Activist investor 'wants BP to go further on ditching renewables'

Activist fund Elliott Management wants BP to go further than plans outlined last week and completely ditch renewables, it has been reported.

The strategic "reset" that BP unveiled last week hiked investments in core oil and gas production by 20%, slashed green energy spending by 70% to between $1.5bn and $2bn a year and pledged to raise $20bn in divestments, but it was still poorly received on the stock market.

BP has already attempted to move its offshore wind investments off the balance sheet though a joint venture with Japan's JERA group, but Elliott wants the oil giant to offload investments in renewables completely, according to the report, which cited sources familiar with the situation.

Elliott, reportedly now BP's third-largest shareholder with around 5% of the fossil giant, is understood to believe that oil majors should steer clear of clean power investments because a lack of scale or expertise mean "it does not make sense to play".

As well as offshore wind, BP's other big exposure to renewables is its Lightsource BP onshore development arm, for which it has said it will seek a partner.

The activist is thought to be more supportive of BP's electric vehicle-charging network, because this is more akin to its fuels retailing arm.

While Elliott apparently ramps up pressure for a fundamental shift back to oil and gas, a significant body of other shareholders are still pushing for action on emissions reduction.

Auchincloss told the newspaper he thought natural gas will be a fuel of choice in responding to rising demand for electricity from data centres. "The challenge is how do we decarbonise this stuff as much as you can," he said, underlining BP's interest in capturing carbon emissions from oil and gas.

The BP boss stated that wind and solar will remain "very big business", even as the company drops targets and moves renewables off its balance sheet.