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(Bloomberg) – Hedge fund Bluebell Capital Partners says BP Inc.’s shift away from fossil fuels is misguided and weighs on its stock price, and is ramping up investments in oil and gas and increasing its focus on renewable energy. asked the company to reduce spending on
The London-based investment firm, seen by Bloomberg, said in an October letter to Chairman Helge Lund that BP would spend an additional $1.5 billion a year on oil and gas production until 2030 and renewable renewables. He said further investment in energy and power should be halted. The company reiterated its request in another letter on Jan. 26.
The activists’ campaign has increased pressure on BP’s new chief executive, Murray Auchincloss, who was appointed this month to replace Bernard Looney, the architect of the strategic shift. Bluebell, known for agitating for change at Danone SA, admitted Mr Rooney had not fully disclosed his past relationships with colleagues and called for his resignation had he not left in September. He said he would have done so.
BP’s strategy is flawed because the company aims to reduce fossil fuel production to support the global goal of net-zero carbon dioxide emissions by 2050, but the policy The targets are becoming increasingly unrealistic, the hedge fund said.
“BP is preparing to operate in a world where the world BP needs to know does not exist,” Bluebell co-founders Giuseppe Bivona and Marco Taricco wrote in an October letter. Ta.
The company called for cutting cumulative investments in bioenergy, hydrogen, renewable energy and electricity by $28 billion by 2030.
Bluebell said BP’s stock is worth at least 50% above its current price, and that this discount is mainly due to its oil and gas wind-down strategy, while “low profit targets have prevented BP from being profitable. “We are rapidly promoting risky diversification into new fields.” You have no right to defeat your opponent. ”
“BP welcomes constructive engagement with shareholders,” the company said in a statement. “We have recently met with most of our major shareholders and continue to gain support for our strategy. We are confident that this will drive sustainable long-term value for our shareholders.”
As of 9am in London, BP shares were up 1.5% at 468.65 pence. The Financial Times first reported on the Bluebell letter.
Many analysts welcomed Auchincloss’s appointment and the continuity it brings to BP’s energy transition strategy. But he faces skepticism from investors over whether he can solve the company’s long-term challenges, including a wide valuation gap with U.S. peers and questions about the sustainability of share buybacks. are doing.
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