BP Investors Demand Proof That Shift Back to Oil and Gas Will Boost Returns — 2nd Update

By Adam Whittaker

BP needs to demonstrate that higher spending on oil-and-gas production will deliver value for shareholders, a group of investors in the energy major said Tuesday.

BP is funneling investments into its traditional fossil-fuel business after a move into renewable sources of energy hit profits and led to multibillion dollar write-downs. The company reset its strategy February last year, has cut costs, and changed its leadership team in a bid to regain investor confidence that it can spend wisely and deliver higher returns.

A shareholder resolution filed by U.K. and European pension funds, along with activist investor Australasian Centre for Corporate Responsibility, said the reset strategy and renewed focus on oil and gas doesn't address the root cause of BP's underperformance.

The co-filers, including the Greater Manchester Pension Fund, Nest and more than 100 individual shareholders, represent 0.42% of BP's share capital. Their total stake was valued at more than $400 million as of Tuesday, according to LSEG data.

The investors called on BP to take a more disciplined approach to capital expenditure and to offer more detailed disclosure that would allow investors "to better assess whether and how the company's investment decision-making promotes disciplined capital allocation."

A representative for BP declined to comment.

Under its new strategy, BP is increasing oil-and-gas investment to around $10 billion a year for 2025 to 2027. This is 20% higher than previous guidance, and BP expects returns of greater than 15% on these projects.

BP should better disclose how it assesses cost-competitiveness for each project and how it accounts for cost-overruns, and should explain how investment in exploration creates value for shareholders, the group said. The disclosures should be made no later than next year's annual meeting of shareholders, the group said.

"Enhanced disclosures will give BP's investors the insights they need to assess whether the company's plans to increase upstream investments is a value-accretive strategy for them," the group said.

In a second-quarter earnings call, BP's production and operations lead Gordon Birrell said the company wasn't just "throwing money" at exploration projects, and that it was forcing teams to select the best prospects to pursue.

In December, when outsider Meg O'Neill was named as BP's next chief executive, the group's chairman Albert Manifold touted her financial discipline, and said "increased rigor and diligence" were needed for the company to maximize value for shareholders.

BP's capital allocation credibility has been severely impaired by its expensive missteps over the past decade and its needs to show investors how it has changed the decision-making processes that led to sustained and significant write-downs, Barclays analyst Lydia Rainforth wrote recently.

However, the company's finance chief Kate Thomson has taken a far more disciplined approach to spending over the past year, Rainforth added.

BP said in January it would write down the value of its gas and low-carbon energy division by up to $5 billion.

Write to Adam Whittaker at adam.whittaker@wsj.com

(END) Dow Jones Newswires

February 03, 2026 11:06 ET (16:06 GMT)