Sources say that Elliott met with BP investors in order to discuss further changes.
Two shareholders have confirmed that Elliott Management, an activist investor in BP, has met with several of the company's largest shareholders to form a consensus on more changes. These could include cost reductions and a possible leadership reshuffle.
BP's stock has performed worse than rivals Shell, Exxon and Shell in the past five years. Investors have blamed this in part on 2020 plan of the company to focus on its renewable business and cut oil and gas production.
After watering down this plan, BP accelerated the pivot back to hydrocarbons with a new strategy last month.
Elliott and the two shareholders who attended separate meetings said they both wanted deeper changes. Elliott declined to make any comments. A source told us that it has a stake of about 5% in BP.
A BP spokesperson stated that since February 26, the company announced its new strategy, executives have met with investors who hold nearly half of its shares and approximately 75% of institutional shareholders.
The spokesperson stated that "we have received widespread support" for BP's new strategy and the proposed changes. "The message that has been received consistently is to focus on delivering - executing our strategy and hitting targets. This is our top priority."
After Elliott, which led campaigns to change at companies such as Marathon Petroleum, Hess, and Honeywell became one of BP's biggest shareholders, pressure for reform increased.
The two shareholders reported that Elliott and investors had discussed possible changes to BP’s board of directors and management team as well as a reduction in annual spending below $13 billion.
BP's current goal is to cut costs by 4-5 billion dollars and spend between $13-15 billion per year.
One shareholder said BP should be more aggressive in its asset sales.
A person with knowledge of the situation stated that Elliott wanted BP to sell a large part of its network of petrol stations and ultimately completely abandon renewable energy generation.
BP informed investors that it would sell $20 billion worth of assets by the year 2027. The company announced that it would increase its oil and gas expenditure, reduce investments in renewables and reduce net debt from $23 billion to between $14 and 18 billion by 2027.
At the AGM of BP on April 17, shareholders will vote to reelect the board, which includes chairman HelgeLund and CEO Murray Auchincloss. Sarah McFarlane, Shadia Nasralla and Shadia Nasralla contributed to this report. Anousha Sakoui, Mark Potter and Anousha Saoui edited the report.
(source: Reuters)
