BP announces price adjustment, anticipated increase in earnings
BP's profit plunge has caught the attention of the savvy investment firm, Elliott Management. Known for its disruptive tactics, Elliott is reportedly eyeing the oil giant with a plan to boost shareholder value. The CEO, Bernard Looney, hinted at a new game plan to improve returns, acknowledging that while the oil and gas segment is doing well, low-carbon technologies need a serious boost.
Last year saw a 34% drop in BP's profits, diving to $8.9 billion. The company's performance fell short of its competitors, forcing Looney to act swiftly. He announced a massive workforce reduction, slashing 4,000 jobs. BP shares saw a slight dip in London, but hopes of a turnaround following Elliott's involvement sent shares surging earlier that day.
Elliott Management, led by Paul Singer, is famed for pushing companies to reconsider their strategies. It has a history of pushing for corporate restructuring, splitting up businesses, and advocating for value unlocking. Rumors suggest the firm has staked a claim in BP, though the size of this stake remains a secret.
CEO Looney kept mum on the Elliott saga, but Reuters and Bloomberg reported the investment firm's interest. Elliott reportedly wants BP to prioritize actions that enhance shareholder value. Some critics have accused BP of lacking a clear strategy to grow its oil and gas business, so Elliott's involvement adds a sense of urgency.
BP plans to unveil its revised strategy on February 26, likely under the scrutiny of Elliott. BP's CEO, Murray Auchincloss, has been working tirelessly to reassure investors. He's been implementing cost-cutting measures and reshaping the company internally, but his progress has sparked mixed reviews.
In response to the pressure, Auchincloss announced internal reforms such as negotiating access to large crude reserves and spinning off renewable energy assets. He's also overseen massive cost-reduction efforts, including job cuts and the sale of underperforming assets. However, analysts remain skeptical, highlighting Auchincloss' delayed strategy update. A recent medical procedure has added to the pressure, further pushing BP to act.
As the oil giant faces mounting pressure, the involvement of Elliott Management could be a double-edged sword. While the disruptor might push BP to take bold steps to regain market share, it could also lead to a tumultuous period of change. The unveiling of BP's new strategy on February 26 will be a pivotal moment, marking the company's next move in the ever-changing energy market.
Elliott Management, known for its push for corporate restructuring and value unlocking, is reportedly pressuring BP's energy suppliers to prioritize actions that enhance shareholder value. The involvement of Elliott in BP's affairs has added a sense of urgency for the oil giant to develop a clear strategy to grow its oil and gas business.