Oil major BP to slash renewable spending and double down on fossil fuels in strategy reset

Oil major BP to slash renewable spending and double down on fossil fuels in strategy reset


The BP logo is displayed outside a petrol station on January 30, 2025 in Warrington, United Kingdom.

Nathan Stirk | Getty Images News | Getty Images

British oil major BP on Wednesday announced plans to increase annual oil and gas investment to $10 billion through 2027 as part of a fundamental strategic reset.

The beleaguered energy giant also said it planned to lower its annual capital expenditure to sit within a range of $13 and $15 billion over the same time horizon, while targeting $20 billion in divestments by the end of 2027.

The oil major said investment in transition businesses would be “significantly lower” over the coming years. The firm said spending is now likely to come in at $1.5 billion to $2 billion per year — more than $5 billion per year below the previous guidance.

“Today we have fundamentally reset bp’s strategy,” BP CEO Murray Auchincloss said in a statement.

“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,” he added.

BP is poised to outline further details of its new direction at its Capital Markets Update on Wednesday afternoon.

An investor day presentation, which will be hosted by Auchnicloss and other members of the firm’s leadership team, is scheduled to take place from 1 p.m. London time.

Analysts have described BP’s investor day as a pivotal moment for the firm, particularly after it emerged that activist investor Elliot Management had built a stake in the oil major.

BP’s Auchnicloss, who took the helm on a permanent basis in January last year, is under significant pressure to reassure investors that the company is on the right track to improve in its financial performance.

The London-listed firm has lagged its industry rivals in recent years, as investors have continued to question the firm’s strategic direction.

Shares of BP fell 2% on Wednesday.

‘Shocking but not surprising’

Lindsey Stewart, director of investment stewardship and policy at Morningstar Sustainalytics, said Wednesday that BP’s decision to reduce capital expenditure on renewables and double down on its fossil fuel assets “will be shocking but not surprising to investors focused on sustainability.”

He added that “having already cut back its energy transition targets in 2023, BP’s subsequent underperformance compared with peers has created pressure for BP management to focus on sustainability of a financial rather than ecological nature.”

Reuters on Monday reported that BP is poised to abandon its target to increase renewable generation 20-fold by 2030, citing two unnamed sources close to the matter. A spokesperson for the company declined to comment when contacted by CNBC.

Five years ago, BP became one of the first energy giants to announce plans to cut emissions to net zero “by 2050 or sooner.” As part of this push, BP pledged to slash emissions by up to 40% by 2030 and to ramp up investment in renewables projects.

The company scaled back this emissions target to 20% to 30% in February 2023, saying at the time that it needed to keep investing in oil and gas to meet global demand.



Source

India to maintain Russian oil imports despite Trump threats, government sources say
World

India to maintain Russian oil imports despite Trump threats, government sources say

Russia’s President Vladimir Putin (R) speaks with India’s Prime Minister Narendra Modi (L) during a visit to the shipyard Zvezda, as Rosneft Russian oil giant chief Igor Sechin (C) accompanies them, outside the far-eastern Russian port of Vladivostok on September 4, 2019, ahead of the start of the Eastern Economic Forum hosted by Russia.  Alexander […]

Read More
U.S. envoy tells Israeli hostage families he is working on plan to end Gaza War
World

U.S. envoy tells Israeli hostage families he is working on plan to end Gaza War

U.S. envoy Steve Witkoff (L) arrives to meet families of Israelis held hostage by Palestinian militants in the Gaza Strip since October 2023 as they demonstrate in Tel Aviv’s ‘Hostage’ square on August 2, 2025. Witkoff met the anguished families as fears for the captives’ survival mounted almost 22 months into the war. – | […]

Read More
How Florida quietly surpassed California in solar growth
World

How Florida quietly surpassed California in solar growth

Solar energy is booming across the U.S. and, for the first time, Florida is catching up to industry powerhouses Texas and California. Despite removing climate change from its official state policy in 2024, Florida added more utility-scale solar than California last year, with over 3 gigawatts of new capacity coming online.  “This is not a […]

Read More