By the panpira
LONDON (AP) – British Energy Company BP on Wednesday confirmed it will cut spending on green ventures and increase oil and gas production.
In a statement entitled “Reset BP,” the company said it would cut its spending on its net zero transition business to $5 billion a year to up to $2 billion. In contrast, he said investments in oil and gas production would increase by around 20% to $10 billion.
CEO Murray Auchincloss said the company is focusing on BP’s “highest revenue business to drive growth” and will be “very selective” in investing in renewable energy.
“This is a reset BP and it has an unwavering focus on expanding long-term shareholder value,” he said.
The strategy represents a pullback from the company’s highly hampered plan to reduce oil and gas production in favour of a net zero business five years ago under then CEO Bernard Looney.
Auchincloss has told investors that the company’s belief in Green Energy’s transition has been “misguided” after the release of the update, and in recent years it has been “too far, too fast.” He added that oil and gas demand will be “needed for decades to come.”
However, he said renewables still present “significant opportunities” and confirmed that the company still wants to meet its net zero carbon emissions by 2050.
“We need to reduce global carbon emissions and are looking for more energy, as well as countries, businesses and customers are looking for low carbon products and services to support their own decarbonization objectives,” he said.
The update is intended to enhance investor support in light of the company’s flagged stock price.
So far, the update appears to have not appealed to investors, with the company’s share price falling 1.4% in mid-afternoon Wednesday. However, the retreat could represent more than the profits of some investors, following recent weeks of rallying over speculations that the company is about to change its tack.
The stock shortages for colleagues over the past few years, including Shell, Exxonmobil and Chevron, have surprised market speculation that BP could move its share list from London to New York or become an acquisition target.
Influential US hedge fund Elliot Management recently acquired a stake in BP of nearly 5%. It is believed that they are seeking to push BP back into fossil fuels and make profits.
Auchincloss is already spinning BP’s offshore wind business in a joint venture while it is trying to offload its onshore wind farms. The group is cutting costs in the face of tougher trading. Recently, it announced it would cut more than 5% of its workforce.
The change in BP’s strategy has faced acute criticism from environmental activists. Environmental campaigners have previously been warmed by the company’s claim that the future is environmentally friendly.
“This move by oil giant BP is clearly showing why it is not reliable in chasing short-term profits for itself and its shareholders, stabilizing the climate crisis and leading to the transition to renewable energy that we are in a terrible need.
“Powering money into more oil and gas increases the risk of climate impact for all of us and flies in the face of legal climate targets. And when the renewable energy sector increases exponentially, it’s a huge risk that BP is eager to be happy,” she added.
Original issue: February 26, 2025, 1:34pm
