British energy behemoth increases stakes in oil sector – FT
BP is reportedly planning to abandon its renewable energy targets and focus more on fossil fuels in an effort to restore investor confidence. Read Full Article at RT.com
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Amid pressure from investors, struggling British energy giant BP is reportedly set to abandon its renewable energy targets and concentrate more on fossil fuels, according to a Financial Times report on Tuesday.
The company is expected to unveil its strategic pivot back to oil and gas during its investor day on Wednesday, as per sources familiar with the situation.
BP CEO Murray Auchincloss has faced challenges in reversing a decline in the company's share price, which has lagged behind competitors. Since taking over in 2023, Auchincloss has been under pressure from US activist investor Elliott Management to implement measures that could help turn the struggling company around.
Elliott, which owns a 5% stake in BP, has advocated for significant cost reductions, asset divestitures, and a greater emphasis on profitability.
Sources indicated that BP is likely to announce at least one major divestment, with Auchincloss assuring that a “fundamental reset” is vital for improving the company’s performance.
According to analyst Irene Himona of Bernstein, this moment is crucial for BP. Auchincloss, who previously served as the company's chief financial officer, is closely linked to the existing strategy, which may complicate a rapid transition.
In 2020, a transformation strategy introduced by then-CEO Bernard Looney and Auchincloss pledged to cut oil and gas output by 40%, making it one of the most ambitious commitments in the sector, while also seeking to expand renewables.
However, in 2023, BP adjusted this target to a 25% reduction, prioritizing short-term returns as emphasized by investors.
On Wednesday, insiders suggest that Auchincloss may completely eliminate this target, with possible plans to divest from wind and solar assets, Castrol lubricants, and its service station network.
Himona has speculated that Auchincloss could even decide to increase BP’s oil and gas production, similar to strategies announced by ExxonMobil, Chevron, and Shell.
Currently, BP's production stands at approximately 2.3 million barrels of oil equivalent per day, a decrease from around 2.6 million barrels per day in 2019.
Sophie Wagner contributed to this report for TROIB News
The company is expected to unveil its strategic pivot back to oil and gas during its investor day on Wednesday, as per sources familiar with the situation.
BP CEO Murray Auchincloss has faced challenges in reversing a decline in the company's share price, which has lagged behind competitors. Since taking over in 2023, Auchincloss has been under pressure from US activist investor Elliott Management to implement measures that could help turn the struggling company around.
Elliott, which owns a 5% stake in BP, has advocated for significant cost reductions, asset divestitures, and a greater emphasis on profitability.
Sources indicated that BP is likely to announce at least one major divestment, with Auchincloss assuring that a “fundamental reset” is vital for improving the company’s performance.
According to analyst Irene Himona of Bernstein, this moment is crucial for BP. Auchincloss, who previously served as the company's chief financial officer, is closely linked to the existing strategy, which may complicate a rapid transition.
In 2020, a transformation strategy introduced by then-CEO Bernard Looney and Auchincloss pledged to cut oil and gas output by 40%, making it one of the most ambitious commitments in the sector, while also seeking to expand renewables.
However, in 2023, BP adjusted this target to a 25% reduction, prioritizing short-term returns as emphasized by investors.
On Wednesday, insiders suggest that Auchincloss may completely eliminate this target, with possible plans to divest from wind and solar assets, Castrol lubricants, and its service station network.
Himona has speculated that Auchincloss could even decide to increase BP’s oil and gas production, similar to strategies announced by ExxonMobil, Chevron, and Shell.
Currently, BP's production stands at approximately 2.3 million barrels of oil equivalent per day, a decrease from around 2.6 million barrels per day in 2019.
Sophie Wagner contributed to this report for TROIB News
