Global energy giant bp announced on 26 February that it is slashing planned investments in renewable energy but boosting oil and gas spending to US$10bn/year in a bid to increase cash flows and returns.
Annual investment in energy transition would be cut by more than US$5bn from its previous forecast, to between US$1.5bn-US$2bn/year.
“Today we have fundamentally reset bp’s strategy,” bp chief executive Murray Auchincloss said. "We will grow upstream investment and production to allow us to produce high margin energy for years to come. We will focus our downstream on markets where we have leading integrated positions."
BP now aims to increase oil and gas production to between 2.3M-2.5M barrels of oil equivalent/day in 2030, Reuters wrote on 26 February.
Under Auchincloss' predecessor, Bernard Looney, bp had pledged in 2020 to cut oil and gas output by 40% while rapidly growing renewables by 2030, the report said.
Across the energy sector, major companies had shifted their response to lower carbon emissions and curb climate change, with a re-focus on oil and gas, Reuters wrote.
bp already announced in June 2024 that it was scaling back plans for to develop new sustainable aviation fuel (SAF) and renewable diesel projects at its existing sites, pausing planning for two potential projects while continuing to assess three for progression.
According to a bp spokesperson quoted in a 21 June Biobased Diesel Daily report, the three projects to be assessed were in Kwinana, Australia; Castellon, Spain; and Rotterdam, the Netherlands.
The Kwinana renewable fuel project has now been paused, according to a 4 February Bloomberg report.
“While bioenergy remains a core part of BP’s strategy, bp has decided to re-phase the Kwinana renewable fuels project,” the company said in an e-mailed response to questions. “This involves adjusting the pace of delivery with a focus on improving capital efficiency and better alignment with government policies.”
The project on the site of bp’s former Kwinana oil refinery was set to be the first of five bp plants worldwide to turn biomass, including used cooking oil, into sustainable aviation fuel (SAF) and renewable diesel, Boiling Coal wrote on 3 February.
According to sources, bp’s decision to put the Kwinana project on hold was driven by rising construction costs and the lack of a mandate in Australia to use the fuels, Boiling Coal said.
bp is also the sole owner of industrial-scale sugarcane and ethanol business, bp Bunge Bioenergia SA, after announcing on 20 June that it was acquiring Bunge’s 50% holding interest in the company.
In August last year, it also agreed to invest US$49.56M for a 15% stake in Chinese biofuel firm Lianyungang Jiaao Enproenergy Co, which is building a 500,000 tonnes/year SAF plant in the eastern coastal city of Lianyungang, Reuters wrote on 23 August.
