BP is at the centre of a growing battle between activist hedge fund Elliott Management and a group of institutional investors, as tensions rise over the oil major’s climate strategy and capital allocation, according to a report by the Financial Times.
Elliott, which has built a nearly 5% stake in BP, is pressuring CEO Murray Auchincloss to divest major assets, including some of its green energy portfolio, in an effort to boost returns. The hedge fund’s intervention has intensified concerns among institutional investors, who are now demanding a shareholder vote on any potential rollback of BP’s decarbonisation commitments.
A coalition of 48 institutional investors — including Rathbones Investment Management, Phoenix Group, Robeco, and Royal London Asset Management — is urging BP to maintain accountability over its energy transition plans. In a letter to BP chair Helge Lund, they argued that shareholders should have a binding vote on any shift in strategy, particularly regarding BP’s commitment to cut oil and gas output.
These investors collectively hold 2.5% of BP’s shares — a smaller stake than Elliott but significant enough to challenge the hedge fund’s aggressive restructuring agenda. The request comes ahead of BP’s investor day next Wednesday, where Auchincloss is expected to outline a new strategic direction.
Elliott’s involvement suggests it sees BP as undervalued, with potential upside unlocked through aggressive portfolio reshuffling. According to the FT’s sources, the hedge fund isn’t necessarily pushing for short-term growth in oil and gas production but wants to see: stronger capital allocation discipline; a leaner cost structure; and a divestiture plan for underperforming or non-core assets.
This approach aligns with Elliott’s activist playbook, which has been deployed in past energy investments, often forcing companies to spin off assets or increase cash returns to shareholders.
BP remains the only oil major with a firm target to reduce oil and gas output — originally set at 40% by 2030, later revised to 25%. Many investors fear Auchincloss will further weaken or abandon this goal to appease Elliott and other performance-focused shareholders.
While Elliott has not publicly outlined its expectations, sources indicate the hedge fund seeks a “fundamental pivot” — one that rebalances BP’s portfolio toward high-return assets while enforcing tighter capital discipline.
