BP, one of the world’s leading oil and gas companies, is preparing to “reset” its strategic priorities following a significant downturn in profits last year. The company’s 2024 net income fell sharply to $8.9 billion, a decline that executives attribute to lower oil and gas prices as well as shrinking margins in its refining operations. In response, BP is expected later this month to announce a major shift away from its earlier aggressive green energy targets.
Previously, BP had aimed to build 50GW of renewable energy capacity by 2030, a goal now likely to be abandoned as part of this strategic pivot. The company has already taken steps to reallocate its focus: in December, BP restructured its offshore wind portfolio by transferring most of these assets into a joint venture with Japanese firm Jera, effectively distancing them from its core fossil fuel operations. Furthermore, new wind projects were suspended as of June, reinforcing the trend toward scaling back renewables.
ThE strategic realignment comes amid growing pressure from activist investors. Notably, Elliott Management has recently acquired a stake in BP and is pressing for a greater emphasis on oil and gas investments. Industry analyst Russ Mould from AJ Bell commented that the substantial profit drop has provided ample ammunition for such calls, insisting that without a clear and robust plan, BP risks ceding control over its future direction.
BP’s move mirrors a broader trend across the energy sector. Major players such as Equinor have recently announced similar cuts in renewable spending citing escalating costs, slower market uptake, and hesitancy among customers to commit long-term—while Shell has also retreated from new offshore wind projects. These developments highlight an industry-wide shift toward favoring more immediately profitable fossil fuel ventures over lower-yielding green projects.
Adding to this trend, recent political signals have bolstered the fossil fuel agenda. U.S. President Donald Trump has repeatedly emphasized a commitment to expanding oil and gas production, even renewing calls to withdraw from the Paris climate agreement. Following this guidance, BP has adjusted its branding in regions like the Gulf of Mexico to align with new governmental directives, further underscoring its pivot toward traditional energy sources.
Environmental advocates remain sharply critical of BP’s new course. Groups including Global Witness and Greenpeace have highlighted the stark contrast in investment, noting that while BP poured nearly £9 billion into oil and gas last year, its spending on renewables was just a fraction of that sum. Critics warn that by deepening its reliance on fossil fuels, BP not only risks long-term financial exposure in a rapidly changing energy landscape but also contributes to the escalating climate crisis.
As BP gears up to announce its revised strategy on February 26, investors and environmentalists alike will be watching closely to see if this pivot toward fossil fuels will deliver the short-term gains expected by shareholders or if it will ultimately prove to be a risky bet in a world increasingly focused on sustainability.
