BP is facing fresh pressure from a pro-oil hedge fund just as MPs push the company to restore its green pledges.
Elliott, a major BP shareholder, is calling on the FTSE 100 giant to ramp up its cost-cutting plan to free up billions of extra cash for shareholders.
The pressure comes after BP yielded to Elliott’s earlier demands to cut back on renewable energy projects and focus on more profitable oil and gas.
At the same time, MPs on the business and trade select committee on Tuesday criticised BP’s lack of commitment to Britain’s net zero targets, with one saying the oil major was “shifting into reverse” on green issues.
The twin demands highlights the intense pressure on BP as it struggles to navigate the shift to net zero.
During a parliamentary hearing on Tuesday, Liam Byrne, the committee chairman, criticised the oil giant for cutting some of its climate pledges,
“Once upon a time BP seemed to be leading green Britain and now it’s lagging green Britain,” he said. “The Government is trying to reduce emissions – and it doesn’t seem like BP is with the project.”
Louise Kingham, BP’s head of UK, disputed claims that the company was rolling back on its green pledges.
She said the group had tried to “rebalance the rate we are producing oil and gas against investing in the low carbon transition” and said the company was still cutting emissions.
The criticism follows a “reset” of BP’s strategy outlined by Murray Auchincloss, its chief executive, in February that involved halting all its investment into renewable energy and plans to sell many of its green assets.
It marked a sharp departure from the company’s 2020 strategy, where BP ramped up investment in solar and wind, and pledged to reduce oil and gas production significantly.
The about-turn came after pressure from Elliott, a New York hedge fund. However, the investor has now indicated that the reset has fallen short of expectations.
Elliott wants BP to make an additional $5bn (£3.8bn) of cost savings beyond its current plans to save $4bn to $5bn by the end of 2027.
This would allow BP to free up $20bn in annual free cash flow by 2027, 40pc more than it outlined in its February plan. The company could return billions more to shareholders through dividends and share buybacks.
Elliott also believes there should be wider changes in BP’s management aside from the planned departure of chairman Helge Lund, a source told the Financial Times, which first reported on the demands.
Filings on Tuesday showed that Elliott owns more than 5pc of BP, making the hedge fund one of the company’s largest shareholders.
