As part of its strategy’s “basic reset”, BP has stopped all investment in renewable energy. [emphasis, links added]
As part of a bid to renew the focus on fossil fuels, The BP giant said it would sell its 10 U.S. onshore wind farms and sell its offshore wind assets from Japan's Jera Co. in a separate business.
The strategy changes are The company's profit fell from $13.4 billion (£10.9 billion) in 2023 to $8.2 billion last year's last year's profits from $13.4 billion (£10.9 billion) in 2023 to $8.2 billion last year This has resulted in BP reducing its performance-related bonuses to 45%.
“We have completely beheaded renewable energy.” CEO Murray Auchincloss said he added BP increased oil and gas production by 2% last year.
This comes after the company recently targeted by the U.S. hedge fund Elliott Management, which is known for winning stakes in the company and asking them to break up or sell assets.
Mr Auchincloss said he will provide more details on the BP reset on the date of Capital Markets Day later this month.
He said: “We have been reshaping our portfolios – approving new major projects and focusing on investing – and making huge progress in reducing costs.
“Building on the actions taken in the past 12 months, we now plan to fundamentally reset our strategy and drive further improvements in performance to serve the growing cash flow and return.”
This means the company has stopped investing in about 30 projects that will generate uncertain profits rather than targeting the 10 most profitable projects.
Among them is in Kaskida in the Gulf of Mexico, BP drilled over 35,000 feet in the seabed to enter one of the largest new oil fields in the region.
Another is the $7 billion Tangguh project in Bapua Barat, Indonesia. Significant investments in Iraq are also planned and reconstructions are carried out in the oil fields around Kirkuk, where India, BP will help develop the country's largest offshore oil field.
The reshuffle also led to BP expanding its investment in low-carbon energy and biofuel projects.
This marks the end of the legacy left by former BP boss Bernard Looney, who was forced to quit in 2023 after failing to reveal his relationship with his colleagues.
Mr Rooney admitted that after he quit, he was not “completely transparent” about his past relationship.
Under Mr. Rooney, BP actively transfers to green energy by increasing investment in solar and wind, It also promises to significantly reduce oil and gas production.
This has led to BP's favor for investors in recent years, with its share price falling by more than 9% over the past year. This is compared to the 6.5% increase in competitor shells.
Mr Auchincloss said Restructuring will be “a new direction for BP”, Although analysts have predicted how Elliott seeks to impact strategies.
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