BP has adjusted its stance on cutting oil and gas output by 2030 to reassure investors and address concerns about its energy transition strategy, as well as to narrow the gap in value compared to competitors, reports Reuters.
Under the leadership of CEO Murray Auchincloss, BP has shifted its strategy towards prioritizing returns over an aggressive shift towards renewables and low-carbon energy, which was the approach of the previous CEO, Bernard Looney.
Despite concerns that BP is not investing adequately in profitable segments, such as oil and gas, Auchincloss has maintained the target set by Looney to reduce oil and gas output by approximately 25% by 2030 to 2 million barrels of oil equivalent per day (boed). This target has raised concerns among investors, given that BP is the only major oil company with reduction targets.
Auchincloss highlighted the importance of a returns-based approach in determining future production levels, as BP evaluates over 30 projects across its businesses in the coming years. He stressed a focus on returns and cash flow rather than volume.
Analysts anticipate that BP may increase its spending on oil and gas production, known as upstream, in the next iteration of its capital allocation strategy. This could result in higher upstream volumes than the 2 million boed target set for 2030.
