- BP abandons oil reduction plans by 2030
- Focus shifts to profitable oil and gas projects
- Net zero emissions goal remains by 2050
According to sources, BP intends to abandon efforts to reduce oil and gas production by 2030.
It is the latest retreat from the oil supermajor’s green commitments under CEO Murray Auchincloss, who is attempting to restore investor confidence in the face of disappointing share price performance and moderated energy prices.
Under former CEO Bernard Looney, BP pledged to reduce oil and gas output by 40% while raising low-carbon investments tenfold by 2030.
However, in early 2023, the oil and gas output target was reduced to 25% as COVID-related limitations were eased and the Ukraine War escalated. This sent energy prices rising and earned record profits for the oil industry.
Since then, BP has reduced spending on renewable energy and halted all new offshore wind projects due to higher-than-expected costs and shareholder pressure to generate stronger returns.
Instead, it is shifting its focus to more profitable oil and gas production, with major investments planned in the Middle East and Gulf of Mexico, according to Reuters.
According to sources, the FTSE 100 company is discussing investing in Kuwait and three new projects in Iraq, one of which is in the Majnoon field.
In August, BP inked a memorandum of understanding with the Iraqi government to develop and explore the Kirkuk oilfield, which will entail additional oil and gas investment and power generation activities.
A month before, the company announced that it would start constructing the Kaskida project in the Gulf of Mexico, with production set to begin in 2029.
However, BP still aspires to achieve net zero emissions across all of its businesses by 2050, a goal set by Bernard Looney, who resigned in September 2023 after admitting he was not ‘completely candid’ about his interactions with employees.
His successor was hired permanently in January of this year after previously serving as the company’s chief financial officer.
‘As Murray stated at the beginning of the year, the direction is unchanged – but we will deliver as a simpler, more focused, and better value organization,’ a BP spokesperson said.
Shell has also modified its climate change plans, abandoning a goal set in March to lower the net carbon intensity of its production by 45 per cent by 2035.
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It also plans to increase its liquefied natural gas business by 20 to 30 per cent by 2030, anticipating increased worldwide demand for LNG.
Russ Mould, investment director at AJ Bell, stated: “Auchincloss needs to demonstrate he has a genuine plan aside from not doing what the market does not like.”
‘If the reports are correct, the corporation could expect to face severe criticism from authorities, legislators, and environmental activists. However, this is simpler to overlook than a stagnating share price.
BP shares were 1.6% higher at 423.6p on Monday morning, making them one of the blue-chip index’s top risers.
