London — BP is facing a shareholder revolt after announcing a dramatic shift back to oil and gas production, with investors demanding the company prioritize profits over climate ambitions. The move follows years of underperformance compared to rivals like Shell and Exxon, whose returns have left BP’s shareholders fuming. But climate groups warn the strategy could saddle BP with worthless “stranded assets” as global demand for fossil fuels plummets.
Contents
After two decades of pursuing green energy, BP is reversing course, redirecting billions to oil and gas as shareholders reject its climate goals. The decision follows years of underperformance compared to rivals like Shell and Exxon, whose returns have left BP’s investors fuming. But critics warn the move could saddle BP with worthless “stranded assets” as demand for fossil fuels plummets.
Key Takeaways:
- $10B Shift: BP will cut renewables spending by 40% and redirect funds to oil/gas.
- Shareholder Revolt: Dozens signed a letter opposing the move, citing climate risks.
- Trump Influence: “Drill baby drill” rhetoric encourages fossil fuel investment.
BP’s Climate Journey
- 2000: Rebranded as “Beyond Petroleum,” signaling a shift to renewables.
- 2020: CEO Bernard Looney pledged to cut oil/gas production 40% by 2030.
- 2025: Looney steps down; new CEO Andy Murray redirects focus to oil.
Industry Trends
- Shell: Cut green investments by 30% in 2024.
- Equinor: Postponed $5B offshore wind projects.
- Exxon: Returned $20B to shareholders in 2024, quadruple BP’s $5B.
Policy Factors
- UK Ban: No new oil/gas licenses, but 90% of BP’s operations are overseas.
- US Support: Trump administration opposes green mandates, boosting oil drilling.
Main Analysis
Profit vs. Planet: The Shareholder Dilemma
- Returns Gap: BP’s 5% shareholder return (2023) vs. Exxon’s 20%.
- Climate Costs: BP’s $300 million loss on renewables in Q4 2024.
- Investor Frustration: “BP’s green pivot failed. Focus on what you do best—oil,” said one top shareholder.
BP’s $10B Oil Gamble
- 40% Renewables Cut: $4 billion redirected to oil/gas exploration.
- New Projects: $6 billion in US shale and North Sea oil fields.
- Climate Risks: Analysts warn 30% of BP’s reserves could become unusable by 2040.
Visual: BP’s Investment Shift
Future Outlook
- Industry Shift: More firms may follow BP’s lead as green returns lag.
- Climate Risks: Stranded assets could cost BP $100 billion by 2030, per Carbon Tracker.
- Policy Uncertainty: UK’s net-zero goals clash with BP’s oil push, but US support offsets risks.
Expert Predictions
- Fatih Birol (IEA): “Companies betting on oil must prepare for a low-carbon future.”
- BP CEO Andy Murray: “Our priority is delivering value to shareholders.”
Conclusion
BP’s pivot to oil highlights a stark choice: profit now or survival later. While shareholders cheer short-term gains, climate risks loom. What’s your take—should BP prioritize profits or planet? Share your thoughts below.
Final Thought:
In a world racing to net-zero, can oil giants like BP afford to drill their way to prosperity?
