BP to slash renewables investment and ramp up gas and oil production.
Five years ago, BP set some of the most ambitious targets among large oil companies to cut production of oil and gas by 40% by 2030, while significantly ramping up investment in renewables.In 2023, the company lowered this oil and gas reduction target to 25%. It is now expected to abandon it altogether while confirming it is cutting investments in renewable energy by more than half in what chief executive Murray Auchincloss called a "fundamental reset".In 2024, BP's net income fell to $8.9bn (£7.2bn) down from $13.8bn the previous year.Mr Auchincloss is under pressure to boost profits from some shareholders including the influential activist group Elliot Management, which took a near £4 billion stake in the £70 billion company to push for more investment in oil and gas.Since 2020 when former chief executive Bernard Looney first unveiled his strategy, shareholders have received total returns including dividends of 36% over the last five years. In contrast, shareholders in rivals Shell and Exxon have seen returns of 82% and 160% respectively.BP's under performance has prompted speculation that it may be a takeover target or may consider moving its main stock market listing to the US where oil and gas companies command higher valuations.
Not all shareholders want the company to change course so radically.Last week, a group of 48 investors called on the company to allow them a vote on any potential plans to move away from its previous commitments to renewables.A spokesperson for one of the signatories, Royal London Asset Management, 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."The environmental group Greenpeace UK has warned BP could expect "pushback and challenge at every turn if it doubles down on fossil fuels - not just from green campaigners but from its own shareholders".Senior climate adviser Charlie Kronick said: "Government policies will also need to prioritise renewable power, and as extreme weather puts pressure on insurance models - policymakers will be looking to fossil fuel profits as a way to fund extreme weather recovery. BP might want to seriously put the brakes on this U-turn."AJ Bell analyst Russ Mould said this was one of the most significant moments for BP in the last four or five years."Other energy companies have been clearer about their intentions thus far than BP," he said."They need to prove to people that after a difficult operational and share price performance compared to their peers, that they're looking to do something about it, not just let things drift along, he added.BP has already placed its offshore wind business in a joint venture with Japanese company Jera and is looking to find a partner to do the same with its solar business. The refocus on oil and gas could also see sales of other businesses in order to get "non-core stuff off the books" as insiders describe it. It is over 20 years since former chief executive Lord John Browne said BP could stand for "Beyond Petroleum" as he launched the company's first tentative moves away from oil and gas. Today's strategy shift could be dubbed "Back to Petroleum" - to the delight of some shareholders and to the dismay of others. Both BP and Elliott management declined to comment.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Daily Mail
22 minutes ago
- Daily Mail
Poll: How Americans feel about Trump's spending agenda
President Donald Trump 's handling of the budget has taken a big hit with voters since he signed his 'big, beautiful bill' into law. Trump successfully jammed the legislation that enshrines his signature tax cuts, but adds trillions to the national deficit, through the House and Senate earlier this month - despite Republican rebels who threatened to tank it. 'I think I have more power now,' Trump said following the bill's passage. 'More gravitas, more power.' The package extends the president's 2017 tax cuts and further eliminates taxes on tips and overtime - a marquee promise that the president pledged repeatedly on the campaign trail. It doubles the child tax credit and includes a popular $1,000 'Trump investment account' - formerly known as MAGA accounts - for newborn babies. The $3.3 trillion measure cleared Congress July 3d, with Trump declaring : 'I think I have more power now.' Also included in the measure are steep cuts to Medicaid, the Supplemental Nutrition Assistance Program (SNAP) and renewable energy programs expanded by former President Joe Biden . But Trump's support on the issue of the federal budget with Americans has dropped to just 37 percent in a new CNN / SSRS poll, with 63 percent disapproval on the issue. Back in March, Trump had 48 percent approval on the budget, with 52 percent disapproval. That comes after the White House overcame opposition from House and Senate budget hawks to pass the measure. Even then, there were signs of trouble. Just over a quarter of Americans, 28 percent, backed it in mid-June, a Daily Mail poll by J.L. Partners found . The nonpartisan Congressional Budget Office estimated that the measure will tack $3.9 trillion onto the debt – an