BP to slash renewable investments, double down on oil and gas

BP is set to announce a major strategic shift, slashing its investments in renewable energy while ramping up oil and gas production.

The move comes amid pressure from investors frustrated by the company’s lagging profits and share performance compared to its rivals.

At an investor day in London on Wednesday, the energy giant is expected to confirm it will cut investments in renewables by more than half in what chief executive Murray Auchincloss has described as a “fundamental reset.”

The decision effectively abandons BP’s previous commitment to reducing oil and gas production by 40% by 2030—a target that was already lowered to 25% in 2023.

BP’s shift aligns with broader industry trends. Shell and Norwegian firm Equinor have already scaled back their green energy ambitions, while former U.S. President Donald Trump’s “drill baby drill” rhetoric has encouraged renewed investment in fossil fuels.

However, the decision is sparking concerns among environmental groups and some shareholders. According to the BBC, a coalition of 48 investors has demanded a vote on any significant changes to BP’s renewable commitments. Royal London Asset Management, one of the signatories, said: “As long-term shareholders, we recognise BP’s past efforts toward energy transition but remain concerned about the company’s continued investment in fossil fuel expansion.”

Greenpeace UK has also issued a warning, stating BP will face “pushback and challenge at every turn if it doubles down on fossil fuels.” Senior climate adviser Charlie Kronick emphasized that policy shifts and extreme weather events would likely lead governments to seek fossil fuel profits to fund climate disaster recovery. “BP might want to seriously put the brakes on this U-turn,” he cautioned.

Financial pressure

Financial pressure appears to be a driving factor. BP’s net income dropped to $8.9 billion in 2024, down from $13.8 billion the previous year. Since 2020, BP shareholders have seen total returns of 36%, trailing behind Shell’s 82% and Exxon’s 160%.

Some analysts speculate BP could become a takeover target or consider relocating its stock market listing to the U.S., where oil and gas firms enjoy higher valuations.

BP has already placed its offshore wind business in a joint venture with Japanese company Jera and is seeking a partner for its solar division. Insiders suggest further sales of non-core assets could follow.

It has been more than two decades since former BP chief executive Lord John Browne rebranded the company as “Beyond Petroleum.” Today’s strategy reversal might be best described as “Back to Petroleum” – a move welcomed by some shareholders but met with unease by others.