BP's chief executive, Murray Auchincloss, is experiencing easing pressure following a recovery in the company's share price and a significant oil discovery in Brazil. The company has faced intense scrutiny from activist investor Elliott Management and takeover speculation, with rival Shell being a potential bidder. BP's third-quarter results are expected to show improved production, bolstering confidence in Auchincloss and new chairman Albert Manifold's ability to stabilize the energy giant. However, Auchincloss must still demonstrate cost savings, debt reduction, and continued share buybacks to the new chairman, who has a reputation for focusing on profitability.
The company has undergone significant leadership changes, including the departure of former chief executive Bernard Looney and chairman Helge Lund, who were instrumental in BP's earlier pivot to green energy, a strategy now being reversed. This leadership instability, coupled with the strategic shift and Elliott's demands, fueled takeover rumors, though Shell denied any immediate merger interest. Shell's previous rejection of a joint venture offer for the Brazilian discovery may now be a point of regret, given the find's immense scale, confirmed to be twice its initial estimate and BP's largest in 25 years.
While Elliott Management has temporarily shifted its focus, disagreements persist regarding BP's spending. Auchincloss plans to maintain annual expenditures between £12 billion and £13.7 billion, whereas Elliott advocates for a reduction to £10.7 billion to £11.4 billion. The recent stock price surge and the Brazilian discovery have appeased the activists for now. BP's oil and gas divisions have performed strongly in 2025 with multiple project launches and improved operational efficiency.
However, challenges remain, including the difficulty in achieving asset sales targets due to lower oil prices and a cooling interest in green energy, impacting debt reduction efforts. BP's balance sheet has been strained by past events, including th... download the app to read more
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