BP has announced plans to “fundamentally reset” its business strategy after reporting a sharp decline in profits for 2024. The oil giant is widely expected to scale back its renewable energy commitments and increase oil and gas production, following similar moves by competitors including Shell and Equinor.
The company’s net income fell to $8.9 billion (£7.2 billion) in 2024, a significant drop from $13.8 billion the previous year. BP attributed the decline to lower oil and gas prices and reduced profitability from its refineries.
BP is expected to formally abandon its 2030 target of 50GW renewable energy generation on 26 February, signalling a major shift in strategy. The company has already been scaling back investments in renewables, including moving the majority of its offshore wind assets into a joint venture with Japanese energy firm Jera in December. The move separated its wind portfolio from its core fossil fuel business.
The company is also expected to cut its previous $10 billion commitment in renewables until 2030 by up to half. In June last year, BP froze new wind projects, further underscoring its retreat from green energy expansion.
Activist shareholder Elliott Management has acquired a stake in BP, pushing for greater investment in oil and gas. Investors anticipate board-level changes as the hedge fund applies pressure for a more profit-driven approach.
Russ Mould, an analyst at AJ Bell, noted that BP’s sharp profit drop provided “plenty of fodder” for Elliott, adding that the company had “done little to reassure other shareholders that the current plan is working”. He emphasised that a “clear and credible plan is desperately needed if BP is going to remain the master of its own destiny”.
The fossil fuel sector has been shifting its focus back towards oil and gas production, citing profitability concerns in renewables.
Last week, Norwegian energy giant Equinor announced it would halve investment in renewable energy over the next two years while increasing oil and gas production. Chief executive Anders Opedal said the energy transition was moving more slowly than expected, with higher costs and a lack of long-term contracts discouraging investment.
Shell has also stepped back from offshore wind investments, with similar decisions expected across the sector.
The shift in strategy by oil companies comes as US President Donald Trump renews his support for fossil fuel expansion. In January, Trump vowed to withdraw the United States from the Paris climate agreement and signalled an aggressive push for oil and gas exploration with his “drill, baby, drill” rhetoric.
Following guidance from the US government, BP has also rebranded its operations in the Gulf of Mexico as the “Gulf of America”, in line with Trump’s executive order to rename the body of water.
The decision to prioritise oil and gas over renewables has drawn criticism from environmental groups and sustainable investment advocates.
Human rights organisation Global Witness highlighted BP’s £9 billion investment in oil and gas in 2024, compared with just £1.3 billion on renewables and low-carbon energy. Lela Stanley, head of fossil fuel investigations at the group, condemned the move, stating, “As the world battles extreme weather disasters supercharged by fossil fuels, it is wrong that polluters such as BP can double down on the oil and gas that is driving climate breakdown.”
Elena Polisano from Greenpeace warned that oil companies were fuelling the climate crisis and called for governments to redirect fossil fuel profits toward climate disaster recovery funds.
Investment campaign group ShareAction also expressed concern, describing BP’s shift away from renewables as “deeply concerning” amid worsening climate impacts such as flooding and heatwaves. The organisation warned that doubling down on oil and gas posed a financial risk that responsible investors must respond to decisively.
As BP prepares to formally announce its strategy overhaul, it faces mounting pressure from investors, governments, and environmental groups. The coming weeks will be crucial in shaping the company’s long-term direction as the debate over profitability, sustainability, and climate responsibility intensifies.
