BP (LON:BP.) is more acutely aware of what investors want from an oil major in the wake of the Macondo disaster, according to City broker Investec, which in a note discussed the unveiling of the group’s new strategy yesterday.
“This was a carefully pitched message of rising cash flow, flat capex and maximising returns to shareholders,” Investec analyst Neill Morton said.
Credit Suisse analyst Thomas Adolff said BP’s near-term outlook “perhaps disappointed”, but pointed to elements of the new strategy that will be closely followed by investors.
“One of the notable features of BP's portfolio today is the concentration of the business (with young upstream reservoirs), which enables greater visibility, but more importantly enables focused management,“ he said in a note.
Adolff also says BP’s plan to create new American business unit was a ‘welcome initiative’.
“From a portfolio perspective, perhaps the genuinely new update is BP's intention to now run its US onshore (upstream) business independently.
“It admitted that the performance of this business has been underwhelming, and that it believes through separate management, own governance, processes and systems significant value can be crystalized.
“This is an attempt to create a quasi-independent within BP's structure with the flexibility and agility to make the business work, challenging the perception that Majors are unable to unlock full value from their US onshore businesses.”
Credit Suisse said it had no cause to change its estimates or rating following the strategy briefing.
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