BP should announce that it will reduce its renewable energy investments and rather focus on increasing oil and gas production.
The energy giant will describe its strategy later following the pressure of certain unhappy investors, its profits and the course of the action were much lower than its competitors.
Shell and the Norwegian company Equinor have already reduced their plans to invest in green energy. Meanwhile, the comments of the “Drill Baby Drill” by American President Donald Trump encouraged investments in fossil fuels and the distance from low carbon projects.
Some shareholders and environmental groups have expressed concerns about any potential increase in fossil fuel production.
Five years ago, BP set some of the most ambitious objectives among large oil companies to reduce the production of oil and gas by 40% by 2030, while considerably increasing investments in renewable energies.
In 2023, the company lowered this objective of reducing oil and gas to 25%.
He should now abandon it completely while confirming that he reduces investments in renewable energies of more than half in what CEO Murray Auchincloss has described as “fundamental reset”.
In 2024, BP’s net profit fell to $ 8.9 billion (7.2 billion pounds sterling), compared to $ 13.8 billion the previous year.
Mr. Auchincloss is under pressure to increase the profits of certain shareholders, in particular the activist group influential Elliot Management, which has taken a participation of almost 4 billion pounds sterling in the company of 70 billion pounds Sterling to put pressure for more ‘Oil and gas investment.
Since 2020, when former director general Bernard Looney has unveiled his strategy for the first time, shareholders have received total yields, including 36% dividends in the past five years. On the other hand, the shareholders of Rivals Shell and Exxon experienced yields of 82% and 160% respectively.
BOPs under performance have aroused speculation that it may be a buy-back objective or consider moving its main stock market list to the United States where oil and gas companies order higher assessments.
Not all shareholders want society to change the course so radically.
Last week, a group of 48 investors called on the company to allow them a vote on any potential project to move away from its previous commitments to renewable energies.
A spokesperson for one of the signatories, Royal London Asset Management, said: “As long-term workers, we recognize the past efforts from BP to the energy transition but we are concerned about the continuous investment of the ‘Company in the expansion of fossil fuels. “
The Greenpeace UK environmental group warned that BP could expect “discharge and the challenge to each turn if it is coupled with fossil fuels – not only green activists but its own shareholders”.
The main climate advisor Charlie Kronick said: “Government policies will also have to prioritize renewable powers, and because extreme weather conditions put pressure on insurance models – political decision -makers will seek fossil benefits in order to Finish a recovery of extreme weather conditions.
AJ Bell analyst Russ MLUD said it was one of the most important moments for BP in the past four or five years.
“Other energy companies have been clearer on their intentions so far than BP,” he said.
“They must prove to people that after a difficult operational performance and the share of the actions in relation to their peers, that they seek to do something, not only to let things drift, he added.
BP has already placed its offshore wind activity in a joint venture with the Japanese company Jera and seeks to find a partner to do the same with its solar activity.
Refocusing on oil and gas could also see sales of other companies in order to withdraw “non -essential things from books” as initiates describe.
It has been more than 20 years that the former CEO of Lord, John Browne, said that BP could represent “Beyond Petroleum” when he launched the first provisional moves of the oil and gas company.
Today’s change of strategy could be nicknamed “return to oil” – to the pleasure of certain shareholders and to the dismay of others.
BP and Elliott Management refused to comment.
