Richard Parks BP was once worth over £140 billion, but now its market value is nearly 25% lower. The company is now worth less than half of its peak, falling behind European and US competitors that are posting record profits. To regain investor confidence and reduce its rising debt, BP plans to cut 5% of its global workforce, aiming to save billions.
Analysts warn that BP’s decreased value has made it a target for acquisition by stronger competitors. Reports say that Elliott Investment Management, an activist investor, has bought a significant share, sparking further speculation about BP’s future.
Capital Markets Day: Key Strategic Decisions
CEO Murray Auchincloss is set to reveal BP’s strategy at the upcoming Capital Markets Day in London. Investors expect BP to scale back its 2030 goals for reducing oil and gas production. Investments in renewable energy, such as electric vehicle charging and bioenergy, could also be cut, with spending possibly dropping from $6-9 billion to $5 billion.
To improve its financial standing, BP might sell valuable assets, including US wind farms and Dutch fuel stations. These sales could raise up to $8 billion, providing much-needed cash.
Turning Point: Transformation or Acquisition?
BP may find that focusing on oil and gas production is not enough, especially as global oil demand is expected to peak in the 2030s. Kim Fustier of HSBC stresses that BP must adopt a bold, transformative strategy to regain investor trust. “BP needs a full overhaul of its capital allocation and priorities,” she says.
Whether BP can avoid a takeover is uncertain. A decisive shift in strategy could stabilize the company, or it may position BP for better terms if it is sold.