BP is dramatically scaling back its energy transition plans, cutting investment in renewables while ramping up oil and gas spending after a 35% drop in annual profits to $8.9bn. The move reflects investor concerns over weak returns in low-carbon sectors, prompting BP to refocus on higher-margin fossil fuel projects.
The company will now allocate $10bn per year to upstream oil and gas projects, targeting production levels of 2.3 to 2.5 million barrels per day by 2030. In contrast, investment in biogas, biofuels, EV charging, and hydrogen/CCS will be reduced to $1.5bn to 2bn per year. This is more than $5bn below previous targets.
BP is also reviewing its Castrol lubricants business and may sell up to $20bn worth of assets by 2027, including stakes in renewables-focused Lightsource BP. It aims to cut annual capital expenditure to $13bn to 15bn and deliver $4bn to $5bn in structural cost reductions by the end of 2027.
CEO Murray Auchincloss said BP was now prioritising “highest-returning businesses” and improving financial efficiency.
BP’s shift aligns with a broader trend, as energy policy tilts back toward fossil fuels, particularly in the US. The new Trump administration has raised expectations of further LNG project approvals and fossil fuel-friendly policies. Trump has also promoted the use coal as a backup for natural gas in power generation.
BP’s increased focus on LNG was underscored by the recent launch of production at the Greater Tortue Ahmeyim (GTA) LNG project on the maritime border of Mauritania and Senegal. The first phase of the project is expected to produce 2.3 million tonnes of LNG annually. BP and Kosmos Energy are jointly developing the offshore field, which contains gas reserves at depths of up to 2,850 metres.
Additionally, BP has commenced LNG production from Mozambique’s Coral Sul FLNG facility, the country’s first LNG project, expected to produce 3.4 million tonnes of LNG annually under a long-term BP supply contract.
The company has also approved a $7bn expansion of its Tangguh LNG facility in West Papua, Indonesia, unlocking an additional three trillion cubic feet of natural gas resources. The expansion includes Indonesia’s first carbon capture and storage facility to enhance gas recovery.
