BP PLC's upcoming strategic review "may have new impetus", analysts at Citi said after it emerged that activist investor Elliott Management is now involved, with other analysts suggesting chairman Helge Lund could be a target.
The key strategic update, which was recently pushed back a few weeks to 26 February, "has seemingly taken an even more important turn", oil analysts at the investment bank said in a note to clients on Monday.
They suggest a reset of the ambitions of the Low Carbon business, which they note has consumed 20% of net investment in the last five years, would be "the most obvious pathway to change", as well as reducing the associated cost-base that has supported these ambitions.
Current CEO Murray Auchincloss has made a start in reversing the shift to investing more in renewable energy that had been pursued by his predecessor Bernard Looney.
"Sustained underinvestment means there is no quick fix to pivot the business back to traditional Oil & Gas, but there are one of two asset positions - most notable BPX - that can potentially be leveraged to do so," the Citi analysts said. BPX is the British oil group's US onshore oil and gas business.
Ahead of the capital markets day later this month BP is now facing even more pressure to make substantial changes.
As well as an overhaul of its green bets a shake-up of the board is also likely, said market analyst Neil Wilson at TipRanks.
"Probably also expect a big shift to focus on upstream capital projects to improve cash flow."
In terms of personnel, it is thought that Elliott will push for the removal of chairman, Lund, who helped oversee the company’s net zero strategy with previous CEO Looney, said Wilson.
"Investors have been left unhappy since Looney made a dodgy bet in 2020 that global oil demand had peaked, driving the company towards a low-carbon strategy that has failed to pay off. Since then, shares have lagged peers significantly.
"Lund also oversaw the debacle of Looney’s sudden dismissal for personal conduct. It’s broadly felt that the board and management team have changed little since he was CEO, which will make for an easy win for Elliott from the outset. "
The news that Elliott has joined the shareholder register comes just three weeks after BP said it would cut 5% of its global workforce as part of a cost-cutting drive.