BP has halted hiring across the company and paused new offshore wind power projects as it seeks to reassure investors it is on the right path, focusing on its core business in oil and gas.
That's according to a Reuters report that quoted unnamed sources from the company, which until last year used to be one of the most ambitious transition fans in the energy industry.
The sources told the publication that the move was part of a shift in priorities under CEO Murray Auchincloss that involves reducing investments in costly transition projects such as offshore wind whose payback period is unacceptable long for the company's new top man.
The supermajor was already reconsidering its transition path under previous CEO Bernard Looney who was ousted earlier this year after an internal scandal. Wind, solar and other low-carbon projects that BP had entered were failing to deliver the profits they were supposed to deliver, causing the company to sour on the transition push somewhat.
BP even got pressured by an activist investor to drop the transition altogether-an odd demand by an activist investor in this day and age but one with a sound basis. Hedge fund Bluebell argued that BO's attempts to become a transition company were destroying shareholder value as it involved a move away from oil and gas that was planned to be faster than the pace, at which the world as a whole could move away from them.
BP meanwhile cut its oil and gas output reduction target, from the original 40% by 2030 to 25%, explaining that the move was due to the disruption in energy markets caused by the war in Ukraine.
Now, however, the Reuters sources told the publication that BP actually plans to invest in more oil and gas assets, with a focus on the Gulf of Mexico and the U.S. shale patch. At the same time, BP will look for low-carbon opportunities as long as they have shorter payback periods, the sources also said.
By Irina Slav for Oilprice.com
More Top Reads From Oilprice.com:
Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More
U.S. Gasoline Prices Post Super Rare Double-Digit Weekly Drop
Oil Prices Fall After API Reports Large Surprise Builds in Crude And Products
The Pipeline Project Preparing for Canada’s Largest Ever Corporate Bond Deal
Oil Price Plunge Hits BP and Shell Shares
Washington Looking to Revive More Shuttered Nuclear Plants