BP to review business strategy amid investor concerns

BP plans a new review of its business strategy amidst investor pressure.

BP prepares for business review to address investor concerns

BP will launch a business and cost review when its new chair, Albert Manifold, arrives in September. This decision comes after a previous strategic plan received mixed reactions from investors. Chief executive Murray Auchincloss indicated they would focus on maximizing shareholder value and conducting a further cost review. The announcement coincided with promising second-quarter results, where BP reported profits of $2.4 billion, exceeding analysts' predictions. In response to fluctuating oil prices, BP aims to enhance its operational efficiency and plans to cut $4 billion to $5 billion in costs by the end of 2027 while increasing its investments in oil and gas production.

The move to restart its business review signifies BP's recognition of the rising pressure from shareholders. Following disappointing results from earlier strategies, leaders are trying to regain investor confidence. This may reflect changing dynamics in the oil market, where aggressive cost management and promising returns are essential. Notably, activist investor Elliott Management has urged more drastic measures, highlighting a growing divide between traditional energy approaches and market expectations.

Highlights

As BP navigates this landscape, its future strategies will be closely scrutinized by investors.