BP, the British energy giant, has announced a strategic pivot back towards oil and gas, reducing its investment in renewable energy. CEO Murray Auchincloss stated that the company will increase investments in oil and gas by approximately $10 billion annually, while cutting down on climate-friendly energy investments by over $5 billion each year. This decision comes as BP aims to focus on its most profitable sectors to enhance growth and long-term market value.
The move has drawn significant criticism from environmental groups like Greenpeace, which argue that fossil fuel companies cannot be part of the solution to climate change. The strategy shift is also influenced by pressure from Elliott Management, a US-based hedge fund owning nearly 5% of BP, urging a return to oil and gas investments. This reflects a broader trend among energy companies, with Shell also scaling back on offshore wind investments.
BP previously committed to reducing oil and gas production by 40% by 2030 to favor renewable energy but has now adjusted this target to a 25% reduction by 2023. The company plans to increase its oil production to 2.3-2.5 million barrels per day by 2030. Critics, including climate action group 350.org, argue that BP's focus on short-term profits undermines legal climate targets and the growing renewable energy sector.
As BP navigates these strategic changes, it aims to raise $20 billion by selling assets like Castrol and Lightsource BP. The company's decision to revert to fossil fuels, despite previous commitments to the contrary, highlights the ongoing tension between economic pressures and environmental responsibilities.
