BP's New CEO to Outline Strategy as Balance Sheet Strengthens — 2nd Update

By Adam Whittaker

BP said it would update its strategy in December, giving new Chief Executive Meg O'Neill her first opportunity to outline her vision for the British energy major to investors.

O'Neill has headed up the company since April this year and inherited a strategy that re-prioritized its traditional oil-and-gas business while paring back spending on renewable energy. Pressure on the company increased when in February last year activist hedge fund Elliott Management took a stake in it.

Since arriving, O'Neill has made shoring up the balance sheet a priority and moved to simplify BP's portfolio of assets and company structure. She has put its U.K. North Sea assets and U.S. biogas business up for sale and has promised decisions will be based on value, not sentiment or history.

Alongside a global conflict that has upended energy markets, O'Neill has had to manage turmoil at the top of the business.

The board removed Chairman Albert Manifold just weeks into her tenure after it received whistleblower reports that he was bullying and verbally abusive toward staff, according to people familiar with the matter. Manifold later rejected what he described as lies about his behavior.

Manifold, with a track record of cutting costs and reshaping the portfolio of Dublin-based building-materials company CRH was brought in to lead a turnaround of the oil company.

Now O'Neill will have the opportunity to set out what she thinks BP should be, where the company will spend its money, and how it will make decisions on which projects to progress.

Her comments so far have focused on improving BP's operational performance while signaling a promise to invest with greater discipline. "Focus, perform, grow" has been her mantra.

Tuesday's update shows the company's deleveraging efforts are working, J.P. Morgan's Matthew Lofting writes.

Higher oil and gas prices triggered by conflict in the Middle East have helped and BP said it now sees net debt at the end of the third quarter between $13.5 billion and $14.5 billion, down from $22.3 billion at the end of the second quarter.

The company's balance sheet has been weighed down by heavy debt after an expensive pivot toward renewable energy failed to deliver the promised returns. As it brings net debt under control, the company will be better able to deploy capital toward what it regards as higher-returning oil and gas projects.

Its efforts to cut net debt are ahead of schedule. It had been targeting net debt of $14 billion to $18 billion by end 2027 and Tuesday's update doesn't include the roughly $6 billion in proceeds it expects from the sale of lubricants business Castrol to Stonepeak.

"December's strategy and outlook update is an opportunity to set out the next phase of delivering a simpler, stronger and more valuable BP," the company said.

BP flagged a $3 billion to $4.5 billion charge booked against its transition businesses, which include electric-vehicle charging, bioenergy and renewable assets.

Its oil trading arm continues to outperform, and the company joined British peer Shell in reporting a jump in refining margins after global conflict and export restrictions removed millions of barrels of refined products from the market and left customers scrambling for alternate supplies.

Attacks on several large refineries in the Middle East have squeezed global diesel and jet fuel supplies. Ukrainian drone attacks on Russian refineries and Chinese export restrictions have also removed supplies from the global energy mix, and helped push prices of both higher. In all, the world is short of about 1.6 million barrels of diesel a day, the International Energy Agency said last month.

Oil majors have ramped up diesel and jet fuel production in response to market conditions, and in doing so, tried to capture as much of the higher margins as possible.

Shares were 1.3% higher in morning trade.

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

(END) Dow Jones Newswires

October 13, 2026 04:17 ET (08:17 GMT)