BP Shifts Focus Back to Oil and Gas, Scaling Back Renewable Investments
BP is set to announce a major strategic shift, cutting back on renewable energy investments while ramping up oil and gas production.
The move comes amid pressure from investors frustrated with BP’s lower profitability compared to competitors like Shell and ExxonMobil.
Under CEO Murray Auchincloss, BP is undergoing a “fundamental reset” to address shareholder concerns. Since 2020, the company has trailed rivals in total returns, prompting speculation about a potential takeover or a shift to a US stock listing for higher valuations. Activist investor Elliott Management, which has taken a significant stake in BP, has been pushing for greater investment in fossil fuels to boost returns.
BP had previously set ambitious targets to cut oil and gas production by 40% by 2030. However, in 2023, it lowered this goal to 25%, and now it is expected to abandon it entirely. Investments in renewable energy will be reduced by more than half, reflecting a broader industry trend, as Shell and Norway’s Equinor have also scaled back green initiatives.
While some investors welcome the renewed focus on fossil fuels, others remain concerned about the long-term risks. A group of 48 investors has called for a vote on BP’s strategy shift, and environmental groups like Greenpeace warn of potential backlash. Critics argue that despite short-term gains, the energy transition remains inevitable, and BP may face regulatory and reputational challenges in the future.
