BP windfarms placed on maintain as oil large doubles down on fossil fuels

The new boss of BP has watered down the oil giant’s green energy plans following investor pressure.

In major strategy shift, Murray Auchincloss has put new offshore wind projects on ice as it focuses on oil and gas.

It is a stark change from the policies of disgraced ex-chief executive Bernard Looney, who had pushed for a rapid move away from fossil fuels.

That has weighed on BP’s share price and widened the gap with rival Shell – raising speculation it could become a takeover target.

While BP shares have fallen more than 10 per cent in the past five years, Shell is up 10 per cent while Chevron, Exxon Mobil and Total Energies have made even larger gains.

Eco blow: In major strategy shift, BP boss Murray Auchincloss (pictured) has put new offshore wind projects on ice as it focuses on oil and gas

Auchincloss is stamping his authority on BP, having succeeded Looney last year.

He last month unveiled a £1.6billion cost-cutting plan after profits missed expectations in the first quarter of this year.

He will now slow investment in big budget, low-carbon projects that are not expected to generate cash for years.

Some workers on new renewables projects have been moved to schemes already under way, such as offshore wind in Britain and Germany.

And the FTSE 100 firm will prioritise investing in and acquiring new oil and gas assets, eyeing projects in the Gulf of Mexico and in US onshore shale basins where BP already has large operations.

BP will also consider investing in biofuels and some low-carbon businesses that can generate returns in the short term.

It is plotting job cuts in renewables, although no specific targets have been given.

BP has imposed a company-wide hiring freeze, with only a few exceptions including frontline and safety staff.

Auchincloss, 53, took the top job after Looney was forced to resign amid a scandal over undisclosed relationships with colleagues.

BP said: ‘We are going to deliver as a simpler, more focused and higher value company. 

‘We set out six priorities that underpin this; including: driving greater focus into the business on to activities that create the most value, as well as delivering both the next wave of efficiencies and BP’s growth projects.

‘The actions we are taking are part of delivering this, in service of our aim of growing the value of BP.’

Russ Mould, investment director at AJ Bell, said Auchincloss has come under pressure to ‘take radical action with a diminished BP at risk of falling prey to a larger predator’.

‘The motivation for taking the route of a slower energy transition might be to secure a better valuation from the market, more in line with US peers which have not made the same kind of environmental commitments,’ he said.

‘In doing so, Auchincloss is following the path forged by his counterpart at Shell, Wael Sawan. These decisions could go down well with investors in the short-term but could store up longer-term problems.’