Overview
- BP announced Tuesday that it will consolidate into two business divisions — upstream for oil and gas production and downstream for refining and sales — effective from the start of July.
- The company will split its trading operation across the two divisions and install Gordon Birrell as head of upstream with Richard Harding as interim head of downstream.
- Reporting indicates BP will remove the standalone low carbon energy unit and fold renewables and related activities into other corporate functions, reducing the prominence of those businesses.
- The reorganisation follows a contested governance episode when chairman Albert Manifold was removed on May 26 and has come as investors including activist Elliott pushed for tighter cost control and higher returns; BP shares fell about 2.5% on the day of the announcement.
- Markets and shareholders will now watch whether the restructure delivers the promised cost cuts, faster decision making and a permanent downstream leader as BP completes its portfolio review and seeks stronger cash returns.