BP’s New Era Begins with a Shareholder Rebuke and a $25.3 Billion Debt Surprise

BP's strong Q1 trading profits are marred by a shareholder rebellion, rising net debt, and a governance crisis as new CEO Meg O'Neill takes charge.

BP’s first-quarter trading bonanza has been overshadowed by a shareholder revolt and a sharp rise in net debt, setting the stage for new chief executive Meg O’Neill to navigate one of the most turbulent periods in the oil major’s recent history.

A Governance Shock at the AGM

The company’s annual general meeting delivered an unusually blunt message from investors. Two management resolutions were defeated: one would have allowed BP to scrap certain climate-related disclosures, while the other sought to hold future meetings entirely virtually. Both failed to secure the required 75 percent majority.

Adding to the tension, roughly 18 percent of shareholders voted against the re-election of chairman Albert Manifold, who has been in the role for only a few months. Critics accused him of attempting to weaken climate transparency and of blocking a resolution from activist group Follow This. A separate proposal backed by the Australasian Centre for Corporate Responsibility (ACCR) also fell short, though it attracted a quarter of the votes cast. BP has acknowledged the discontent and pledged to respond within six months.

O’Neill Takes the Helm

Amid this governance turmoil, Meg O’Neill officially became BP’s chief executive on April 1, 2026. She is the first woman to lead one of the world’s five largest oil companies and the first external appointment to the role in over a century. She is also the fifth person to hold the top job at BP since 2020.

Her stated ambition is to create a “simpler, stronger, and more valuable” company. To that end, she plans to reorganise BP into two divisions — upstream and downstream — though no firm timeline has been set for the restructuring.

Trading Triumph and a Debt Hangover

The first quarter was a standout for BP’s trading desk. The company capitalised on market volatility, avoiding the production outages that hit rivals during the Iran conflict. Adjusted earnings reached $3.2 billion, while refineries processed more than 1.5 million barrels per day — the highest throughput in four years. Overall oil and gas production remained steady, with higher output in the Gulf of Mexico offsetting supply chain disruptions in the Middle East.

The stock has gained roughly 30 percent since the start of the year and around 64 percent over the past twelve months, trading at €6.66 — near its 52-week high of €6.88.

Yet the strong operational performance came with a cost. Net debt climbed to $25.3 billion by the end of March, driven by inventory build-up and higher prices tying up capital. Management has acknowledged the strain and plans to reduce hybrid bond financing by approximately $4.3 billion.

Portfolio Shifts and Cost Targets

O’Neill has wasted little time reshaping the portfolio. BP has agreed to sell its German refinery in Gelsenkirchen to the Klesch Group, a move that supports an increased cost-saving target. By the end of 2027, the company aims to cut expenses more aggressively than previously planned.

The full-year capital expenditure budget remains unchanged at $13.0 to $13.5 billion. BP expects to generate $9 to $10 billion from divestments and other proceeds, including roughly $6 billion from the sale of its Castrol lubricants business, with the majority flowing in during the second half of the year.

Second-Quarter Headwinds

The outlook for the current quarter is less rosy. BP has warned of lower upstream production due to seasonal maintenance, particularly in the Gulf of Mexico, and ongoing disruptions in the Middle East. These factors are expected to weigh on output.

Analysts Remain Constructive

Despite the governance tensions and rising debt, analyst sentiment remains broadly positive. Five analysts rate the stock a buy, six recommend holding, and only one advises selling. BNP Paribas Exane upgraded BP to “outperform” in April, followed by UBS lifting its rating to “buy.” The most recent price target stands at $58.

Whether O’Neill can translate the recent share price rally into a sustainable operational and strategic turnaround will become clearer when second-quarter results are published. By then, investors will also have a better sense of how deep the production decline will be — and whether the new CEO can keep both the trading desk and the boardroom on a steady course.