BP abandons inexperienced power drive by slashing renewables finances and ploughing further £8bn into oil and gasoline
BP sparked a furious backlash after it ditched environmental targets and vowed to plough more money into oil and gas production.
In a major update seen as a make-or-break moment for the British oil giant, it announced plans to slash spending on green energy by over £4bn per year to just £1.6bn in a screeching reversal on its previous plans to focus on renewables.
Instead, the company said it would pump nearly £8bn into fossil fuel extraction each year, a £1.6bn increase.
BP boss Murray Auchincloss said the oil firm needed to ‘fundamentally reset’ its strategy in order to ‘drive growth’ by focusing on its most profitable businesses.
‘We’ve put together something that’s very compelling,’ Auchincloss told Bloomberg, adding: ‘I think in the long run investors will love this.’
But the announcement – which followed pressure from shareholders – sparked outrage among environmental campaigners with Greenpeace arguing it was ‘positive proof that fossil fuel companies can’t or won’t be part of climate crisis solutions’.
BP chairman Helge Lund said the overhaul was designed to reflect ‘significant changes we have seen in energy markets’ and to ensure the firm was able to provide ‘energy to the world today and tomorrow’.
Alongside plans to boost investment in oil and gas, BP also said it would slash spending by up to £4bn over the next two years.
BP are facing widespread criticism from environmental activists over its plans to slash green energy spending
BP boss Murray Auchincloss (pictured) said the oil firm needed to ‘fundamentally reset’ its strategy in order to ‘drive growth’
BP will now instead plough additional funds into its oil and gas production
The oil firm’s move is a huge blow to energy secretary Ed Miliband’s green agenda as BP joins a growing list of businesses rowing back their previous plans to focus on renewable energy and lowering emissions.
It is also a sharp reversal from the actions of Auchincloss’s predecessor Bernard Looney, who five years ago promised to cut BP’s oil and gas output to 1.5m barrels per day and make it a net zero emissions company by 2030.
Now, under the new strategy daily production is set to be up to 2.5m barrels by the end of this decade.
The decision sparked a fierce backlash from green campaigners.
‘While the world is reeling from fossil-fuel driven extreme weather, BP is widely expected to double down on the oil and gas creating climate breakdown,’ said Alexander Kirk of climate change group Global Witness.
He also accused BP of ‘focusing on short-term profits to shareholders while energy prices are high’.
Charlie Kronick, senior climate adviser for Greenpeace UK, said: ‘This is positive proof that fossil fuel companies can’t or won’t be part of climate crisis solutions; this conversation is over.
‘The UK is seeing more and more storms and floods – with people’s lives, homes, or businesses ruined. Responding to the climate crisis can’t be driven by the whims of investors or the markets.’
BP chairman Helge Lund (pictured) defended the firm’s decision by saying it ensured they could provide ‘energy to the world today and tomorrow’.
The oil firm’s move is a huge blow to energy secretary Ed Miliband’s (pictured) green agenda
Matilda Borgström, a campaigner at climate 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.’
She added: ‘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.’
City analysts said BP’s decision to double down on fossil fuels was ‘shocking but not surprising’.
Lindsey Stewart, director of stewardship research and policy at Morningstar Sustainalytics, said the company had come under pressure from its investors to ‘focus on sustainability of a financial rather than ecological nature’.
Analysts at investment bank RBC Capital Markets added that while the new strategy ‘may not please investors today’ BP was ‘making the right calls for the long term’.
BP has been under growing pressure from shareholders in recent years to row back on its green pledges as its value has declined while rivals such as Shell and America’s Exxon, which have not committed as strongly to renewables, have surged.
Mr Auchincloss and the rest of BP’s management are also being threatened by US hedge fund Elliot Management, an activist which has built up a significant stake in the business and is expected to demand sweeping changes, including potentially breaking up the 120-year-old company.
BP’s update comes after the planet exceeded the 1.5C global warming threshold in the year to May 2024.
But it comes as US President Donald Trump’s promise to ‘drill, baby, drill’ encourages the oil and gas giants to focus more on fossil fuels.
