BP has announced a major operations reset, increasing oil and gas investment to US$10 billion through 2027.
This is part of the company's plan to raise annual capital to $13-15 billion over the same period, targeting $20 billion divestment by 2027.
The plan is set to cut BP’s growing debt from almost $23 billion at the end of last year to between $14-18 billion by the end of 2027.
The overhaul will see BP be “very selective” about investing in low-carbon options while producing 2.4 million barrels of oil and gas a day by 2030 - which is a 60% increase on its net zero plans set out five years ago.
“Today we have fundamentally reset BP’s strategy,” BP’s CEO, Murray Auchincloss said.
“This is a reset BP, with an unwavering focus on growing long-term shareholder value.”
It’s a departure from the company’s previous green initiatives as they moved back to fossil fuels, a stark difference from former chief executive Barnard Looney’s plan to shrink fossil fuel emissions, produce 1.5 million barrels daily and make BP a zero energy company by 2050.
This plan that was set out five years ago also saw the company pledge to slash emissions by up to 40% by 2030. The company has since scaled this back to 20-30% in February 2023.
The company said this switch would invest in transition businesses and come in at $1.5-2 billion, $5 billion lower than previous guidance.
While there has been growing pressure from investors for BP to shrug off its green pledges, which have been diluted since the company’s share price and market value fell, activists have spoken out against the move.
A UK campaigner from 350.org, Matilda Borgström said the need for urgent action and the need for renewable energy to combat the climate crisis isn’t going anywhere anytime soon.
“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,” Borgström said.
“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, it is a big risk to shareholders that BP is so keen to please.”
At the time of writing, BP (LON: BP) stock is trading at £430.25, a 1.52% decrease from the previous close of £430.90. The company’s market cap is £69.29 billion.
