BP is almost doubling its target for oil and gas production by the end of the decade and slashing its spending on low-carbon energy as part of a fundamental reset of the troubled company away from previous green goals.
The FTSE 100 fossil fuel company has promised shareholders it will increase its planned oil and gas production by 2030 to the equivalent of about 2.4m barrels a day – almost twice the figure in its net zero plan set out five years ago.
BP’s chief executive, Murray Auchincloss, added that it would be “very selective” about investing in low-carbon options, slashing more than $5bn (£4bn) from its previous green investment plan to take it down to between $1.5bn and $2bn.
“Today we have fundamentally reset BP’s strategy,” Auchincloss said. “This is a reset BP, with an unwavering focus on growing long-term shareholder value.”
The move back towards fossil fuels represents a stark shift from the investment plan put forward five years ago by the former chief executive Bernard Looney. He had promised to shrink the company’s fossil fuel production to about 1.5m barrels a day and make BP a net zero energy company by 2050.
Auchincloss said BP would instead focus on strengthening its production portfolio by starting up 10 major oil and gas projects by 2027 and a further eight to 10 projects by the end of the decade.
The strategy reset has come amid growing pressure from shareholders to shrug off its green pledges, which initially won praise from green groups but have since been diluted as BP’s share price has suffered.
BP has lost almost a quarter of its market value in the past two years while the market value of its rivals Shell and ExxonMobil has increased as they pursue greater oil and gas production.
The company also faces an existential threat from the activist hedge fund Elliott Management, which in recent months has amassed a stake in the oil company worth almost £3.8bn, or 5% of its shares.
The New York hedge fund is widely expected to use its grip on the 120-year-old company to demand sweeping changes, including a potential breakup of the company, to rescue its flagging market value.
The dismantling of Looney’s green agenda will come alongside a plan to cut BP’s growing debt pile from almost $23bn at the end of last year to between $14bn and $18bn by the end of 2027.
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The company plans to sell off $20bn worth of assets, potentially including its Castrol lubricants business, its network of service stations and the solar power developer Lightsource BP, while trimming up to $3bn from its overall investments and cutting up to $5bn in costs from across the company by the end of 2027.
Matilda Borgström, a campaigner at the climate action group 350.org, said: “This move by oil giant BP clearly demonstrates why super-rich corporations and individuals, chasing short-term profit for themselves and shareholders, cannot be trusted with fixing the climate crisis or leading the transition to renewable energy we so badly need.
“Pumping money into more oil and gas increases the risk of climate impacts for us all, flies in the face of legal climate targets and, with the renewables sector growing exponentially, is a big risk to the shareholders that BP is so keen to please.”
