BP today unveiled a massive strategy U-turn with a new emphasis on oil and gas investment and a massive downgrade of its commitment to renewable energy. Under pressure chief executive Murray Auchincloss said oil and gas investment will be increased to around $10 billion a year while investment in renewable business will be cut by more than $5 billion a year to $1.5 to £2 billion.
The company also said it was reviewing its lubricants business, Castrol, and targeting $20 billion in divestments by 2027. Chief executive Murray Auchincloss said: "Today we have fundamentally reset bp's strategy. We are reducing and reallocating capital expenditure to our highest-returning businesses to drive growth, and relentlessly pursuing performance improvements and cost efficiency. This is all in service of sustainably growing cash flow and returns.
"We will grow upstream investment and production to allow us to produce high margin energy for years to come. We will focus our downstream on markets where we have leading integrated positions. And we will be very selective in our investment in the transition, including through innovative capital-light platforms. This is a reset bp, with an unwavering focus on growing long-term shareholder value.".
Shell and Norwegian company Equinor have already scaled back their plans to invest in green energy. Meanwhile US President Donald Trump's "drill baby drill" comments have encouraged investment in fossil fuels and a move away from low carbon projects. Five years ago, BP set some of the most ambitious targets among large oil companies to cut production of oil and gas by 40% by 2030, while significantly ramping up investment in renewables.
Global Witness campaigner Alexander Kirk said: “A few years ago BP undertook a massive public relations campaign to tell the world it was going green, highlighting its renewable energy investments.". “Now, while the world is reeling from fossil-fuel driven extreme weather, BP is widely expected to double down on the oil and gas creating climate breakdown.".
“So why the U-turn? BP appears to be focusing on short-term profits to shareholders while energy prices are high, with the rest of the world picking up the tab from its climate-wrecking products.". “This is a company that cannot be trusted to deliver the clean energy transition. Fossil fuel companies like BP must be forced to pay for the climate damages they cause.”.
