BP’s boss will tomorrow ditch the target to ramp up the group’s renewable energy capacity as he presents a make-or-break strategy update. Murray Auchincloss will announce that the FTSE 100 energy giant is switching its focus back to fossil fuels amid mounting pressure from investors over its earnings and share price performance.
The latest change will see BP abandon its target of growing renewable energy generation 20-fold between 2019 and 2030, sources told the Reuters news agency. BP declined to comment. Auchincloss has promised a root-and-branch overhaul of strategy, moving away from a shift towards green energy launched by his predecessor Bernard Looney.
Under Looney, BP had aimed to slash oil and gas production by 40 per cent by 2030 as the focus moved instead to renewable energy sources such as windfarms. Pressure: BP boss Murray Auchincloss (pictured) will announce that the FTSE 100 energy giant is switching its focus back to fossil fuels.
But those radical plans unsettled investors. And after Looney departed in 2023 after scandal over past relationships with colleagues, pressure mounted on BP to change course. The firm has already scaled back the oil and gas cut target to 25 per cent – though some investors want it to be ditched altogether.
Looney also aimed to increase renewable generating capacity from 2.5 gigawatts (GW) in 2019 to around 50GW in 2030. One gigawatt is enough to power 1m homes and BP has 8.2GW of renewable capacity. Tomorrow’s update is expected to see the 2030 target ditched.
The long-awaited capital markets update is seen as a critical moment in the company’s 116-year history. At stake is whether shareholders can be convinced that it can thrive under Auchincloss’s leadership – or lose patience and leave it vulnerable to a takeover.
Auchincloss is also expected to use the event to scrap a target to reach underlying earnings of £39billion this year and instead set an annual percentage growth target. BP will also make public plans to sell assets and cut low-carbon investments to reduce debt and boost returns to shareholders.
Options include spinning off and floating BPX, its US shale division, offloading lubricants business Castrol and leaving the retail electric vehicle charging market. Pressure on Auchincloss intensified after the company recently revealed that annual profits fell by a third last year.
