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Furthermore, if there is an Israeli response, it may warrant an Iranian response, at any point in time this may include limiting the freedom of navigation in the strait of Hormuz.
Understanding*
Mark - agree with the first part of your understand about the Iranian response being more of a symbolic response. However, I’m not sure how much the Israeli’s can be restrained in terms of their response (we’ve seen evidence of their rogue behaviours in Gaza contrary to American requests) - I also think that Israel sought this conflict to take the attention away from what is happening in Gaza and portray a wider conflict of the West vs Iran to relieve some of the pressures they are under from their allies.
If we end the week above £5.35 I’d be satisfied, above £5.40 I’d be happy, we’re not that far off from the highs of the last 12 or so months and we’ve got a strong first quarter to look forward to with a stronger start to the second quarter.
I suppose it could be everything you’ve listed Clued. There must be investors that are frowning upon the current strategy but can’t be seen to be frowning in the public domain because of their new underlying corporate strategies to become/invest in more ‘green’ pathways.
Agree meoryou, both statements can’t be true. Perhaps some investors are more forthcoming with their true opinions than others, depending on the audience they’re communicating with.
Almost all of BP’s biggest shareholders are unhappy with its shift to green energy, an activist investor has claimed, amid a growing backlash over the oil giant’s focus on net zero targets.
Giuseppe Bivona, chief investment officer of Bluebell Capital, which has a minority stake in BP, said he had spent the past three weeks talking to many of the company’s top 30 investors.
He said: “With only the exception of one shareholder, I am still to find someone who supports BP in its entirety.”
Bluebell is spearheading a brewing investor revolt after sending a 30-page letter to the FTSE 100 company in January.
In the letter it urged BP to halt investment in renewable energy schemes, prioritise oil and gas production, and rewrite net zero targets to clarify that they will be achieved “in line with society”.
BP has been under increasing pressure over net zero commitments that have allegedly left shareholders £40bn poorer.
Mr Bivona said he plans to share negative feedback with BP on a no-name basis, which he said will “clearly expose them to the fact that many investors are sympathetic to what we are saying”.
He is hopeful this will serve as a “wake-up call” for the company, with Bluebell having previously taken similar action against blue-chip giants Glencore and Danone.
The activist threat represents the first major test for Murray Auchincloss, BP’s new chief executive, who has told staff that he will stick to the green energy plans rolled out by his predecessor Bernard Looney.
One of Mr Bivona’s biggest criticisms of BP is that it has destroyed shareholder value by investing billions of pounds in loss-making renewable energy businesses.
He said: “When you want to deploy billions of pounds on renewable power at a return of 6pc to 8pc, that is insane. BP is such a poorly managed company.”
Despite the criticism, Mr Bivona has given BP a stay of execution to allow it to respond to Bluebell’s concerns, adding that he was not looking to stir up trouble at the forthcoming shareholder meeting.
He added: “But watch out for the next one.”
Mr Bivona said BP is open to the idea of scrutinising its green energy plans but said the company is too scared to follow through with Bluebell’s requests in case of a backlash from environmentalists.
A BP spokesman said: “We do not recognise the assertions Bluebell has made. In recent weeks and months, we have engaged extensively right across our shareholder base internationally, including with our largest shareholders.
“We have heard clear and widespread support for BP’s strategy and our focus on delivery. Throughout this engagement, we have not heard support for Bluebell’s proposals.”
Apologies for the repeat, hadn't seen the earlier post.
We seem to have cleared that value already.
Personally I don’t think there will be a significant drop on results due to a drop in profits compared to 2022. 2022 was more of an anomaly with energy prices as opposed to the current year. Updates on buybacks, dividends and strategy will probably be of more significance..
Oil majors BP (BP.L) and TotalEnergies (TTEF.PA) emerged as the winners in a 7 gigawatt (GW) offshore wind site auction in Germany worth 12.6 billion euros ($13.96 billion), highlighting the appeal of renewable assets across Europe.
