BP Prepares for Full-Year Results Amid Investor Scrutiny
BP is set to face significant pressure from shareholders to demonstrate its ability to move beyond a turbulent period as it prepares to announce its full-year results this week.
The company is anticipated to report weaker annual profits following a third consecutive year of declining global oil prices in 2025, marking the longest downturn since the Covid-19 pandemic.
City analysts forecast BP’s profits to be approximately $7.5 billion (£5.5 billion), a decrease from nearly $9 billion in 2024. This follows an expected drop in fourth-quarter earnings after crude prices fell below $60 a barrel for the first time in almost five years.
Leadership and Strategic Vision Under Scrutiny
Meg O’Neill, who will assume the role of BP’s chief executive from April, is expected to face investor demands to articulate a new strategic vision. Activist shareholders continue to urge the company to prepare for a sustained decline in fossil fuel demand over the long term.
This month, a coalition of investors led by the Australasian Centre for Corporate Responsibility, which includes the workplace pension scheme Nest, filed a resolution requesting BP to disclose how it plans to manage its expenditure on oil and gas projects in the coming years.
Dutch shareholder activists from Follow This have also called on BP to reveal its strategy for generating shareholder value under scenarios where demand for fossil fuels diminishes.
Recent Project Developments and Market Performance
In 2024, BP commissioned seven new oil and gas projects as part of efforts to revive its financial performance after attempts to diversify into major renewable energy investments. Notably, five of these projects were completed ahead of schedule.
Analysts at Citi reported in a recent investor note that BP’s share price has outperformed its European competitors by 4.4%, equating to approximately $4 billion in additional equity value over the past six months. They also noted that rival Shell’s significant exploration success off the coast of Brazil could add between $15 billion and $20 billion to Shell’s valuation.
“We think all the ingredients are there for a substantial change in narrative,” Citi stated.
Opposition from Activists and Green Groups
Despite these developments, shareholder activists and environmental groups are preparing to challenge BP’s continued investments in new fossil fuel projects. They argue that these projects may not be financially viable due to the growing adoption of electric vehicles and the broader transition to clean energy, which is expected to reduce demand for oil and gas.
“The new chief executive needs to come up with a strategy to address the world’s declining oil and gas markets,” said Mark van Baal, founder of Follow This.
The International Energy Agency projects that global oil demand will begin to decline around 2030 in all but its most conservative energy use scenarios.
Follow This indicated that the new resolution, filed ahead of BP’s annual meeting in April, aims to increase shareholder pressure and highlight the financial risks associated with fossil fuel business models.
“In recent years the strategy has been shaky; shifting from left to right,” Van Baal said. “In our opinion they didn’t fail because they went too far too fast on green energy. They failed because their strategy was completely unclear.”