analysis the White House disputed in part by attacking the CBO. Republicans got it through on special 'reconciliation' procedures designed for budget reduction, which allowed it to steer clear of the filibuster in the Senate. The CNN poll found that the mega-measure remains underwater with voters – with 39 percent support compared to 61 percent opposition. Democrats argued during debate that opposition would grow when Medicaid cuts and other cost-cutting measure go into effect starting in 2027, after the mid-term elections. The bill cuts Medicaid and food stamps by $1.2 trillion over a decade. Trump has stressed the tax cuts, and said failure to pass it would have amounted to a big tax hike. It also made good on some of his campaign promises such as 'no tax on tips.' Vice President JD Vance is joining the effort to sell the bill at an event Wednesday in West Pittston, Pennsylvania, not far from former President Joe Biden's childhood home in Scranton. And the White House has unveiled an interactive map to allow Americans to try to calculate how much they can save under the law. It allows Americans to enter their weekly salary, overtime pay, and tips, to calculate estimated yearly savings. It also shows state-by-state savings, but doesn't mention the CBO analysis that an estimated 16 million people could lose their healthcare by 2034. Democrats held their own event in the Louisiana district of House Speaker Mike Johnson where they called the bill 'reverse Robin Hood — stealing from the poor to give to the rich.' Trump heralded the bill by signing it on July 4th but has not organized a major campaign to promote it, telling NBC he might travel 'a little bit.' 'But honestly, it's been received so well I don't think I have to,' he said. His trip to battleground Pennsylvania on Tuesday was billed as an energy event. Trump carried the state last year. The poll of U.S. adults was conducted July 10-13, in the immediate aftermath of the dramatic fight in Congress and Trump's pressure to get it through by July 4th. Trump's own approval in the survey stood at 42 percent, with 58 percent disapproval.
Reuters
22 minutes ago
- Reuters
Dollar, Treasury prices tumble after report Trump to fire Fed's Powell
LONDON/NEW YORK, July 16 (Reuters - The dollar fell sharply on Wednesday after Bloomberg, citing an unidentified White House official, reported U.S. President Donald Trump is likely to fire Federal Reserve Chair Jerome Powell soon. The dollar fell by as much as 0.7% against a basket of major currencies in a matter of moments after the news hit, while rate-sensitive areas of the market such as U.S. regional banking shares fell and gold rallied . Longer-dated Treasuries sold off, leaving the 30-year bond yielding 5.06%, up nearly 5 basis points on the day. It had traded earlier at a low of around 4.97%, down 5 bps from Tuesday. Investors had been on edge for weeks about the prospect of Powell being removed from his job before his term ends next May, as Trump has repeatedly criticised him for not cutting U.S. rates quickly enough. COMMENTS: FRANCESCO PESOLE, FX STRATEGIST, ING, LONDON: "If we get a headline today on Powell (removal), then we are looking at much more bigger sell-off in the dollar. Federal Reserve independence is the foundation the U.S.' status as the No.1 reserve currency." "Given the implications of removing a Fed chair, the reaction is still relatively contained. Euro/dollar is at $1.17 and should be trading higher on this, because the implications are massive. Markets are still not fully pricing this all in. You would expect that if Powell is removed today, then the Fed cuts in September." CHRIS BEAUCHAMP, CHIEF MARKET ANALYST, IG, LONDON: "The news has put the dollar firmly on the back foot but has dragged stocks lower too. The Fed chairman's departure would leave the independence of the central bank in question. It seems likely that his (Trump's) recent successes in passing his tax and spending bill, and the ceasefire in the Middle East, have emboldened the president to act." "Now we will see if the bond market vigilantes will put the U.S. in their sights again. Such a dramatic move also suggests there is no backing down from tariffs this time around, especially with stocks at record highs." LEE HARDMAN, SENIOR CURRENCY ANALYST, MUFG, LONDON: "If that does happen (Trump fires Powell), it would be very damaging for investor confidence in the dollar, that's why we're starting to see the heavy selling, and it could extend further if he were to do so. "It's not clear-cut whether Trump has the power to fire Powell, so we would expect to see a legal challenge very quickly, but even if it were overruled, the hit to confidence would be long lasting, and it reinforces our bearish outlook on the dollar."
Reuters
22 minutes ago
- Reuters
Trump open to idea of firing Fed Chair Powell, source says
WASHINGTON, July 16 (Reuters) - U.S. President Donald Trump is open to the idea of firing Federal Reserve Chair Jerome Powell, a source told Reuters on Wednesday. Trump polled some Republican lawmakers on firing Powell and received a positive response, the source said.
