monday on the London Stock Exchange, climbing 6.35% to 460.75 pence by 09:30 GMT. The increase follows a report from Bloomberg revealing that Elliott Investment Management has taken a significant stake in the British energy giant. Neither BP nor Elliott has commented on the matter so far.
Increased pressure on BP’s strategy
The American activist fund Elliott is known for its interventionist approach in companies where it invests, often pushing for structural or strategic reforms. This stake acquisition comes as BP has recently announced a shift back to its traditional operations, significantly reducing its investments in renewable energy.
The oil major faced a challenging 2024, with earnings falling short of expectations and a sharp decline in profits over the first three quarters. To enhance competitiveness, BP launched a cost-cutting program that included 4,700 internal job cuts and 3,000 reductions among subcontractors.
Favorable market dynamics
BP’s stock performance has lagged behind its competitors, particularly in the U.S. The arrival of an activist investor of Elliott’s stature could influence the company’s future strategy, similar to its past interventions in other energy firms.
Other activist funds, such as Bluebell, have previously urged BP to reconsider its renewable energy ambitions. However, Elliott has a stronger track record of enforcing changes within targeted companies. These factors fuel speculation that BP may further accelerate its refocus on traditional oil and gas operations.
