BP’s investor Bluebell Capital Partners is urging BP to ditch its clean energy strategy to move away from fossil fuels.
In a letter seen by the Financial Times and The Times, Bluebell said the fossil fuel company’s pledge to reduce oil and gas production by 25% by 2030 compared with 2019 levels meant it was destroying shareholder value by moving away from hydrocarbons faster than society.
“This irrational strategy has, quite understandably, depressed the value of BP’s share price,” Bluebell said.
“BP is worth at least 50% more than the value currently expressed by [the company’s] stock price, and the discount is primarily due to an ill-conceived strategy aimed at drastically shrinking BP’s core business (oil and gas) on the one hand, and rapidly promoting a risky diversification into sectors with lower targeted returns and where BP has ‘no right to win’ on the other,” Bluebell added.
The letter was written in October 2023 after Bluebell acquired a small stake in the oil and gas company.
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Last year, BP scaled back its climate plans after its annual profits more than doubled to £23 billion in 2022 following an increase in gas prices.
As a response to the surprise windfall, the fossil fuel giant cut its emissions pledge and planned a larger production of oil and gas over the next seven years compared to previous targets.
Originally, the oil giant had said it was looking to reduce carbon emissions by between 35% and 40% by 2030 compared to 2019 figures.
However, after announcing its profits, the company cut its carbon emission reduction targets to between 20% and 30%.
A BP spokesperson told the FT that it welcomed “constructive engagement” with its investors and that “we have met with most of our major shareholders recently and continue to receive support for our strategy”.
