Elliott Investment Management, a U.S. activist investor with a 5% stake in BP, is shaking things up at the $78 billion oil giant. With BP’s stock down 13.6% this year, the plan is to refocus on fossil fuels, cut costs, and boost shareholder value—but it’s not without risks.

What’s the Plan?

Elliott wants to replace BP’s outgoing Chair, Helge Lund, who’s stepping down in 2026 after a rocky tenure. CEO Murray Auchincloss led a five-year low-carbon push that tanked returns, with BP’s shares dropping 15% since 2019, trailing Shell’s 13% gain and Exxon’s 56%. Elliott’s eyeing a chair with fossil fuel or mining chops who can focus solely on BP .Top candidates include:

Ken MacKenzie, ex-BHP chair, who delivered 22% annual returns and worked with Elliott to sell BHP’s U.S. shale assets to BP in 2018. He’d need to relocate from Melbourne.
John Manzoni, former BP refining head and current Diageo chair, offering insider know-how.
Mark Cutifani, ex-Anglo American CEO, now at Vale’s base metals, bringing an outsider’s view.

Elliott also hints at replacing Auchincloss. A standout candidate is Tufan Erginbilgic, a BP veteran who’s boosted Rolls-Royce’s shares tenfold since 2022. At 65, he’s a long shot but could tackle BP’s turnaround like he did at Rolls.

The goal? Sell non-core assets, slash costs, and rebuild investor trust. BP’s market cap of £71 billion lags Shell’s £165 billion, and Elliott’s $3.9 billion stake gives it serious clout.

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Why It Matters?

BP’s been a laggard. Its low-carbon pivot, meant to align with climate goals, misfired, and its return to oil and gas taps into steady demand—global oil use hit 103 million barrels/day in 2024, per the IEA. But Elliott’s push comes as green policies like the EU’s CBAM raise costs for high-carbon firms, and 83% of investors prioritize ESG, per a 2024 BCG report. A fossil fuel focus might lift shares short-term but risks stranding assets if oil demand peaks by 2030, as the IEA predicts. Plus, cost cuts could hit BP’s 70,000 workers hard.

The leadership shakeup is a high-stakes bet. MacKenzie and Erginbilgic could restore BP’s edge, but finding available, Elliott-friendly leaders is tough.

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The Challenges

Competition is fierce. Solar and wind projects, up 20% globally in 2024, are cheaper and faster to build, stealing tech firms’ attention for data center power. A new U.S. House bill could also kill nuclear subsidies, indirectly boosting oil but hiking BP’s transition costs. BP’s slow asset sales—only $2 billion of a $25 billion target by 2025—add pressure. And with nearly a quarter of shareholders rebuking Lund at the 2025 AGM, Elliott’s got the momentum but needs to act fast.

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