Activist Elliott builds stake in oil major BP, source says

By Anousha Sakoui

(Reuters) -Activist investor Elliott Investment Management has built a stake in oil major BP, a source familiar with the matter told Reuters on Saturday.

The source did not provide the size of the stake.

U.S.-based Elliott is seeking to boost shareholder value by urging BP to consider transformative measures, Bloomberg News reported earlier on Saturday, calling Elliott's stake in the company "significant."

Elliott and BP declined to comment.

The activist investor sees BP as undervalued, Bloomberg reported. BP has a market capitalization of about 69 billion pounds ($85.62 billion), less than half of rival Shell's value of about 161 billion pounds, according to LSEG data.

Earlier this week, BP said it plans to sell a refining site in Germany as the company's chief pushes on with plans to cut company costs by at least $2 billion by the end of 2026.

BP Chief Executive Murray Auchincloss has been working towards rebuilding investor confidence in the company. In January, the company said it will cut over 5% of its global workforce.

Auchincloss is also seeking to restore confidence following the abrupt departure of his predecessor Bernard Looney in September 2023.

Auchincloss, who took office a year ago, will lay out his new strategy at an investor day on February 26. He has already taken major steps to reverse his predecessor's strategy of shifting away from oil and gas.

The British oil producer has warned that a drop in refining margins and the impact of turnaround and maintenance activity would result in an up to $300 million decrease in profit quarter-on-quarter.

Other global refiners in January offered little optimism in a near-term improvement in profit after a downturn in margins on producing fuel.

BP reports its fourth-quarter and full-year results on February 11.

Elliott has become one of the most influential activist investors with about $70 billion in assets, having recently pushed for a breakup at Honeywell . The fund also built a 3.2% stake in Anglo American after the London-listed miner became a takeover target by bigger rival BHP Group.

($1 = 0.8059 pounds)

(Reporting by Anousha Sakoui and Gursimran Kaur, Editing by Timothy Heritage and Diane Craft)