BP shares jump as oil giant targeted by activist investor

BP shares have surged after it emerged that activist hedge fund Elliott has built a stake in the oil giant.

Shares jumped by more than 6pc on Monday morning, following reports over the weekend that New York-based Elliott Investment Management had taken a position in the stock.

The fearsome hedge fund has a reputation for agitating for strategic change at companies it invests in, or lobbying for either a break-up or disposals of assets. Its stake in BP has fuelled hopes that the hedge fund could help revive the oil giant’s flagging performance.

BP has been targeted as the oil giant struggles to work out its approach to net zero and better-performing US rivals prepare for an industry boom under Donald Trump.

BP’s shares have tanked over the past year , leaving it vulnerable and sparking chatter that BP may even be a takeover target. Shares have fallen 9.3pc in the last 12 months. By contrast, rival Shell has seen shares rise by 6.2pc over the same period.

Investors have been frustrated by BP’s performance relative to rival and a perceived lack of direction.

Bernard Looney, the former chief executive , had vowed to “reinvent” the oil company and reach zero carbon emissions by 2050, amassing an empire of green energy projects.

However, his bet that oil production had peaked failed to pay off and the company abandoned its goal to cut oil output late last year. Instead, it has been pivoting back to fossil fuels and ditching some green investments, though it retains its net zero by 2050 target.

Murray Auchincloss, BP’s chief executive, will set out a new company strategy on Feb 26.

Investors are braced for disappointing earnings when BP shares its financial results for last year on Tuesday. Analysts expect underlying profits of $1.2bn (£970m) for the fourth quarter of 2024, compared with $3bn a year earlier.

The company has pledged to cut costs by $2bn by the end of 2026 in an effort to improve performance and last week said it would sell a refining site in Germany as part of the plans.

BP said in January that it would cut more than 5pc of its global workforce, equivalent to nearly 8,000 jobs. Its 15,000-strong UK workforce is expected to be hit hard by the cuts.

Such struggles come as US rivals prepare for boom times under President Trump, who made the slogan “drill, baby drill” central to his election campaign. In his inauguration speech, Mr Trump said “liquid gold” would help make the US “a rich nation again”.

In the UK, Sir Keir Starmer and Rachel Reeves have doubled down on economic growth as their “number one mission”, waving through Heathrow expansion despite concerns over emissions. However, Ed Miliband, the Energy Secretary, has sought to force a faster departure from oil and gas, ceasing all new licencing in the North Sea.