Thehead of BP has imposed a hiring freeze and halted new offshore wind projects, in an apparent attempt to placate investors who are unhappy with the oil company’s green targets.
Murray Auchincloss – BP’s former finance chief who was appointed CEO in January after the shock departure of his predecessor, Bernard Looney, for failing to fully detail relationships with colleagues last year – is slowing down investments in big low-carbon projects such as offshore wind, in news first reported by Reuters.
This is a reversal of the direction Looney was taking to move the company away from fossil fuels, with a pledge to “become a net zero company by 2050 or sooner”. That policy has weighed on BP’s shares as some renewable projects proved more costly than expected, while profits from oil and gas soared after Russia’s invasion of Ukraine more than two years ago.
Over the past four years, the oil company has built up a sizeable portfolio of offshore wind projects capable of generating 9.5 gigawatts of energy in total in the UK, Germany and the US that are yet to be developed. It wants to focus on these assets, it is understood, rather than bidding for new renewable projects.
BP is thought to have imposed a hiring freeze, with a few exceptions such as frontline roles. It has reassigned dozens of people tasked with finding new renewables opportunities to its offshore wind projects in Britain and Germany, Reuters reports, and could make some job cuts in renewables.
BP shares were up about 1% on Thursday, but have underperformed rivals in recent months, prompting speculation that it could be a takeover target. Looney set out a “net zero” plan that originally aimed to cut the company’s oil production by 2030 while others plan to increase their fossil fuel production.
BP has come under mounting pressure from environmental campaigners after watering down its green targets last year. Auchincloss is reportedly looking at investing in and possibly acquiring new oil and gas assets to strengthen BP’s existing operations, particularly in the Gulf of Mexico and the shale basins acquired from the Anglo-Australian miner BHP in Texas.
BP is also investing in biofuels and low-carbon businesses that can generate returns in the short term. A week ago, the company agreed a $1.4bn deal to take full ownership of its Brazilian sugar and ethanol joint venture, but said it was scaling back plans for development of new biofuels projects.
BP said: “As Murray Auchincloss said in February, BP’s destination – transforming from international oil company to integrated energy company – is unchanged, but we are going to deliver as a simpler, more focused and higher value company.
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“We set out six priorities that underpin this, including driving greater focus into the business, on to activities that create the most value, as well as delivering both the next wave of efficiencies and BP’s growth projects.”
Auchincloss has pledged a “more pragmatic” approach to BP’s green targets since taking up the CEO role permanently in January. In May, BP said it would cut $2bn of costs by the end of 2026, after reporting lower than expected profits for the first quarter of the year. Auchincloss said he planned to make the savings by choosing fewer new projects to invest in over the coming years.