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Activist investor Bluebell Capital Partners called on BP (NYSE:BP) to dump its commitment to cut oil and gas production, saying the company’s shift away from fossil fuels is misguided and weighing on the stock price, Financial Times reported Monday.
Bluebell wrote to BP (BP) Chair Helge Lund in October and reiterated in recent days that the company’s pledge to reduce oil and gas output by 25% by 2030 from 2019 levels means it is destroying shareholder value by moving away from hydrocarbons faster than society, according to the report.
BP’s (BP) stock price has lagged rivals Shell, TotalEnergies, Exxon and Chevron in terms of total returns to shareholders over the past four years.
The company should cut spending in bioenergy, hydrogen and renewables to 2030 by $28B, or ~60%, which could be achieved mostly by stopping all investment in renewables, Bluebell said.
BP’s (BP) stock is worth at least 50% more than current prices, and the discount is mostly due to the company strategy of reducing oil and gas output, while “rapidly promoting a risky diversification into sectors with lower targeted returns and where BP has ‘no right to win’ on the other.”
CEO Murray Auchincloss, who was confirmed in the role earlier this month, has said he is committed to the strategy.
The hedge fund has not disclosed the size of its investment in BP (BP).
