BP cuts renewables investments by $5bn, sets sights firmly on oil and gas

UK-based energy giant BP has announced it will cut its renewable energy investments and instead increase its investment in oil and gas production.

The company buckled under pressure from investors who were unhappy over the company’s underperformance compared to its main rivals such as Shell and ExxonMobil.

For example, BP shares have risen by 36% from the end of February 2020 until February 25, 2025. Shareholders in rivals Shell and Exxon have seen returns of 82% and 160% respectively.

As a result of the investor’s demands, BP stated that it would increase its investments in oil and gas from about $8.5bn a year to $10bn. At the same time, the company would decrease previously planned funding for renewables by more than $5bn.

BP’s capex on low carbon will be around $2bn over the next two years, which is $10bn less than previous plans. In 2023, the company expected to spend $30bn during the decade. Now it sets a limit of spending $4bn by 2030.

The firm said it plans to increase its production to between 2.3m and 2.5m bopd by 2030, with hopes of major oil and gas projects starting by the end of 2027.

BP boss Murray Auchincloss said at the company’s capital markets day event that this was a “reset” of the UK firm and that BP misplaced its optimism for a fast transition. He added that the energy giant went “too far, too fast” in its efforts to cut its oil and gas business and shift to renewable energy.

This shift has been the primary focus of the company since previous CEO Bernard Looney unveiled plans in 2020 to cut hydrocarbon production by 40% and increase spending on wind farms, solar, hydrogen, and other clean energy types.

The company also announced plans to raise $20bn by selling assets. Its 125-year-old Castrol business will be reviewed ahead of a potential sale. BP will also seek a joint venture partner for its Lightsource solar business similar to the agreement it has with Jera for its offshore wind investments.

BP’s EVP for regions, cities, and solutions William Lin stated that solar and offshore wind sectors have been affected by inflation while hydrogen investments ran into policy issues and higher costs combined with reduced customer willingness to pay.

Another savings method from BP was a plan for a staff reduction of 5%. This includes 4,700 BP staff and 3,000 contractors.

However, BP is not alone in this pivot as Shell and Equinor have also announced their plans to reduce green energy investments. The decision is partly political as US president Donald Trump announced it would be firmly behind fossil fuels with his “drill baby drill” policy. The moratorium on offshore wind in the US is also a firm sign of where Trump’s energy policies lie.