BP to update on cost-cutting progress as Elliot increases pressure, FT reports

(Reuters) -BP will announce updates on its $5 billion cost-cutting initiative on Tuesday, amid growing pressure from activist investor Elliott Management to take stronger action to reduce its operating expenses, the Financial Times reported on Monday.

Elliott wants BP CEO Murray Auchincloss to add another $5 billion of cost savings to the $4 billion-$5 billion in reductions by 2027 he announced in February from a 2023 baseline, the FT report said.

Reuters could not immediately verify the report. BP and Elliott did not immediately respond to a request for comment.

The hedge fund has "identified tens of thousands of BP support staff globally" as an example of the cost base, the report added.

BP has already cut $750 million of costs towards its target in 2024, and is looking to reach its cost savings target through job cuts, divestment and streamlining supply chains, the FT report said.

Reuters reported in April that the activist investor would like BP to cut its spending to around $12 billion a year, down from a current range of $13 billion-$15 billion, through to 2027, and deepen its cost cuts, especially on administrative expenses.

Elliott, which holds a stake of little more than 5% in BP, also wants the oil major to replace its strategy chief and create separate units for upstream and downstream activities to improve accountability.

(Reporting by Chandni Shah in Bengaluru; Editing by Rashmi Aich and Janane Venkatraman)