BP now aims to grow oil and gas production to between 2.3 MMboe/d and 2.5 MMboe/d in 2030. (Source: CERAWeek by S&P Global)
BP CEO Murray Auchincloss said his company’s decision to slow spending in renewables and bump up petrochemical production was a logical step considering BP’s recent performance.
“The last 12 months were all about setting the foundations for a strong strategy and launch that would have credibility,” Auchincloss said during a session at CERAWeek by S&P Global in Houston on March 11. “I'm super excited that we launched it.”
At the end of February, BP announced a shift in company strategy. After years leaning into the energy transition, the company planned to cut spending in wind and solar and push up its oil and gas production budget to $10 billion.
BP has cut planned annual investment in its renewable energy businesses by more than $5 billion. The company has come under pressure by investors, including activist Elliott Investment Management, which has a 5% stake in the company.
BP now aims to grow oil and gas production to between 2.3 MMboe/d and 2.5 MMboe/d in 2030. It pumped 2.36 MMboe/d in 2024. The company’s original 2030 target was to cut oil and gas production by 25%.
The company sees a development wave coming in the Gulf of Mexico, and with the price of gas rising after years in the doldrums, the company is eyeing production increases in the U.S.
“The time has come for the Haynesville,” Auchincloss said, referring to the shale play in Louisiana and Texas.
The energy giant has made the shift to keep up with its competitors. The London-based Times newspaper recently noted that since 2020, BP stock had a 43% return on its share value, while Shell had a 121% share return value.
The company overestimated the pace of the energy transition and is returning to its roots in petrochemicals, Auchincloss said.
“The world's changed a lot. If you think about what happened from 2020 forward, we had COVID, we had the war in Ukraine, we had material recessions,” he said. “As I visited each and every government around the world, it became clear that the two priorities, in all the countries we operate, were really affordable energy and reliable energy.
“In each and every nation, they're talking to you about more oil and gas. Yes, lower carbon, but they need more oil and gas.”
BP will focus on biofuels, biogas and carbon sequestration as a way to continue progression on greenhouse gas reduction.
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