BP has announced a fresh cost-cutting review despite reporting better-than-expected quarterly profits of $2.35bn (£1.77bn), as the oil and gas giant seeks to fend off pressure from activist investors. The FTSE 100 company said the review would begin when new chair Albert Manifold joins the board in September.
The second-quarter profit, down 15% from the same period last year but up from $1.38bn in the first quarter, beat analysts' estimates of $1.8bn. Chief executive Murray Auchincloss said BP 'can and will do better' for its investors, disclosing a 4% increase in the shareholder dividend to 8.32 cents.
BP is under pressure from Elliott Management, the New York hedge fund that has built a stake in the company and is pushing for more aggressive cost reductions. The company's shares have fallen about 10% since Auchincloss's 'fundamental reset' strategy announcement six months ago.
The review comes as BP shifts focus back to fossil fuels, recently making its largest oil and gas discovery in 25 years off the coast of Brazil. This marks a departure from the green investment strategy under outgoing chair Helge Lund, who invested heavily in offshore wind amid rising costs.
Investment director Russ Mould of AJ Bell noted BP still has a modestly larger workforce than Shell despite being a significantly smaller business by valuation and revenue. BP's latest overhaul follows $5bn in cuts to its green investment plan earlier this year.
