London: BP said it will return to fossil fuels to boost oil and gas production, sharply cut investments in clean energy and revive flagging stock prices.
The struggling British Energy Company announced the move Wednesday as part of an update to its highly anticipated strategy aimed at attracting investors. These include activist hedge fund Elliott Management.
“We’re fundamentally resetting our BP strategy,” said CEO Murray Auchincloss. With increasing investment in the oil and gas sector, BP will be able to pump Margill’s fossil fuels for the next few years.
BP’s shares fell by about 1% in morning trading in London. Auchicloss will lay out details of its plans to bring back the energy giant in its presentation to investors later Wednesday.
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BP’s Shell, ExxonMobil and Chevron shares are behind rival Shell, ExxonMobil and Chevron shares as they took the most offensive steps by oil majors to move to low-carbon consumption sources in 2020.
Since taking the helm of BP in the fall of 2023, Auchicloss has dialed BP’s hydrogen and biofuel program, selling onshore wind businesses in the US and launched a cost-cutting drive. He also greenlighted some big oil and gas investments, ensuring quick and easy access to the barrels in Iraq and elsewhere.
However, BP struggled to reduce its debt load, and the move failed to ignite stock prices, leading to speculation among bankers, allowing it to plummet some or all of its business.
Companies in the oil-to-auto sector are struggling to pace the energy transition as governments are shaking with efforts to curb climate change. President Trump began dismantling the Biden administration’s climate-focused initiative shortly after taking office in January.
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BP has returned to some of its green commitments two years ago when it said it would produce more oil and gas than previously planned, but the strategy set for Wednesday went further.
BP said it would increase its oil and gas investment to around $10 billion a year, with the aim of increasing daily output from around 2.3 million last year to up to 2.5 million barrels by 2030. It invests up to $2 billion a year in companies targeting the energy transition, more than $5 billion lower than previously forecast.
The London-listed oil producer said it aims to sell $20 billion in assets by 2027 as part of its push to reduce its debt pile. The sale may include Castrol, BP’s lubricant business. The company says it reviews all options on the table.
Write to Joe Wallace at joe.wallace@wsj.com.
