BP Plc, in which activist investor Elliott Investment Management has built up a nearly 5% stake, is considering a potential sale of its lubricants business, according to people familiar with the matter.

Activist investor Elliott Management has built a near 5% stake in BP and is pushing the oil company to take radical action to transform its performance, including a big divestment programme, a source familiar with the matter told Reuters on Thursday.

BP said profit fell more than expected and that it would reset its strategy, days after reports that activist hedge fund Elliott Management is pushing for change at the company.

Elliott Investment Management is demanding BP Plc make drastic cost cuts and divestments to strengthen its future as a standalone company, people with knowledge of the matter said.

BP ’s investments in low-carbon ventures added to the financial strain. The dismal results coincided with reports that Elliott Investment Management, an aggressive activist hedge fund, has taken a substantial stake in the oil giant.

BP has a laundry list of problems. The $93 billion UK oil major has a confused strategy, an overleveraged balance sheet, and a valuation way adrift of its main rivals. Given it also now has an activist investor - Elliott Investment Management - with a 5% stake,

On this episode of In the City, we discuss what set the stage for Elliott Investment Management’s interest in the embattled oil giant.

BP announced plans to "fundamentally reset" its strategy Tuesday as Elliott Investment Management reportedly has taken a "significant" stake in the British oil giant.

BP reported quarterly profit of $1.17 billion on Tuesday, weaker than expected and the lowest in four years, while the company promised to reset its strategy, after news broke at the weekend that investor Elliott Management had built up a stake.

Activist hedge fund Elliott Management has become BP’s third-largest shareholder after building a near-5 per cent stake worth almost £3.8bn, as it seeks to force the troubled UK oil major to cut spending on renewables and make big divestments,

Several BP Plc shareholders said they welcome activist Elliott Investment Management taking a stake in the British oil major because the company needs to make meaningful changes.

BP Plc CEO Murray Auchincloss insisted that the company’s “fundamental reset” has been in the works for a year, while refusing to comment on an analyst’s question about whether he’s had engagement with activist Elliott Investment Management.