BP Shifts Focus: More Oil & Gas, Less Renewables

UK-based energy titan BP has revealed plans to reduce its spending on renewable energy, opting instead to boost investment in oil and gas production.

Investor pressure played a significant role, as shareholders expressed discontent over BP’s performance lagging behind competitors like Shell and ExxonMobil.

For instance, BP’s shares increased by 36% from the end of February 2020 until February 25, 2025, whereas Shell and Exxon saw returns of 82% and 160% respectively.

Responding to these demands, BP announced it would raise its oil and gas investment from approximately $8.5 billion per year to $10 billion, while slashing previously planned renewable funding by over $5 billion.

The company’s low-carbon capital expenditure is now set at roughly $2 billion over the next two years, marking a reduction of $10 billion from earlier projections. In 2023, BP anticipated spending $30 billion over the decade; however, it now plans to allocate only $4 billion by 2030.

BP also intends to boost production to between 2.3 million and 2.5 million barrels of oil per day (bopd) by 2030, with significant oil and gas projects expected to commence by the close of 2027.

At the company’s capital markets day, BP boss Murray Auchincloss described this move as a “reset” for the firm and admitted that BP was overly optimistic about a rapid transition. He remarked that the energy giant went “too far, too fast” in its efforts to curtail its oil and gas operations and pivot to renewables.

This strategic redirection contrasts with the earlier focus since former CEO Bernard Looney unveiled plans in 2020 to cut hydrocarbon production by 40% and ramp up investments in wind, solar, hydrogen, and other clean energy sources.

BP also unveiled plans to generate $20 billion through asset sales. Its 125-year-old Castrol business is under review for a potential divestiture, and the company is seeking a joint venture partner for its Lightsource solar business, similar to its offshore wind arrangement with Jera.

William Lin, BP’s EVP for regions, cities, and solutions, noted that the solar and offshore wind sectors have been impacted by inflation, while hydrogen investments have faced policy hurdles, higher costs, and diminished customer willingness to pay.

In addition, BP plans a 5% reduction in its workforce, affecting 4,700 employees and 3,000 contractors.

This strategic shift is not isolated to BP; both Shell and Equinor have recently announced similar plans to decrease green energy investments. The decision is partly political, especially in light of US President Donald Trump’s “drill baby drill” stance, which supports fossil fuels. The US moratorium on offshore wind further underscores the direction of Trump’s energy policies.