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Investing.com -- BP Plc (LON:BP)(LON:BP) is expected to provide new details on its $5 billion cost-reduction program on Tuesday, the Financial Times reported on Monday.
This comes as activist investor Elliott Management intensifies its push for deeper cuts to the energy company’s operating expenses.
In February, BP CEO Murray Auchincloss outlined plans to cut between $4 billion and $5 billion in costs by 2027, using 2023 as the baseline year.
However, Elliott is urging the company to aim for an additional $5 billion in savings beyond that target, the British newspaper reported.
The report flags that Elliott has pointed to BP’s extensive global support staff as a major contributor to its high cost structure.
So far in 2024, BP has reduced expenses by $750 million and plans to meet its overall cost-cutting goals through workforce reductions, asset sales, and supply chain optimization, the report said.
Back in April, Reuters reported that Elliott Management advocated for BP to lower its annual spending to about $12 billion, down from the current $13 billion to $15 billion range, by 2027. The hedge fund is particularly focused on trimming administrative costs.
Elliott, which owns just over 5% of BP’s shares, is also pushing for structural changes.
These include replacing BP’s current strategy chief and splitting the company’s upstream and downstream operations into separate business units to improve oversight and performance.