BP drops climate targets in pivot back to oil and gas

Oil- and gas spending will increase to $10 billion annually, according to oil-focused company BP, which has cut planned investments in renewable energy.

In response to the need to lower carbon emissions and stop climate change, it is the most recent multinational in the energy sector to shift its focus to oil and gas.

BP’s carbon-cutting target, announced in 2020, however, had stood out at the time as one of the most ambitious in the industry.

“It’s a radical shift”, CEO Murray Auchincloss told the Reuters news agency on Wednesday.

“This is a reset BP, with an unwavering focus on growing long-term shareholder value”, he said, according to The Associated Press news agency.

The British company cut its previous forecast for planned annual investment in energy transition businesses by between $ 1.5 billion and $ 2 billion.

In 2030, it wants to increase its oil and gas production by between 2.3 million and 2.5 million barrels of equivalent per day (boepd). It pumped 2.36 million boepd in 2024.

Under Auchincloss’s predecessor, Bernard Looney, BP pledged in 2020 to cut oil and gas output by 40 percent while rapidly growing renewables by 2030. That goal was dropped to 25% by 2023.

Following the war in Ukraine, the pandemic, volatile energy markets, and changing attitudes toward renewable energy in some nations, Auchincloss said the transition to renewable energy has been slower than BP had anticipated.

He said that the transition has not taken place at the expected pace, but hydrocarbon demand is still very, very strong and stronger than we would have anticipated five years ago.

The CEO told investors following the release of the update that the company’s faith in the green energy transition was “misplaced” and that the company went “too far, too fast” in recent years.

Demand for oil and gas, he added, will be “needed for decades to come”.

However, he said renewables still pose a “significant opportunity” and confirmed that the company still wants to meet net-zero carbon emissions by 2050.

BP’s change of strategy is facing backlash from environmental campaigners.

“This action by oil giant BP shows why super-rich corporations and individuals who are pursuing short-term profits for themselves and their shareholders cannot be trusted to solve the climate crisis or initiate the transition to renewable energy that we so desperately need,” said Matilda Borgstrom, a campaigner for climate action group 350.org.

“BP is so eager to please everyone that investing in more oil and gas raises the risk of climate impacts for us all, flies in the face of legal climate targets,” she continued.