Activist US investor Elliott Management has become BP’s third-largest shareholder in move that could provide it with leverage to influence the oil major to cut spending on renewables.
Elliott Management has built an almost 5% stake worth just under £3.8bn, as it seeks to force BP to “cut spending on renewable energy and make big divestments”, according to an FT.com news report.
The position is one of the US hedge fund’s largest and could include shares as well as derivative positions that replicate an economic interest in the stock, giving Elliott leverage to influence strategy.
Since 2020, BP has raised its spending on energy transition businesses from about 3% of its capital expenditure to 30%, or roughly $5bn a year, building a portfolio including wind, solar, biofuels and hydrogen.
This had been a “poor use of capital” and BP should “limit its future spending on renewables and sell off a wide swath of assets”, according to an unnamed source referred to in the FT.com report.