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Investing.com -- BP’s new chair Albert Manifold told staff on Tuesday that the company’s portfolio was “overly complex” and that it must speed up efforts to refocus on oil and gas, according to an internal memo seen by Reuters.
“Some of the assets we currently own may be more valuable to others,” Manifold wrote. “We need to increase our profitability.”
BP has pledged to divest $20 billion in assets as it works to cut net debt from $26 billion to a target range of $14–18 billion by 2027.
“Our financial challenge is we are seeing lower levels of profitability and we have significant debt on our balance sheet,” he said.
“It’s clear to me that our strategic direction is right, but we need to move faster to accelerate execution,” Manifold added.
Manifold formally took over from Helge Lund as chair of BP’s board on Tuesday. Lund had faced shareholder criticism for his ties to former CEO Bernard Looney, who led the group’s troubled push into renewables.
During his 11 years as CEO of CRH, the Irish building materials group, Manifold oversaw a near fivefold rise in the company’s share price while streamlining its portfolio and moving its main listing to New York in 2023.
“We see the renewed board with greater urgency alongside the strategic reset as positives for the stock,” Barclays analyst Lydia Rainforth said in a note.
“This level of directness from an incoming chair, or even CEO is rare - both for BP and the energy industry as a whole,” she wrote.
The combination of Manifold’s approach, the potentially transformative Bumerangue discovery offshore Brazil, and visible progress from BP’s strategic reset are key reasons they view the company as being at a turning point in both its financials and share price performance relative to peers, Rainforth added.