bp has set out how it intends to increase oil and gas investment and reduce investment in renewables after disappointing fourth quarter 2024 results.
bp has set out how it intends to increase oil and gas investment and reduce investment in renewables after disappointing fourth quarter 2024 results.
Upstream investment will increase to around $10 billion a year to grow production to 2.3-2.5mmboed by 2030 and generating an extra $2 billion in cash flow.
There will be more ‘selective investment’ in energy transition projects, such as biogas, biofuels and EV charging. ‘Capital-light partnerships’ will be set up in the hydrogen/CCS sectors. Overall, investment in transition businesses of $1.5–2bn p.a will be more than $5bn a year lower than previous guidance.
bp will target structural cost reductions of $4-5 billion by the end of 2027 to reduce annual capex to $13-15 billion. It will also make some $20 billion of divestments by 2027.
‘bp will grow its upstream oil and gas business, focus its downstream business, and invest with increasing discipline into the transition. It builds on bp’s distinct strengths and competitive advantages as an integrated energy company – with a world-class portfolio with top tier oil and gas businesses in attractive basins and leading integrated positions and brands across value chains, all underpinned by trading, technology, and partnerships.
Chief executive Murray Auchincloss said: ‘We are reducing and reallocating capital expenditure to our highest-returning businesses to drive growth, and relentlessly pursuing performance improvements and cost efficiency. We will grow upstream investment and production to allow us to produce high margin energy for years to come. We will focus our downstream business on markets where we have leading integrated positions. And we will be very selective in our investment in the transition, including through innovative capital-light platforms.’
In 2024, BP’s net income fell to $8.9bn, down from $13.8bn in 2023.
