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Highlights:
- Strategic Shift: BP will abandon its 2030 target for oil and gas production cuts, marking a shift towards higher returns from traditional energy investments under CEO Murray Auchincloss.
- Focus on Oil and Gas: The company is pausing offshore wind investments and exploring new oil projects in Iraq and the Gulf of Mexico, prioritizing profitability over green initiatives.
- Net Zero Commitment: BP continues to target net zero by 2050, focusing on reducing its own operational emissions while excluding emissions from burning its fossil fuels.
BP PLC (LSE:BP), under the leadership of new chief executive Murray Auchincloss, is set to reveal a reworked strategy that will abandon its previous target of cutting oil and gas production by 2030. The move marks a shift from BP’s earlier, more aggressive green ambitions, as Auchincloss steers the company towards prioritizing higher returns through traditional energy investments while still maintaining a commitment to achieving net zero emissions by 2050.
Strategic Shift Under Auchincloss
Auchincloss, who took over from Bernard Looney earlier this year, is poised to further scale back BP’s climate targets when the company unveils its updated strategy in February 2024. This is a continuation of the policy adjustments he began, which included lowering BP’s original target of cutting oil and gas production by 40% by 2030 to 25%. Now, it appears the production target will be scrapped altogether, with the company focusing more on profitable oil and gas ventures while pausing other green initiatives, such as offshore wind investments.
Focus on Profitability and Oil Projects
BP’s shift comes with a renewed emphasis on traditional energy sources, especially oil and gas. The company is reported to be in discussions for potential investments in three new exploration projects in Iraq, along with ongoing plans in the Gulf of Mexico. In line with this strategy, BP has also refocused its electric vehicle (EV) charging division to improve returns and halted its offshore wind investments.
Long-Term Net Zero Commitment
Despite these changes, BP is still committed to achieving net zero carbon emissions by 2050. However, this target refers only to emissions created by BP’s own operations, excluding the much larger amount of emissions produced when customers burn its oil and gas. This distinction continues to draw attention as BP joins other major energy companies in balancing sustainability commitments with shareholder returns.
