- $5B annual reduction in renewable energy investments through 2025
- 20% increase in oil/gas production budgets to $10B
- Activist investor Elliott Management acquired 4.8% stake in Q2
- 350.org condemns strategy as 'climate betrayal'
- London shares fell 1.4% post-announcement
The energy giant's dramatic pivot marks a reversal of its 2020 Net Zero by 2050roadmap under former CEO Bernard Looney. Analysts note BP's hydrocarbon investments now exceed European peers like TotalEnergies by 18%, while renewable commitments lag 34% behind industry averages.
Three critical insights emerge from this strategic shift:
- North Sea drilling permits increased 22% since Q1 2024
- Renewable energy ROI timelines now projected at 12-15 years vs oil's 5-7
- U.S. shale acquisitions up 40% year-over-year
Regional impacts are already visible in Scotland's offshore wind sector, where BP's canceled Beatrice Phase III project leaves 1,200 jobs at risk. This contrasts sharply with Norway's Equinor, which committed $11B to Baltic Sea wind farms last month.
Market analysts attribute the change to mounting pressure from institutional investors seeking immediate returns. The company's price-to-earnings ratio trails ExxonMobil by 19% and Chevron by 14% over the past fiscal year.
Climate economists warn the decision could add 18 million metric tons of annual CO2 emissions - equivalent to 4.5 coal-fired power plants. This contradicts the International Energy Agency's Net Zero roadmap requiring 4% annual fossil fuel production declines through 2030.
Despite assurances about maintaining 2050 targets, BP's revised capital allocation suggests only 11% of expenditures will support low-carbon projects through 2027, down from 23% in 2023. The company plans to offset emissions through controversial carbon capture partnerships in Abu Dhabi's ADNOC fields.
