Investing.com -- BP (LON:BP) is facing pressure from activist investor Bluebell Capital Partners to drop a commitment to reducing its oil and gas output, according to the Financial Times.
In a letter to shareholders cited by the paper, Bluebell argued that BP's push to bring down oil and gas production by 25% by 2030 versus 2019 levels would diminish stakeholder value. Bluebell called the energy major's plans "irrational," saying it is signaling a move away from hydrocarbons that would be faster than society as a whole, the FT reported.
Instead, the hedge fund urged BP to cut back on investments in bioenergy, renewables, and hydrogen between 2023 and 2028 by $28 billion, or roughly 60%, according to the FT. BP has "no right" to win against specialist incumbents in renewable energies, the paper quoted Bluebell as saying.
Bernard Looney, the former chief executive of BP, initially outlined plans in 2020 to reduce oil and gas production by 40% by the end of the decade. He later reduced this figure due to the impact of the disruption to western energy markets caused by the outbreak of the war in Ukraine.
While Looney's plan was well-received by many environmental groups, shareholders remained unpersuaded, causing BP's stock to routinely underperform larger peers like ExxonMobil (NYSE:XOM), Chevron (NYSE:CVX) and TotalEnergies (EPA:TTEF).
Looney resigned from BP in September after the company said he failed to adequately disclose past personal relationships with colleagues. Murray Auchincloss, Looney's replacement, has said he will stick to his predecessor's plan for oil and gas reductions.