British energy giant BP Plc is expected to provide an update on its $5 billion cost-cutting initiative on Tuesday, as activist hedge fund Elliott Management increases pressure for further reductions.
Elliott is reportedly urging BP CEO Murray Auchincloss to double the planned cuts, calling for an additional $5 billion in savings on top of the $4–$5 billion target set in February. The proposed cuts would be based on a 2023 cost baseline and are aimed to be completed by 2027, according to the FT, News.Az reports, citing Reuters.
The hedge fund, which holds just over a 5% stake in BP, has specifically highlighted "tens of thousands" of global support staff as a key area for cost reduction. Elliott also seeks broader changes, including:
Cutting annual capital expenditure to around $12 billion, down from the current range of $13–$15 billion
Replacing BP’s strategy chief
Splitting upstream and downstream operations into separate business units to increase accountability
BP has already shaved $750 million off its cost base this year, and aims to reach its broader target through a combination of job cuts, asset sales, and supply chain streamlining, the FT said.
Both BP and Elliott Management declined to comment when contacted by Reuters, and the FT report could not be independently verified.
Elliott’s mounting demands reflect growing investor impatience with the pace and direction of BP’s transformation efforts, particularly as global energy markets remain volatile.
