The chief executive of BP has defended its tumbling profits as the board braces for a campaign by an activist investor to overhaul the troubled oil company.
Murray Auchincloss reported a sharp slump in BP’s annual profits to $8.9bn (£7.9bn) last year from almost $14bn in 2023, just days after it emerged that the activist hedge fund Elliott Investment Management has taken aim at the oil major by building a stake in the company.
The New York-based investor is expected to use its grip on the company to demand sweeping changes to BP which could include ousting the BP chair Helge Lund and a boardroom cull, or a break-up of the 120-year-old company.
The advance of Elliott, which was first reported by Bloomberg, has come amid growing concerns that BP could become a takeover target after a series of disappointing financial results and uncertainty over its green energy strategy.
Auchincloss used BP’s annual financial results to argue that BP had “laid the foundations for growth” by “reshaping” its energy portfolio in 2024, and would now “fundamentally reset our strategy and drive further improvements in performance”.
The company’s profits have fallen steadily since global oil and gas prices reached historic highs in 2022 after Russia’s invasion of Ukraine. Its earnings fell to $1.17bn for the final quarter of 2024, its lowest quarterly profit in four years and less than half the almost $3bn it reported for the same quarter the year before.
Auchincloss is on a mission to correct the company’s course by finding $2bn in cost savings across the business and reducing BP’s net debt. He set out plans last month to cut thousands of jobs from BP’s global workforce, amounting to 5% of its staff, and is expected to unveil a new strategy at BP’s investor day later this month.
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The company has fallen from favour among many big investors in recent years since its previous chief executive, Bernard Looney, set a plan for BP to become a net zero energy company by slashing its oil and gas production by the end of the decade in favour of spending billions on renewable energy projects.
