Murray Auchincloss, the chief executive of the wrestling energy giant BP, promised on Tuesday “a fundamental reset” of the company's strategy while reporting disappointing income.
The shift comes after a long period of matte share performance compared to his colleagues in the industry. The share price of BP has grown up in recent months, but the observed weakness and other shortcomings have attracted interest from Elliott Investment Management, a hedge fund that is known for shaking its goals in an attempt to improve the shareholder value.
Mr Auchincloss reserves the details of the shift of BP for a presentation of investors on 26 February, but analysts seem to have little doubt about the direction of it.
BP is likely to reduce the expenditure for energy technologies with low emissions such as wind and hydrogen and try to stimulate oil and natural gas production, analysts say. “We would expect that there will be major changes in capital assignment, in particular around lower spending in the low -carbon arena,” wrote Alastair Syme, an analyst at Citigroup, on Tuesday in a note to customers.
Mr Auchincloss appears on his way to a large reversal of the course that his predecessor, Bernard Looney, who left the company in 2023 after not disclosing personal relationships with colleagues.
At the start of this decade, when oil prices were low and governments dronged companies to reduce emissions, Mr Looney invested aggressively in green technologies such as offshore wind and threw back on oil and gas.
This strategy looks misleading for investors. The oil and natural gas prices have been restored, renewable energy sources have been bad lately and an administration that is in favor of fossil fuels, has taken over the power in Washington.
“The weak stock price of BP is the result of a much too radical transitional strategy,” wrote Irene Himona, an analyst at the Wall Street research agency Bernstein, in a memorandum.
During a call with analysts on Tuesday, Mr. Auchincloss, a veteran oil -director -noted that he had already begun to put the company on a new path, negotiate a large oil deal in Kirkuk, Iraq and Sputter spensions such as Offshore Wind In Joint Ventures with other companies to reduce financial obligations. “We have fully decorated renewable energy sources,” he said.
BP has long been under fire from investors, who has weighed its shares. Mr Syme thinks that the company is now about 10 percent cheaper than its most important European rivals, Shell and Totaleenergies in France.
Lage Valuation can rely on Elliott, the activist hedge fund that has collected a position in BP, said a person with knowledge of the case who spoke on condition of anonymity because the details were private. The size of Elliot's importance is not yet clear, but activist investors often take small interests and agitize for change with the support of larger shareholders.
Both Elliott and BP refused to comment on the investment of Elliot, which was previously reported by Bloomberg.
BP was added to the pressure and reported bad financial results on Tuesday. The adjusted profit for the fourth quarter fell by around 60 percent compared to a year ago, while the annual profit fell by a third to $ 8.9 billion. The share price of the company, which had risen sharply on Monday after the reports of Elliott's interest fell on Tuesday.
BP moving an aggressive alternative energy investor to an oil and gas player will not be easy. In recent years, BP has relatively less spent on its fossil fuels, say analysts, and will need years to rebuild that investment. “Persistent sub -investment means that there is no quick solution,” wrote Mr Syme.
Michael J. de la Merced contributed reporting.
