New BP Chair Albert Manifold told employees on Tuesday that the group’s portfolio was “overly complex” and it needed to execute its strategy of shifting focus back to oil and gas faster, according to an internal memo seen by Reuters.
Manifold took the helm of BP’s board on Tuesday. He succeeded Helge Lund, who came under investor fire for his close association with previous CEO Bernard Looney, who oversaw BP’s ill-fated foray into renewables. “Some of the assets we currently own may be more valuable to others,” Manifold said in the memo. “We need to increase our profitability.”
BP has vowed to sell $20 billion worth of assets to help slash its net debt pile from $26 billion to between $14 billion and $18 billion by the end of 2027.
“Our financial challenge is we are seeing lower levels of profitability and we have significant debt on our balance sheet,” Manifold said.
“It’s clear to me that our strategic direction is right, but we need to move faster to accelerate execution.”
A BP spokesperson declined to comment.
During Manifold’s 11-year CEO tenure at CRH, an Irish building materials maker, the company’s shares soared nearly fivefold as it reshaped its portfolio and moved its primary listing to New York in 2023.
BP has said it wants to grow its cash flow from around $8 billion last year by around 20% each year through to 2027, implying cash flow near $14 billion by the end of that period, according to Reuters calculations.
Activist investor Elliott, which has built an over 5% stake in BP, has urged BP to cut costs and spending to achieve even higher cash flow.
(Reporting by Shadia Nasralla and Stephanie Kelly. Editing by Jane Merriman and Nia Williams)