The move comes as European oil giants seek to grow their low-carbon businesses by entering the renewables sector, a market traditionally dominated by utilities, even though returns for solar and wind projects have come under pressure in recent years due to supply chain constraints and rising interest rates.
"The results confirm the attractiveness of investments in offshore wind power in Germany," said Klaus Mueller, president of Germany's energy regulator Bundesnetzagentur. He called the move an important step towards reaching a national offshore capacity goal of 30 GW by 2030.
Analysts at Jefferies noted the high price for the auction, adding that it implied "high interest in European offshore wind sites from energy companies/developers".
Three sites in the tender for building 2 GW of offshore turbine capacity are located around 120 km (75 miles) northwest of the island of Heligoland in the North Sea and one with 1 GW lies in the Baltic Sea, some 25 km away from the island of Ruegen.
BP won the rights to develop two projects, marking its entry into offshore wind in continental Europe and representing 4 GW out of the total, it said in a separate statement.
"This is a significant milestone for BP, showing our commitment to transitioning into an integrated energy company," BP head of offshore wind Matthias Bausenwein said.
The power from the windfarms will be used to produce low-carbon, or green, hydrogen and biofuels as well as to supply BP's electric vehicle charging network, he said.
Awards for the other two sites, which include rights to develop, build and operate the plants and to receive network connections, went to TotalEnergies, the French company said in a statement.
"Our entry into offshore wind power in Germany, Europe's largest electricity market, is a key step in the implementation of our strategy to become an integrated profitable player in the electricity markets," TotalEnergies CEO Patrick Pouyanne said.
Ninety percent of the revenue from the tender will go to reducing electricity costs and marine protection measures, the regulator said.
BP said the move was fully aligned with its integrated energy strategy and disciplined capital allocation, adding it expected returns from the project of between 6% and 8%.
BP's initial payments totalling 678 million euros, equivalent to 10% of the bid amount, will be paid by July 2024. The remaining 90% will be paid over a 20-year period when the projects become operational.
TotalEnergies said it will pay the German Federal government 582 million euros, adding an annual contribution would also be paid to the electricity transmission system operators in charge of connecting the projects for 20 years from the sites' commissioning.
Freezing/writing off the Rosneft stake from what I’ve read has the potential to reduce BP’s oil output by a third. Is this not what the market has priced in?
Is this stock really that undervalued at the current SP? Increase in demand could easily be nullified by shale production recommencing and a reduction in cuts from OPEC+, not to mention other miscellaneous factors such as Libya recommencing production. Any under supply will only be drawing from inflated inventories and it is unlikely to be a prolonged period of under supply considering the ongoing global battle for market share. The oil price may well remain stagnant at around $50 for longer than people expect and this may have a more medium term impact on the major's rather than the current short term turmoil most PI's seem to be assuming.
Think we may be getting ahead of ourselves predicting £3.80/£4 next week, i'd be happy if we stabilise around the £3.60 mark and leave the sub £3.50 days behind us.
Broken through
This news is more of a formality than 'brilliant breaking news'..
Charlie - if $38 supports the present dividend why would BP have increased their debt to pay the entire first quarter dividend, when the first quarter average price for oil was well into the $50's? There have been posts stating BP have a break even of $35 which is untrue, this is a target they are working towards by 2021 and not something they have already achieved. The progress towards that target is unclear and there could easily be a setback towards achieving this target due to the deflated price of assets in the current climate.
An extension to the OPEC+ cuts will certainly be a positive but the restart of shale production can easily offset any extension of production cuts. Similarly demand may gradually be picking up but again this can easily be offset by potential second peaks of the virus and certain demand may well take years to recover to pre-covid levels (e.g. airlines, even road users if working from home/sustainable travel becomes more of a norm).
Happy to hear an alternative perspective/interpretation of my points, i am a long term holder here and i share the general optimism but some of the recent posts seem more akin to unsubstantiated ramping rather than informed predictions.
I'm not sure why people are under the impression that a dividend cut is priced into the SP? I don't think it is, nor do i think a dividend cut is as full gone a conclusion as people make out to be.