Brian Swint

BP, the oil major that has significantly underperformed rivals Exxon and Chevron over the past few years, has attracted the attention of an influential activist investor. The stock surged.

Elliott Management has built a stake, The Wall Street Journal reported, citing people familiar with the investment.

Elliott, a U.S.-based hedge fund, will push for transformational change at the U.K. energy giant. The fund is known for pressuring companies to fire management or split into pieces to drive higher returns for shareholders. It wasn't clear how big a stake Elliott has built in BP.

American depositary receipts of the London-based company jumped 6.5% in premarket trading Monday. Its U.K. shares gained 7%, putting them on pace for the biggest gain in two years, according to Dow Jones Market Data.

Without an improvement, BP may be forced to split up or merge with a rival. BP's decline has accelerated in recent years following a big and ultimately bad bet on the green energy transition. Energy companies that stayed focused on oil and gas have fared better.

BP's total return, taking dividends into account, came to 39% for the past 10 years, compared with Shell's 49%. It is even further behind Exxon's 80% total return and Chevron's 98%. BP declined to comment when contacted by Barron's Monday.

Traders have been frustrated by BP's increased focus on wind, solar, and other renewable-energy sources, which haven't been as profitable as oil and gas.

Elliott has yet to publicly state its intentions, but the move puts BP CEO Murray Auchincloss under even more pressure. Investors will learn about his plans when the company reports earnings Tuesday, and hosts a Capital Markets Day on Feb. 26.

Write to Brian Swint at brian.swint@barrons.com

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February 10, 2025 08:29 ET (13:29 GMT)

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