BP, once worth over £140 billion, has lost almost 25% of its market value in the past two years. Its current valuation is now less than half of its peak. Meanwhile, European and US competitors are reporting record profits. BP recently announced it will cut 5% of its workforce to save billions and rebuild trust with investors.
Analysts warn that BP’s reduced valuation makes it vulnerable to takeover offers from financially stronger companies. Reports say that Elliott Investment Management, an activist investor, has bought a large stake, sparking takeover speculation.
Capital Markets Day: Critical Decisions Ahead
CEO Murray Auchincloss faces intense pressure to present a bold new strategy at Capital Markets Day in London. Experts believe BP may back away from its ambitious goal to reduce oil and gas production by 2030. Investments in renewable energy projects, like electric vehicle charging and bioenergy, could be cut. Spending might drop from $6-9 billion to around $5 billion.
To improve its finances, BP may consider selling assets like US wind farms or Dutch fuel stations. Analysts estimate that these sales could raise up to $8 billion.
A Crossroads: Renewal or Takeover?
Focusing more on oil and gas might not provide quick results, especially with global oil demand expected to peak in the 2030s. Kim Fustier from HSBC says BP needs a major strategy shift to regain investor confidence. “A fundamental rethink of capital allocation and priorities is crucial,” she says.
It remains uncertain if these efforts will stop a takeover. A clear strategic change could help BP stabilize or get better terms in case of a sale.