Oil and gas giant, BP, has scaled back the firm's energy transition strategy to regain investor confidence, according to Reuters quoting three sources with knowledge of the matter.

When unveiled in 2020, BP's strategy was the sector's most ambitious with a pledge to cut output by 40% while rapidly growing renewables by 2030. BP has abandoned the sustainability initiatve which included cutting oil production to just 2 million barrels per day at the end of the decade, as investors focused on near-term returns rather than the energy transition.

Chief Executive Officer (CEO) Murray Auchincloss, who earlier announced a $2 billion cost saving drive by the end of 2026, has in recent months paused investment in new offshore wind and biofuel projects and cut the number of low-carbon hydrogen projects down to 10 from 30. BP has nevertheless retained its stakes in its solar power and biofuel joint venture, and will continue to target net zero emissions by 2050.

Auchincloss, previously BP's finance head, has vowed to focus on returns and investing in the most profitable businesses, first and foremost in oil and gas.

The London-listed company is now targeting several new investments in the Middle East and the Gulf of Mexico to boost its oil and gas output..

BP's share price, which has underperformed its rivals so far this year as investors question the company's ability to generate profits under its current sustainability strategy.

Rival Shell has also slowed down its energy transition strategy since CEO Wael Sawan took office in January, selling power and renewable businesses and scaling back projects including offshore wind, biofuels and hydrogen.

The shift at both companies has come in the wake of a renewed focus on European energy security.