By Brian Swint

Shares in BP, the oil company that has lagged behind rivals Exxon and Chevron for years, jumped after activist investor Elliott Management revealed its stake in the company had grown to just more than 5%.

Elliott's investment had been reported before, but on Tuesday evening the size was revealed for the first time in a regulatory filing with the London Stock Exchange. The hedge fund, led by founder Paul Singer, is now one of the largest holders.

BP CEO Murray Auchincloss is focusing the business on oil and gas projects, rather than the less-profitable renewable energy that had become a key part of the company's strategy since 2020. He's set a target of generating 20% compound free cash flow growth over the next three years.

Elliott's message for BP is that it's not going far enough in revamping its strategy. It would like free cash to grow to $20 billion by 2027, compared with the current goal of $14 billion, Elliott's message for BP is that it's not going far enough in revamping its strategy.

It would like free cash to grow to $20 billion by 2027, compared with the current goal of $14 billion, sources familiar with the matter told Barron's. The company should be more disciplined in its spending and more aggressive in cost savings, they added.

The question is whether Auchincloss can deliver -- or whether investors like Elliott push him aside to make way for new management, or agitate for BP to merge with a rival. Even after the strategy reset and Elliott's involvement, BP has still underperformed cross-town rival Shell this year.

BP's American depositary receipts rose 3.2% in premarket trading. Its London-traded shares popped 4.5%.

"We have been notified by Elliott Investment Management that their shareholding in BP has exceeded the 5% notification threshold, we have therefore disclosed this in the appropriate way," a spokesman for BP said. "However, beyond required disclosures, we do not comment on individual shareholdings. We welcome constructive feedback from all shareholders as we focus on delivering our reset strategy."

Elliott declined to comment.

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

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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April 23, 2025 07:56 ET (11:56 GMT)

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