Thursday 30 April 2026 1:58 pm
BP wowed shareholders with its first quarter results – doubling profit and bolstering its balance sheet. But with an activist breathing down its neck, its new boss Meg O’Neill isn’t out of the woods yet.
A Stunning First Quarter
During the first three months of 2026, profit at the group more than doubled, far exceeding both its own estimates and the expectations of analysts. Buoyed by the historic turmoil in oil and gas markets caused by the regional conflict in the Middle East, its trading desk posted profit before tax of $3.2bn (£2.4bn); its best quarter since Russia’s Ukraine invasion. Even more impressive was its ability to keep overall production flat, despite the closure of the Strait of Hormuz.
The numbers had analysts gushing. Maurizio Carulli, global energy analyst at Quilter Cheviot, hailed them as “both positive and ahead of expectations”. XTB’s Kathleen Brooks simply branded them “stunning”.
New CEO’s Strategic Reset
Meg O’Neill, the first ever female chief executive of a British energy major, unveiled yet another corporate reset for the petrochemicals giant, returning it to its structure of old with two distinct divisions: upstream for oil and gas extraction, and downstream for refining and selling. The brief pandemic experiment under former boss Bernard Looney – in which the firm set itself the most ambitious renewable targets of any global energy company – had been fully consigned to the dustbin of history. Instead, O’Neill would accelerate the work begun by her immediate predecessor, Murray Auchincloss, and embrace the same hydrocarbons that powered BP to supermajor status throughout the 20th century.
Balance Sheet Repair Critical
Despite the eye-catching headline numbers, industry strategists were most encouraged by the progress BP made on shoring up its historically porous balance sheet. BP revealed it had redirected cash that would have been used for share buybacks to pay off $4.3bn of corporate bonds without reissuing them. “We are pleased to see the planned retirement of some hybrid debt, which will help decrease financing costs,” Carulli added.
“The balance sheet repair is critical,” O’Neill told strategists on a call, adding: “That, at the end of the day, is something that is going to be a critical focus of the leadership team over the coming years.”
As part of those same efforts, BP has promised to double down on simplifying its sprawling portfolio. In December, it offloaded its lubricant business, Castrol, to an American private equity firm for $10.1bn. And last month, it sold a German refinery plagued by issues to Klesch Group for an undisclosed amount. Those sales will both count towards the group’s ambitious plan to bank $20bn through asset disposals by next year. Both came after the stunning decision under Auchincloss to cancel $10bn worth of investment in renewable projects and divert it into its petrochemicals arm.
Shareholder Divisions Persist
Less than a week before the results, BP’s board lost two different votes at an eagerly anticipated annual general meeting. Shareholders rejected resolutions on shifting the gathering to a virtual affair and a plan to abandon a minor element of its climate reporting. Even more concerning was the fact nearly a fifth of shareholders rejected the reelection of new chair Albert Manifold – the ultimate figurehead for BP’s embrace of oil, gas and a simpler structure. Most chairs are reelected with near-unanimous investor support.
To Quilter’s Carulli, the vote did not amount to more than a “storm in a teacup”. “Manifold has actually done quite a good job in the past couple of months,” he told City AM. “And I don’t think we should read into this as a lack of confidence in the chair, but he is a lightning rod for other areas of dissatisfaction.”
Activist Investor Elliott Management Sated for Now
A year on, all arrows are pointing in a more lucrative direction. Since the nadir in May 2025, the group’s stock price has risen some 63 per cent as shareholders gorged on its re-embrace of fossil fuels. And even Elliott’s uncompromising team appears sated. A person familiar with the New York hedge fund’s thinking told City AM that Manifold’s first few months had been “encouraging”, and that he has already been a “positive catalyst for change”.
Perhaps when O’Neill next sits down to address her 100,000 staff, she will be able to adopt a somewhat less alarmist tone on the state BP finds itself in. For now though, as the Elliott source went to lengths to stress somewhat forebodingly, “it’s still early days”.
