① According to insiders, in response to investor dissatisfaction with its energy transformation strategy, BP Plc has frozen recruitment and suspended new offshore wind projects; ② News suggests that the new CEO, Looney, and the CFO have made the acquisition of new oil & gas assets a top priority.
According to media reports on June 28th, citing insider sources, the energy giant BP has frozen recruitment and suspended new offshore wind power projects in response to investors' dissatisfaction with its energy transformation strategy.
Several sources said that these measures were part of the new CEO Murray Auchincloss's decision, and the company plans to slow down its investment in large budget low-carbon projects (especially offshore wind power projects), with the internal expectation that these projects will not generate cash in the next few years.
If true, this marks a huge reversal in BP's business direction. Under former CEO Bernard Looney, the company focused on getting rid of fossil fuels, but the return on investment in renewable energy has dwindled, and the profit from oil and gas business has been boosted by the Covid-19 pandemic and Russia-Ukraine conflict, putting pressure on its stock price.
Three sources said that BP has reassigned dozens of personnel responsible for exploring renewable energy opportunities to existing projects. In addition, Auchincloss and Chief Financial Officer Kate Thomson listed acquiring new oil and gas assets as their top priority.
Meanwhile, BP is also considering investing in low-carbon businesses that can generate returns in the short term, such as biofuels. Earlier this week, BP agreed to acquire a 50% stake in its sugar and ethanol joint venture BP Bunge Bioenergia with grain trading firm Bunge in Brazil for $1.4 billion.
Insiders revealed that BP is expected to make some layoffs in the renewable energy sector, and according to their statements, BP has almost frozen recruitment company-wide, with only a few exceptions.
Last month, Auchincloss announced that the company would save $2 billion in costs annually by the end of 2026, compared to 2023, and the new CEO also reduced the number of members in his leadership team from 11 to 10.
In April of this year, Anja-Isabel Dotzenrath, who led BP's renewable energy and natural gas division, resigned for personal reasons of 'spending time with family'. Two sources said that her successor, William Lin, is expected to focus more on the natural gas business.
Previously, Auchincloss also softened the wording of the company's 2030 targets. In addition to BP, Shell has also adjusted its diversified plan from hydrocarbons to renewable energy, while ExxonMobil and Chevron have remained firmly focused on oil and gas.
BP also showed signs of this, hiring several new employees for its exploration team since May and allocating more funds and manpower to develop new oilfields. Last October, BP claimed to have 18 billion barrels of oil and gas equivalent resources, which can sustain current production for 20 years.