BP is to reset its strategy as it comes under pressure from an activist shareholder and has seen profits weaken.

The oil and gas major posted its lowest earnings in four years with fourth-quarter profit falling to $1.17 billion from $2.99bn in the corresponding period last year on weak margins in its refining business.

The 61% fall comes just days after it emerged that activist investor Elliott Investment Management has built a stake in the company, putting additional pressure on CEO Murray Auchincloss.

Mr Auchincloss has pledged to improve BP’s performance amid investor concerns about its energy transition strategy. He is expected to deliver clarity on his plans at the company’s Capital Markets Day on 26 February.

“In 2024 we laid the foundations for growth. We have been reshaping our portfolio – sanctioning new major projects, and focusing our low-carbon investment – and we have made strong progress in reducing costs,” he said in a statement with today’s figures.

“Building on the actions taken in the last 12 months, we now plan to fundamentally reset our strategy and drive further improvements in performance, all in service of growing cash flow and returns. It will be a new direction for BP and we look forward to sharing it at our capital markets update on 26 February.”

Elliott Advisers wants BP to consider “transformative” measures to boost shareholder value, according to Bloomberg.

BP said today that it would buy back a further $1.75 billion of shares in the coming quarter as promised and Mr Auchincloss said he had already taken a number of key decisions during his year in charge, which included ditching 30 weaker projects, approving ten new ones, and agreeing to spin off its offshore wind business into a joint venture that will require much less capital investment from BP. 

However, markets remain to be convinced that the group is developing a clear route forward.

“The arrival of activist investor Elliott on the oil major’s share register means the strategy presentation really had better be good,” said Russ Mould of AJ Bell.

Analysts at Jefferies said: “Given Elliott’s track record, we believe its involvement could lead to board changes, portfolio rationalisation (with a focus on exiting low carbon assets and certain retail regions), and capital expenditure prioritisation on upstream projects.”

Mr Auchincloss said that the investor day would demonstrate BP’s “focus on actions to drive performance” and enable it to “grow cash flow and returns — and shareholder value”.

He said: “It will be a new direction for BP, and not business as usual.”

On Monday the emergence of the activist investor pushed BP to the top of the list of FTSE 100 gainers, closing 7.4% higher. Following today’s results the shares were trimmed by 2.9p (0.62%) to close at 462.25.

Shares in BP are down by about 9% since this time last year. Its rival Shell has risen 6% and US Exxon Mobil by 7%.