BP to reduce renewable investments, increase oil and gas costs with serious strategy changes

• The BP said this would increase the annual oil and gas costs to $ 10 billion and reduce the planned annual investments in energy transition by more than $ 5 billion.
• The energy company seeks to increase the profits and profitability of shareholders and regain the trust of the investors after its peers surpassed.
• BP is the latest energy company that switched attention from “green energy” to fossil fuels.

The BP has reduced the planned investments into renewable energy sources and stated that on Wednesday, which will increase the annual oil and gas costs to $ 10 billion, in the main change in the strategy aimed at raising the profit and profitability of shareholders.

The oil company has reduced the planned annual investments in energy business by more than $ 5 billion, from the previous forecast to $ 1.5 billion to $ 2 billion a year.

This is the last big Company in the energy sector To change your position in response to the need to reduce carbon emissions and climate change, returning oil and gas.

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BP is currently aimed at growing oil and gas production up to 2.3 million and 2.5 million barrels of oil equivalent per day (BOEPD) in 2030. In 2024, it fired 2.36 million.

“This is a radical shift,” said CEO Murray Yichinklos in a telephone interview after the announcements during the company’s capital market.

Under the predecessor of Auchincloss, Bernard Luni, BP promised to reduce oil and gas by 40%in 2020, while renewable sources are growing rapidly by 2030. In 2023, it reduced this goal to 25%.

BP logo can be found outside the gas station on September 23, 2021 in London, England. (Photo by Leon Neal/Getty Images) ((Photo by Leon Neal / Getty Images) / Getty Images)

Auchincloss said the transition to renewable energy was slower than it was expected that after the war in Ukraine, pandemic, volatile energy markets, and changes to renewable energy sources in some countries.

“This meant that the demand for hydrocarbons still remains very, very strong, stronger than we could foresee five years ago, and the transition did not continue at the pace we would think,” he said.

BP seeks to regain the confidence of investors after insufficient work of their peers and is subjected to additional pressure to make transformation after Activist Investor Elliott Investment Office Built a stake in the company.

“The three big things we did: reducing Capex, reducing costs, significant getting rid of cash flow and refund results,” Auchincloss said.

“We will be very selective in our investment in the transition, including through innovative capital platforms. This is a BP reset with an unwavering focus on the growth of the long -term shareholder value.”

The BP plans to increase the dividend at least 4% per share annually and expects the ransom in the first quarter of $ 750 to $ 1 billion, which is reduced compared to the previous forecast of $ 1.75 billion.

It is aimed at spending $ 13 to $ 15 billion annually by 2027, reducing from $ 1 billion to $ 2024, and 2025 capital expenses are expected to be about $ 15 billion.

BP shares fell approximately 1.7% by 1258 GMT, while a wider energy index .FTNMX6010 was slightly lower.

“Updated recommendations aimed at all expectations, however, we believe that CAPEX’s reduction was less material than many investors, as we suggested, while in the near future the return of shareholders for BP is now lower than peers,” RBC said Capital Markets Capital Markets Analyst Biraj Borkhataria.

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“For us, most of the release appears to be a BP that makes the right long -term calls, but maybe not please investors today,” Borkharia added.

The BP also stated that by 2027 he was considering his business bizes, Castral and focusing on $ 20 billion.

He plans to attract 50% partner for Its solar businessLightsource BP, with the sale process is expected in the next few months.