In an apparent effort to appease investors unhappy with BP ‘s green goals, the head of BP imposed a hiring ban and halted all new offshore wind projects.
Murray Auchincloss was BP’s former Finance Chief and took on the role of in January following the shocking departure of Bernard Looney. He promised to focus on delivering shareholder value.
Looney was fired last September after failing not to disclose relationships between colleagues.
The decision by BP to slow its green ambitions has stoked fears that Looney’s plans to move the company from fossil fuels and “become a zero-carbon company by 2050” or earlier, may be soon derailed.
BP is under pressure over its green goals from shareholders because some renewable projects proved to be more expensive than expected. Profits from oil and natural gas have also risen since the Russian invasion of Ukraine two years ago.
The company responded by announcing plans to reduce oil and gas production between 2019 and 2030 by only 25% – far short of the 40% reduction it had previously aimed for.
Greenpeace UK described BP’s plans as “disappointing, but sadly not surprising”.
Areeba Hamid said that Murray Auchincloss was given the opportunity to build upon the legacy of his predecessor and to become a part of the solution, not the harbinger, to the climate crises. Instead, BP has followed other fossil fuel giants in abandoning renewables to double down on oil and natural gas with the hope of a quick buck.
Auchincloss, according to reports, is looking into investing and possibly acquiring oil and gas assets in order to strengthen BP’s existing operations. This includes the Gulf of Mexico as well as the shale-basins that were acquired by the Anglo Australian miner BHP.
Shell, BP’s main rival, announced its own plans earlier this month to reduce its green growth ambitions. It will cut the number of employees working on low carbon solutions by around 200 positions while shifting its focus toward high-profit oil projects as well as expanding its gas business.
Alice Harrison, Global Witness’s head of fossil-fuels campaigns, stated: “Since [BP] began making record profits from the energy crisis, they have shown their true colours by slashing their climate targets and renewable investments to make a quick buck through increased fossil-fuel production.”
BP has been building up a portfolio of offshore projects in the UK and Germany that can generate 9.5 gigawatts in total. These projects are still to be developed. It is believed that BP wants to concentrate on its existing assets rather than bid for new renewable energy projects.
Reuters reported that it has reassigned dozens to find new renewables projects in Britain and Germany. It could also make some cuts in renewables. Some exceptions are expected for frontline positions.
BP’s shares rose more than 1% Thursday but underperformed their rivals over the past few months. This has led to speculation that may be a target for a takeover. Looney outlined a “net-zero” plan which originally aimed at cutting the company’s production of oil by 2030. Other companies plan to increase fossil fuel production.
BP invests in low-carbon and biofuels businesses that will generate profits in the near future. The company announced a week ago that it had agreed to a $1.4bn deal (£1.1bn), which would allow it to fully own its Brazilian sugar joint venture and ethanol. However, it has scaled back plans for new biofuels development.
BP stated: “As Murray Auchincloss had said in February, BP’s destination – transforming from an international oil company into an integrated energy company – is unchanged. But we will deliver as a more focused, simpler and higher-valued company.
We set six priorities to support this. These include a greater focus on the business and activities that add the most value. They also include delivering BP’s next wave of efficiencies as well as BP growth projects.
Since taking on the role of CEO permanently in January, Auchincloss pledged a ‘more pragmatic’ approach towards BP’s green targets. BP announced in May that it would reduce $2bn in costs before the end of 2026 after reporting lower-than-expected profits for the first three months of the year. Auchincloss stated that he would make savings by investing in fewer projects over the next few years.
Post Disclaimer
The following content has been published by Stockmark.IT. All information utilised in the creation of this communication has been gathered from publicly available sources that we consider reliable. Nevertheless, we cannot guarantee the accuracy or completeness of this communication.
This communication is intended solely for informational purposes and should not be construed as an offer, recommendation, solicitation, inducement, or invitation by or on behalf of the Company or any affiliates to engage in any investment activities. The opinions and views expressed by the authors are their own and do not necessarily reflect those of the Company, its affiliates, or any other third party.
The services and products mentioned in this communication may not be suitable for all recipients, by continuing to read this website and its content you agree to the terms of this disclaimer.