BP has scrapped a previous target to reduce its oil and gas production by the end of the decade as the UK-based supermajor is pivoting back to its core hydrocarbons business to lift investor returns, Reuters reported on Monday, citing sources familiar with the plans.
BP aims to pour new investments in oil and gas production and is set to increase its output in the U.S. Gulf of Mexico and the Middle East, according to Reuters’s sources.
BP’s CEO Murray Auchincloss, who succeeded Bernard Looney, is set to unveil the company’s new strategy in February 2025, which will include the official removal of the 2030 oil and gas production target, the sources added.
While keeping their 2050 net-zero targets intact, Europe’s major oil companies have started to scale back interim emission reduction targets, acknowledging that their priorities now lie with returning more cash to shareholders. And these returns come from the fossil fuel business, not from renewables.
Following the Russian invasion of Ukraine and the energy crisis, the oil and gas industry has stressed that affordability and energy security are at least as equally important as helping the world reduce carbon emissions.
Auchincloss has expressed in the past views that the supermajor would “pragmatically adapt” to energy demand trends. BP still aims to be a net-zero energy company by 2050, but its focus would be on a leaner company with higher returns for shareholders.
“As Murray said at the start of the year… the direction is the same – but we are going to deliver as a simpler, more focused, and higher value company,” a spokesperson for BP told Reuters.
BP has already approved new investments in oil projects. In late July the company took the final investment decision on the Kaskida project in the U.S. Gulf of Mexico as part of its long-term commitment to deliver secure, affordable, and reliable energy.
Kaskida, which will be BP’s sixth hub in the Gulf of Mexico, will feature a new floating production platform with the capacity to produce 80,000 barrels of crude oil per day from six wells in the first phase. Production is expected to start in 2029.
By Tsvetana Paraskova for Oilprice.com