Activist hedge fund Elliott Management is turning up the pressure on BP, calling for a dramatic tightening of capital discipline and a sharper focus on free cash flow generation, as it raises its stake in the UK energy giant to over 5%, according to a report by the Financial Times.
The report cites unnamed people familiar with the matter as saying that Elliott is urging BP to boost annual free cash flow to $20bn by 2027 — a 40% increase from the level implied by the company’s latest strategy update in February. That plan, outlined by CEO Murray Auchincloss, involved a pivot away from renewables and toward traditional energy assets but, in Elliott’s view, lacks both urgency and ambition.
“Murray has taken 18 months to come up with a three-year plan that’s neither ambitious nor urgent,” said a source close to Elliott’s thinking. “Time is not on BP’s side, with the macro backdrop and investor patience running thin.”
Elliott’s enhanced position, worth roughly £2.8bn, places it among BP’s top shareholders alongside Vanguard. The firm believes BP remains undervalued due to a combination of poor execution, cost bloat, and strategic drift — and that without decisive action, the company risks becoming a takeover target.
Elliott is advocating for annual capex to be cut to $12bn, well below BP’s $13–15bn guidance, and argues that an additional $5bn in cost savings is achievable. The hedge fund is also pressing for the sale of BP’s solar and offshore wind units, arguing these assets distract from BP’s core capabilities.
“There’s no need to chase growth in oil and gas,” said one person familiar with the firm’s view. “It’s about disciplined investment and extracting value from what they already have.”
Beyond strategic disagreements, Elliott sees deeper structural and operational issues at BP. Sources said the hedge fund believes management has failed to confront its execution shortcomings, pointing to overspending at Senegal’s Tortue LNG project and high operating costs that drove Devon Energy to pull out of a US shale joint venture.
Elliott also raised concerns about BP’s $4bn US biogas unit, describing it as highly reliant on federal tax incentives and vulnerable to changing regulatory dynamics.
The activist firm is reportedly calling for wider leadership changes, arguing that problems extend beyond the planned departure of board chair Helge Lund. At BP’s recent annual meeting, a quarter of shareholders voted against Lund’s reappointment — a signal, Elliott believes, of growing dissatisfaction with the company’s trajectory.
Both BP and Elliott declined to comment.
