{"id":367754,"date":"2025-02-26T10:55:59","date_gmt":"2025-02-26T09:55:59","guid":{"rendered":"https:\/\/climatescience.press\/?p=367754"},"modified":"2025-02-26T10:56:01","modified_gmt":"2025-02-26T09:56:01","slug":"bp-faces-existential-crisis-after-ruinous-attempt-to-go-green","status":"publish","type":"post","link":"https:\/\/climatescience.press\/?p=367754","title":{"rendered":"BP Faces \u201cExistential Crisis\u201d After Ruinous Attempt to Go Green"},"content":{"rendered":"\n
\"\"
Screenshot<\/figcaption><\/figure>\n\n\n\n

<\/p>\n\n\n\n

From The Daily Sceptic<\/a><\/p>\n\n\n\n

By\u00a0Richard Eldred<\/a><\/p>\n\n\n\n

BP\u2019s green pivot has backfired spectacularly, hammering profits and leaving the company vulnerable to a hedge fund siege, writes Jonathan Leake in the Telegraph<\/em>. Here\u2019s an excerpt<\/a>:<\/p>\n\n\n\n

\n

Addressing journalists and executives at the Royal Lancaster Hotel overlooking Hyde Park, Bernard Looney, BP\u2019s new Chief Executive, urged them to \u201creimagine\u201d his company as a champion of green power.<\/p>\n\n\n\n

By 2030, BP would have cut oil and gas production by 40%, he pledged, with the lost fossil fuel income replaced by wind farms, solar parks and biofuels made from plants.<\/p>\n\n\n\n

He said: \u201cBP has been an international oil company for over a century\u2026 Now we are pivoting to become an integrated energy company.<\/p>\n\n\n\n

\u201cWe believe our new strategy provides a comprehensive and coherent approach to turn our Net Zero ambition into action. This coming decade is critical for the world in the fight against climate change.\u201d<\/p>\n\n\n\n

Five years on from that speech in February 2020, the company is beleaguered by a ruthless activist investor, under pressure to boost its flatlining share price and considering a return to the oil and gas exploration that made it so successful to begin with.<\/p>\n\n\n\n

The abrupt turn follows decades of crisis at one of Britain\u2019s most venerable institutions. Today, its future is more uncertain than ever.<\/p>\n\n\n\n

The Net Zero plans unveiled by Looney have hammered profits and generated intense speculation about a takeover, break up or even a merger with arch-rival Shell<\/a>.<\/p>\n\n\n\n

This month the fears became real with revelations that Elliott, a Florida-based hedge fund and corporate raider, has built a \u00a33.8 billion stake in BP<\/a> \u2013 and is laying siege to the company.<\/p>\n\n\n\n

On Wednesday, BP will face the ultimate test at its capital markets day when Murray Auchincloss, the company\u2019s current chief executive, will seek to persuade sceptical investors that he can deliver a \u201cfundamental reset\u201d.<\/p>\n\n\n\n

To win round doubters, he is expected to announce a major break with the last five years \u2013 shifting away from Net Zero and back towards its oil and gas heritage.<\/p>\n\n\n\n

But many in the City are asking how a company of BP\u2019s size and stature has found itself in this position in the first place\u2026.<\/p>\n\n\n\n

BP\u2019s Net Zero pledges were backed by precise numbers.<\/p>\n\n\n\n

Looney promised that by 2030 BP would boost investment in renewables tenfold from $500 million (\u00a3395 million) to $5 billion and build windfarms and solar parks with a capacity of 50 gigawatts \u2013 roughly enough to supply the whole UK on a windy and sunny day.<\/p>\n\n\n\n

Over the same period it would slash oil and gas production from the equivalent of 2.6 million barrels of oil a day to 1.5 million. Refining throughput would drop from 1.7 million barrels a day to just 1.2 million. \u2026<\/p>\n\n\n\n

It did not take long for problems to start emerging.<\/p>\n\n\n\n

After Russia invaded Ukraine in February 2022, oil and gas prices spiked. The surge rained cash down on fossil fuel producers, including BP. However, it raised questions as to why the company was pulling back from such a profitable market.<\/p>\n\n\n\n

In February 2023, after a blockbuster $28 billion profits for 2022 linked to the global energy crisis, Looney was forced to slash his pledge to cut production by 40% by the end of the decade to a more modest 25%.<\/p>\n\n\n\n

BP\u2019s shareholders had realised that the green spending they supported in 2020 had halved their dividends. Total shareholder returns had underperformed Shell by 15%, France\u2019s TotalEnergies by 30%, Chevron by 60% and ExxonMobil by 100%. \u2026<\/p>\n\n\n\n

