Shares in oil giant BP (BP) slipped lower today as it looks to continue its shift back towards fossil fuels by hiring two new board directors.
New Oil and Gas Director
According to the Financial Times, BP is looking to bring on board two new directors to help it shift policy away from renewable energy and back to its traditional home of oil and gas. The move is also said to be in response to pressure from investors to strengthen the UK blue-chip’s board.
The FT reported that, under the direction of Chair Helge Lund, the additions would take the number of directors on the board from 11 to 13. Not unlucky, though, for the two people who will hold the new positions – one, a director focused solely on oil and gas, with the other position dedicated to remuneration.
Go Further and Faster
It is unclear, the paper added, what stage the hiring process has reached or whether BP has consulted with U.S. activist investor Elliott Management on the move. It has around a 5% stake in the company and, befitting its nature, has been agitating for the company to cut its spending on renewable energy projects such as offshore wind. Last week, BP announced plans to overhaul its strategy and scrap its goal of being a global renewable energy leader. Indeed, it vowed to slash spending on green energy projects by 70% and sell $20 billion of assets.
Some investors, such as Elliott Management, want to push BP to go further and faster in divesting its renewable energy projects, with some questioning whether it is wise to let the previous board lead the new direction. A new director of oil and gas would, it seems, be BP’s answer, at least in the short term.
Is BP a Good Stock to Buy Now?
On TipRanks, BP has a Moderate Buy consensus based on 5 Buy, 6 Hold and 1 Sell rating. Its highest price target is $50. BP stock’s consensus price target is $35.04 implying an 10.15% upside.
