BP is undergoing a period of significant change, marked by a shift in strategic direction and mixed financial outcomes. The oil and gas giant is scaling back its green ambitions, abandoning key projects, and facing investor skepticism. Simultaneously, former CEO Bernard Looney has re-emerged in a new role, while current CEO Murray Auchincloss sees his compensation impacted by the company's performance.
BP's Green Retreat
In a notable strategic U-turn, BP is ramping up its oil and gas output while cutting investments in low-carbon energy. This move comes after the company had previously committed to "reimagining energy for people and our planet." Now, investment in low-carbon energy is relegated to 5% or less of the overall budget, and even that portion requires government support. The company is even seeking a partner for its solar developer, Lightsource, despite acquiring full control just last year.
This shift has been met with a lukewarm reception from the market. Despite CEO Murray Auchincloss describing the new strategy as "exciting," BP's shares fell by 1.4% after the announcement. This suggests investors are wary of the company's abandonment of climate goals, highlighting the challenges BP faces in balancing shareholder value with environmental responsibility.
HyGreen Plan Abandoned
Further compounding BP's challenges, the company has scrapped its HyGreen plan to build a green hydrogen plant in the UK. This project was expected to create 660 jobs during construction and a further 100 when operational. The cancellation represents a blow to the UK's green energy ambitions and raises questions about BP's commitment to renewable energy projects.
CEO's Compensation Affected
BP's financial performance has also impacted its leadership. According to the company's annual report, CEO Murray Auchincloss received no bonus for the past year. This reflects a decline in his overall pay, signaling the challenges the company faces in navigating a rapidly changing energy landscape.
Looney's New Chapter
Meanwhile, former BP CEO Bernard Looney, who was dismissed in 2023, has resurfaced as chairman of ExpertAI, a tech firm that uses artificial intelligence to help small and medium-sized businesses reduce their carbon footprint. This new role marks Looney's return to the business world after a period of silence following his departure from BP, and is somewhat ironic given BP's recent backtracking on green initiatives.
These developments paint a complex picture of BP's current state. The company is grappling with the tension between traditional energy production and the growing demand for sustainable solutions. Whether BP can successfully navigate these challenges remains to be seen.