Few of Looney\u2019s 2020 promised renewable energy projects have materialised.<\/p>\n\n\n\n

Earlier this month BP used its 2024 results day to announce that those that have been built \u2013 such as its 10 US windfarms \u2013 are to be sold. Its other wind assets (mostly planning approvals, including around the UK), are to be shunted into an independent joint venture.<\/p>\n\n\n\n

BP Lightsource, BP\u2019s solar subsidiary, is still building solar farms \u2013 but these are then sold on, meaning no long-term investment or income.<\/p>\n\n\n\n

Pushed by analysts, Auchincloss, Looney\u2019s replacement, confirmed a halt to all investment in wind and solar. \u201cWe have completely decapitalised renewables,\u201d he said.<\/p>\n\n\n\n

The same results showed BP made $8.9 billion in underlying profit compared with $13.8 billion in 2023 \u2013 its worst annual result since 2020, the year of the pandemic.<\/p>\n\n\n\n

In response, Auchincloss promised a wave of new oil and gas production, including BP\u2019s sixth hub in the Gulf of Mexico. The Kaskida development will soon be producing 80,000 barrels of crude oil a day, with other developments planned in Iraq, India, Brazil, Egypt and the UK\u2019s North Sea.<\/p>\n\n\n\n

Overall, he has suggested BP\u2019s oil production will rise by 2-3% a year until 2030.<\/p>\n\n\n\n

All that, say analysts, completely contradicts the \u201czombie\u201d Net Zero strategy bequeathed by Looney \u2013 as well as offering a strong clue as to what Auchincloss\u2019s \u201cfundamental reset\u201d will include \u2013 a full-blooded return to oil and gas.<\/p>\n<\/blockquote>\n\n\n\n

Worth reading in full<\/a>.<\/p>\n\n\n\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

BP\u2019s green pivot has backfired spectacularly, hammering profits and leaving the company vulnerable to a hedge fund siege, writes Jonathan Leake in the\u00a0Telegraph.<\/p>\n","protected":false},"author":121246920,"featured_media":367755,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_coblocks_attr":"","_coblocks_dimensions":"","_coblocks_responsive_height":"","_coblocks_accordion_ie_support":"","_crdt_document":"","advanced_seo_description":"","jetpack_seo_html_title":"","jetpack_seo_noindex":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[1],"tags":[691833545,691818228,691818154,691818130,691819831],"class_list":{"0":"post-367754","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","6":"hentry","7":"category-uncategorized","8":"tag-british-petroleum-bp","9":"tag-fossil-fuels","10":"tag-net-zero","11":"tag-renewables","12":"tag-shell","14":"fallback-thumbnail"},"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2025\/02\/00Screenshot-2025-02-23-at-17.53.08.jpg?fit=1497%2C823&ssl=1","jetpack_likes_enabled":true,"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/paxLW1-1xFw","jetpack-related-posts":[{"id":367598,"url":"https:\/\/climatescience.press\/?p=367598","url_meta":{"origin":367754,"position":0},"title":"BP in crisis \u2014 The oil industry\u2019s biggest loser on renewable energy","author":"uwe.roland.gross","date":"25\/02\/2025","format":false,"excerpt":"BP has lost a quarter of its share value in the last two weeks. 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Discussions about the company\u2019s direction have caused rifts inside BP over the past year, people close to the company\u2026","rel":"","context":"Similar post","block_context":{"text":"Similar post","link":""},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/02\/image-212.png?fit=1200%2C675&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/02\/image-212.png?fit=1200%2C675&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/02\/image-212.png?fit=1200%2C675&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/02\/image-212.png?fit=1200%2C675&ssl=1&resize=700%2C400 2x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/02\/image-212.png?fit=1200%2C675&ssl=1&resize=1050%2C600 3x"},"classes":[]}],"_links":{"self":[{"href":"https:\/\/climatescience.press\/index.php?rest_route=\/wp\/v2\/posts\/367754","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/climatescience.press\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/climatescience.press\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/climatescience.press\/index.php?rest_route=\/wp\/v2\/users\/121246920"}],"replies":[{"embeddable":true,"href":"https:\/\/climatescience.press\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=367754"}],"version-history":[{"count":3,"href":"https:\/\/climatescience.press\/index.php?rest_route=\/wp\/v2\/posts\/367754\/revisions"}],"predecessor-version":[{"id":367758,"href":"https:\/\/climatescience.press\/index.php?rest_route=\/wp\/v2\/posts\/367754\/revisions\/367758"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/climatescience.press\/index.php?rest_route=\/wp\/v2\/media\/367755"}],"wp:attachment":[{"href":"https:\/\/climatescience.press\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=367754"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/climatescience.press\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=367754"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/climatescience.press\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=367754"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}