BP p.l.c. BP reportedly implemented a hiring freeze and halted new offshore wind projects, shifting focus back to oil and gas due to investor dissatisfaction with the company’s energy transition strategy.
These moves are part of CEO Murray Auchincloss’ strategy to reduce investments in high-budget, low-carbon projects, especially offshore wind, which are not expected to generate immediate cash flow, reported Reuters.
These actions signify a major departure from the approach of Auchincloss’ predecessor, Bernard Looney, who aimed to transition away from fossil fuels quickly.
The shift has affected BP’s stock performance, as returns from renewable energy projects have declined, while profits from oil and gas have soared in the aftermath of the COVID-19 pandemic and Russia’s invasion of Ukraine.
Auchincloss and Chief Financial Officer Kate Thomson have prioritized investing in and acquiring new oil and gas assets, with a particular focus on the Gulf of Mexico and U.S. onshore shale basins, where BP already has significant operations, the report added, citing people familiar with the matter.
Related: BP Tightens Workplace Relationship Rules After CEO Firing: Report
BP said in a statement to Reuters that Auchincloss introduced six priorities “to deliver as a simpler, more focused and higher value company.”
“The actions we are taking are part of delivering this – and of course are all in service of our aim of growing the value of BP.”
As per the report, BP has reassigned dozens of employees, who were previously focused on identifying new renewable opportunities, to existing projects such as offshore wind initiatives in Britain and Germany.
Read: BP Doubles Down On Biofuels: Buys Out Bunge Bioenergia for $1.4B
This week, BP said it plans to expand and diversify its biofuel operations in Brazil after acquiring stake in BP Bunge Bioenergia.
Investors can gain exposure to the stock via Direxion Hydrogen ETF (ARCA: HJEN) and First Trust Exchange-Traded Fund IV FT Energy Income Partners Strategy ETF (ARCA: EIPX).
Price Action: BP shares closed lower by 1.00% at $35.72 on Wednesday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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