Shareholder Resolution to BP plc on Upstream Capital Expenditure Disclosures

This shareholder resolution is co-filed by UK and European pension funds, along with ACCR, including: Nest, London CIV, Wales Pension Partnership, Greater Manchester Pension Fund, Merseyside Pension Fund, and PUBLICA. More than 100 individual shareholders also supported the filing.

This page contains the resolution and supporting statement.

Special Resolution

Shareholders direct the Company to disclose how it promotes a disciplined approach to capital expenditure in order to generate an acceptable return on capital for each new material oil and/or gas project of the Company (‘Project’).

Such disclosures shall include an explanation of whether and how the Company:

1. assesses the relative cost competitiveness of each Project;
2. accounts for cost overruns and delays in project schedules; and
3. demonstrates how continued exploration capex creates value for shareholders.

These disclosures shall be made, to all Shareholders, by no later than the 2027 Annual General Meeting and shall include the principal criteria, data sources, methodologies and assumptions used to underpin these claims with reasonable detail, but without disclosing any specific matters which are commercially sensitive.

Supporting Statement to Special Resolution

This proposal seeks enhanced disclosure for BP shareholders, allowing them to better assess whether and how the company’s investment decision-making promotes disciplined capital allocation.

Shareholders have legitimate reason to question BP’s approach to capital allocation due to its long-term relative underperformance, even within a materially underperforming sector. The MSCI World Energy Index has delivered 116% lower returns than the MSCI World Index over the last ten years and lower returns than all bar one other MSCI sector. BP has further underperformed the MSCI World Energy Index over three, five, ten, 15 and 20 years.^[1]

Against this backdrop, it is further cause for concern to shareholders that the Company now plans to grow its upstream investment. From 2022 to 2024, BP allocated $9 billion^[2] p.a. of capex to its upstream business, which is about 60% of its total capex.^[3] Following the strategic reset announced at the 2025 Capital Markets Day (CMD), this is due to increase to around $10.5 billion p.a., or 75% of all capex.^[4]

A disciplined approach to capital expenditure is critical to ensuring that the Company limits its investment to projects that provide adequate returns to shareholders in the future. While the Company acknowledges the importance of capital discipline, it is unclear how this is being integrated into upstream investment decision-making. The disclosures sought by this shareholder proposal therefore aim to provide greater clarity.

There is no one way to ensure a disciplined approach to capital expenditure, rather it is important that the Company demonstrates to shareholders how, across a broad range of approaches, profitability is prioritised. Currently, the Company primarily relies on commodity price assumptions and hurdle rates to demonstrate its resilience. However, the prices currently applied in the investment framework are 16% above the forward market price.^[5] As such, this proposal seeks to improve disclosure of the company’s approach to capital discipline with particular reference to three key elements of the investment framework.

Cost-competitiveness

A pre-FID project’s position on the cost curve is an important measure of its resilience and competitiveness in a global, liquid market. Projects higher on the cost curve are at higher risk of value erosion under a lower price environment. BP’s current disclosures do not indicate how the Company’s capex decisions account for a project’s relative cost-competitiveness. This is despite a shareholder proposal supported by BP and over 99% of its shareholders in 2019,^[6] which stated in the supporting statement that the Company should consider the “potential return on investment and consideration of their competitive positioning” when making FID on new material oil and gas projects.^[7]

ACCR research finds that BP’s gas assets are, on average, more expensive than 76% of global pre-FID supply, and its pre-FID oil assets are more expensive than 53% of global pre-FID supply.^[8] This indicates a significant risk of value erosion for shareholders by BP sanctioning projects that are not competitively advantaged, suggesting a need for greater transparency from the company as to how it assesses project competitiveness when making FIDs. More recently, the sanctioning of the $5 billion Tiber project is a demonstration of the salience of this risk, with this project being more expensive than 81% of all unsanctioned oil projects, according to data from Rystad.^[9]

Project execution

Research consistently shows that poor project execution is prevalent in the oil and gas sector, with studies indicating that projects range from an average of 17% to 59% over budget.^[10] It is not clear from BP’s disclosures:
a) whether its track record of project execution is in line with its industry;
b) how project execution assumptions based on its track record are integrated into investment decision-making.

If BP’s investment framework does not use realistic assumptions about the prospects of its projects incurring cost and schedule overruns, this could cause it to systematically overvalue pre-FID projects. ACCR’s research shows that if BP is not integrating assumptions around project execution, such as cost overruns and project delays, then it could be overvaluing its conventional pre-FID assets by 40%.^[11]

Exploration

Over the past three years, BP has spent an average $1.4 billion per year on conventional exploration,^[12] and at its 2025 CMD it announced a plan to "reload the exploration hopper”.^[13] Yet BP's rationale for continued exploration capex is unclear when viewed against the long-term, global trends in oil and gas exploration; and against its own exploration track record.

It is more important than ever that shareholders have good oversight of exploration expenditure. Since 2000, the average dollar that the oil and gas industry has spent on conventional exploration has eroded 71 cents (ACCR analysis of Rystad Energy data).^[14] BP's conventional exploration has become less successful and more expensive over time, with ACCR research showing that the Company’s conventional exploration success rates have halved for licenses awarded since 2010, while its discovery costs have been growing.^[15]

It is not clear from BP’s disclosures whether the Company’s investments in exploration perform any better than the sector, or whether its exploration capex creates or erodes value for shareholders.