BP increases fossil fuel spending, cuts renewable investments

BP to cut renewable investment, increase fossil fuel spending, aiming for $10 billion annual oil and gas investment by 2027.

In Short

BP plans to raise its oil and gas investment to $10 billion annually through 2027 while cutting renewable energy spending to between $1.5 billion and $2 billion. The company is shifting focus to enhance financial performance, a move that surprises sustainability-focused investors.

British oil major BP announced plans to significantly increase its investment in oil and gas, raising the annual budget to $10 billion through 2027.

This move marks a strategic shift for the company, which also aims to lower its total annual capital expenditure to between $13 billion and $15 billion. BP is targeting $20 billion in asset divestments by the end of the same period.

Investment in renewable energy will be considerably reduced, likely falling to between $1.5 billion and $2 billion annually, far below previous projections of over $5 billion.

CEO Murray Auchincloss stated that the strategy is designed to drive growth and improve performance by reallocating capital to higher-returning areas.

BP is expected to provide more details about this strategic reset during its upcoming Capital Markets Update, which will include presentations from leadership.

Analysts view this event as crucial for BP, especially following interest from activist investor Elliot Management.