BP plans to invest in renewable energy, increasing its annual oil and gas spending.
Oil Major BP said it would cut planned investments in renewable energy and increase its annual oil and gas spending to $10 billion.
It is the latest multinational company in the energy sector, and focuses on oil and gas, changing positions as it needs to reduce carbon emissions and curb climate change.
However, BP’s carbon cutting target, launched in 2020, stood out as one of the most ambitious in the industry at the time.
“It’s a radical change,” CEO Murray Aucincloss told Reuters on Wednesday.
“This is a reset BP and it has an unwavering focus on increasing long-term shareholder value,” he said, according to the Associated Press news agency.
The UK company cut annual investments in its energy transition operations from previous forecasts by over $5 billion, cutting from $1.5 billion to $2 billion a year.
Currently, the company aims to grow oil and gas production in 2030 to 2.3 million to 2.5 million barrels of oil equivalent (BOEPD) per day.
Under the forerunner of Auchincloss, BPP pledged in 2020 to reduce oil and gas production by 40% in 2030, and by 2030 it rapidly grew renewable energy.
Auchincloss said some countries have moved to renewables slower than BP following the war in Ukraine, the pandemic, the volatile energy market and changing attitudes towards renewables.
“So the demand for hydrocarbons is much, much stronger, stronger, stronger than we had imagined five years ago, and the transition isn’t going at the pace we thought it was,” he said.
The CEO told investors after the release of the update that the company’s belief in the green energy transition was “misplaced” and in recent years it was “too far, too fast.”
He added that oil and gas demand will be “needed for decades to come.”
However, he said renewables still present “significant opportunities” and confirmed that the company still wants to meet its net zero carbon emissions by 2050.
Changes in BP’s strategy face response from environmental activists.
“This move by oil giant BP is clearly showing why it is not reliable in chasing short-term profits for itself and its shareholders, securing the climate crisis and leading to the transition to renewable energy that we are in a terrible need.
“Powering money into more oil and gas increases the risk of climate impact for all of us and flies in the face of legal climate targets. And when the renewable energy sector increases exponentially, it’s a huge risk that BP is eager to be happy,” she added.
UK rival Shell and other oil majors are also cutting their clean energy targets.
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