BP is expected to announce this week that it will shift its focus back to oil and gas, abandoning its goal to increase renewable energy capacity by 20 times by 2030. This decision comes as the company rethinks its strategy to boost profits and restore investor confidence, according to sources familiar with the matter.
Earlier this month, BP pledged to overhaul its strategy after reporting its lowest annual and quarterly profits in years. The company aims to improve stock performance and regain trust from its investors.
“We plan to fundamentally reset our strategy to drive improvements in performance, with a focus on growing cash flow and returns,” said BP CEO Murray Auchincloss in a statement two weeks ago.
BP will present the new strategy at its Capital Markets Update on February 26. During this event, Auchincloss is expected to announce the company’s decision to abandon its previous goal, set under former CEO Bernard Looney, to expand renewable capacity to 50 gigawatts (GW) by 2030.
Instead, BP plans to shift its focus back to oil and gas, following a trend set by other European energy giants like Shell and Equinor.
The company is also set to reduce investments in low-carbon energy projects, aiming to increase returns for shareholders and reduce rising debt, according to Reuters sources.
BP’s push for better stock performance and higher returns intensified after activist investor Elliott Management acquired a nearly 5% stake in the company. Elliott is reportedly pushing for changes, including major asset sales, to address the company’s undervalued shares.
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