BP PLC (LON: BP.) shares dropped as much as 2.2% as the company confirmed its “reset” strategy, which includes increasing oil and gas investment to $10 billion annually while cutting $5 billion annually from renewables and other energy transition initiatives.
As part of its investor update, BP announced plans to reduce annual investment in renewables to between $1.5 billion and $2 billion—$5 billion less than previously allocated.
The company also abandoned its commitment to reducing oil and gas production, instead pledging to boost fossil fuel investment to $10 billion annually until at least 2027, a 20% increase.
BP expects at least 10 major projects to come online by 2027, with another eight scheduled by 2030.
The strategic shift follows pressure from activist investor Elliott Management, which has pushed for divestment from green energy and a stronger focus on the more profitable fossil fuel sector.
Previously, BP had aimed to cut oil production to 2 million barrels per day. However, on Wednesday, it revised this target to up to 2.5 million barrels per day for this decade, with the possibility of further increases by 2035.
Additionally, the company plans to sell $20 billion in assets by 2027.
BP CEO Murray Auchincloss stated, “Today we have fundamentally reset BP’s strategy.
“We will grow upstream investment and production to allow us to produce high-margin energy for years to come.
“And we will be very selective in our investment in the transition.”
He emphasized that these changes are aimed at “sustainably growing cash flow and returns.”
BP’s pullback from green energy investment represents a significant departure from the strategy set by former CEO Bernard Looney in 2020. Looney was removed in 2023 after failing to disclose personal relationships with colleagues.
