Elliott Management Urges BP to Cut Spending

Irina Slav, a writer at Oilprice.com with more than ten years of experience covering the oil and gas sector, reported that activist investor Elliott Management has acquired a stake of over 5% in BP and is pushing the company to increase cash flow through cost-cutting measures. BP’s spokesman, David Nicholas, stated that the company is focused on implementing its recently announced strategy and welcomes feedback from shareholders. Elliott Management aims for BP to achieve $20 billion in annual free cash flow by 2027, which is 40% higher than BP’s own target. Last year, BP reported free cash flow of $8 billion and planned to increase this by about 20% annually through 2027, reaching just under $14 billion by that year. Elliott Management proposes reducing BP’s annual spending from $13-$15 billion to $12 billion over the next three years. Despite not having voting rights, Elliott Management has exerted significant pressure on BP, leading to a shift back to oil and gas investments and a decrease in clean energy spending. BP plans to increase its investment in upstream oil and gas to $10 billion per year while cutting clean energy spending by over $5 billion annually. The company aims to launch 10 new major projects by the end of 2027 and an additional 8-10 projects by 2030, with production expected to reach 2.3-2.5 million barrels of oil equivalent per day in 2030, potentially increasing to 2035.