BP urged to scale back its green agenda: Investor blasts oil giant’s ‘irrational’ climate targets

An activist investor has urged BP to ditch its green strategy and continue to cash in on oil and gas.

Bluebell Capital Partners wrote to the energy giant’s chairman Helge Lund with concerns about how the FTSE 100 energy giant is run.

The London-based hedge fund blasted BP’s green transition plan as ‘irrational’ and said the strategy has depressed its share price.

Investors are concerned that BP is underperforming compared with rival Shell and US energy giants Exxon Mobil and Chevron.

Shell has scaled back its net zero transition strategy under the leadership of chief executive Wael Sawan. And American energy firms have doubled down on oil and gas production.

But new BP chief executive Murray Auchincloss has vowed to press ahead with the green strategy laid out by his predecessor Bernard Looney.

BP was left reeling by the shock exit of Looney in September.

He was forced to resign after failing to be ‘fully transparent’ about personal relationships with colleagues. 

The Irish businessman was found guilty of serious misconduct and stripped of £32million in pay, bonuses, share awards and other benefits.

Bluebell’s letter was sent in October, after Looney’s departure while Auchincloss was still interim chief.

The former finance chief was this month confirmed as Looney’s permanent replacement.

Some investors were disappointed in the selection of a ‘continuity candidate’ and Auchincloss promptly reiterated his support for the green agenda.

In the letter, which came to light yesterday and was also addressed to Auchincloss, the fund said it would have called for Looney’s resignation had he not already stepped down.

BP should scrap its pledge to cut oil and gas output by 25 per cent by 2030 compared to 2019 levels, Bluebell said.

Pledge: New BP chief executive Murray Auchincloss (pictured) has vowed to press ahead with the green strategy laid out by his predecessor Bernard Looney

Instead, it said BP should increase oil and gas investment and production targets, while slashing spending on renewables.

‘This irrational strategy has, quite understandably, depressed the value of BP’s share price, leading to an approximate 40 per cent discount vs its best-in-class-peers,’ Bluebell said, citing US giants ExxonMobil and Chevron.

The share price is ‘clearly indicating that the stock market sees BP’s current strategy as unappealing and value destructive’, the letter added.

Bluebell did not reveal the size of its stake in the oil and gas major. A BP spokesman said: ‘BP welcomes constructive engagement with our shareholders. We have met with most of our major shareholders recently and continue to receive support for our strategy.

‘We continue to make significant progress, remain focused on delivery, and are confident the strategy will grow the value of BP and deliver sustainable long-term value for shareholders.’

Bluebell, a small activist investor focused on European stocks, was involved in the removal of the chief executive of French consumer goods company Danone in 2021. 

It unsuccessfully pressured mining giant Glencore to spin off its thermal coal business, before selling its stake in the company.