BP to raise oil and gas spending to $10bn a year in pivot away from green goals

BP will abandon its green ambitions by increasing its oil and gas investment to $10bn a year as part of a fundamental reset of the troubled company’s strategy.

The company has confirmed that it will scrap its plan to cut its fossil fuel production and will instead grow production to 2.3–2.5 million barrels of oil a day by the end of the decade.

The oil supermajor’s chief executive, Murray Auchincloss, added that it would be “very selective” about investing in fossil fuel alternatives which help the energy transition.

“Today we have fundamentally reset BP’s strategy,” he said. This is a reset BP, with an unwavering focus on growing long-term shareholder value.”

The new strategy represents a stark shift from investment plan put forward five years ago by former chief executive Bernard Looney who promised to shrink its oil and gas production to to around 1.5m barrels a day and make BP a net zero energy company by 2050.

BP has come under growing pressure from shareholders to retreat from the green pledges. Its share price, after BP lost almost a quarter of its market value in the past two years while rivals Shell and Exxon have seen their market value increase while they pursue greater oil and gas production.

The company also faces an existential threat from activist hedge fund Elliott Management which has amassed a stake in the oil company worth almost £3.8bn, or 5% of its shares.

The New York hedge fund is widely expected to use its grip on the 120-year-old company to demand sweeping changes, including a potential break-up of the company.

More details soon …