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.
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