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 2.3m–2.5m 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 that 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 the investment plan put forward five years ago by the former chief executive Bernard Looney, who promised to shrink its oil and gas production to about 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. BP has lost almost a quarter of its market value in the past two years while the market value of its rivals Shell and Exxon has increased while they pursue greater oil and gas production.

The company also faces an existential threat from the 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 breakup of the company.

Matilda Borgström, a campaigner at climate action group 350.org, said: “This move by oil giant BP clearly demonstrates why super-rich corporations and individuals, chasing short-term profit for themselves and shareholders, cannot be trusted with fixing the climate crisis or leading the transition to renewable energy we so badly need.

“Pumping money into more oil and gas increases the risk of climate impacts for us all, flies in the face of legal climate targets, and with the renewables sector growing exponentially is a big risk to the shareholders that BP is so keen to please.”