BP Plc shares surged the most since 2020 after one of the world’s most aggressive activist investors built a stake in the company, seeking to end years of under-performance by pushing for significant change.
Mitchell Ferman, Dinesh Nair, and Aaron KirchfeldStorage tanks in the BP Plc refinery at the Port of Rotterdam in Rotterdam, Netherlands, on Tuesday, March 8, 2022. Europe 's biggest port is where the sharp end of sanctions against Russia looks likely to hurt the Netherlands, even if the nation's economic statistics might suggest otherwise. --
Elliott’s intervention comes after BP stumbled through a series of missteps over the past 15 years, from the Deepwater Horizon disaster to former Chief Executive Officer Bernard Looney’s sudden dismissal for his personal conduct. Since his faulty bet in 2020 that global oil consumption had peaked and the world was accelerating toward net zero emissions, the company’s valuation has lagged other oil majors.
Representatives for the activist investor declined to comment, and the exact size of its stake couldn’t be immediately learned. But its track record gives an indication of the kind of pressure that might be faced by BP’s current CEO, Murray Auchincloss. Auchincloss is already expected to put greater focus on the core oil and gas business, with less emphasis on renewable energy. But there are many questions about whether BP has the resources to accomplish such a pivot quickly, and whether investors still have patience.
The most obvious split would be between clean energy and fossil fuels, a process that has already partially begun under Auchincloss. He has announced the spin-off of BP’s offshore wind business into a joint venture, and is working to offload onshore wind assets.
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