BP, the energy giant, announced on Wednesday that it would increase spending on oil and gas while significantly reducing investments in clean energy. This decision appears to be driven by investor demands for higher returns and the realization that the transition to cleaner fuels has not yielded expected benefits. “Today, we have fundamentally reset BP’s strategy,” said Murray Auchincloss, BP’s chief executive, in a statement. BP plans to raise oil and gas investment to around $10 billion annually to boost production, while cutting renewable energy spending to between $1.5 billion and $2 billion per year, a $5 billion annual reduction from prior plans. Auchincloss took over as CEO about a year ago, succeeding Bernard Looney, who was removed due to undisclosed personal relationships with employees. Five years ago, Looney had introduced a plan to reduce oil and gas production by 40% by 2030, which was initially praised as industry-leading. However, rising oil and gas prices, along with poor performance in some green energy sectors like offshore wind, particularly in the US, have shifted priorities. Additionally, the Trump administration’s pro-fossil fuel stance has influenced the energy investment landscape.
