BP has softened the language around its pledge to cut oil and gas output by around 25% between 2019 and 2030, in an effort to reassure investors and narrow the valuation gap between the company and its rivals.
In recent months, CEO Murray Auchincloss has pivoted BP’s strategy to focus more heavily on returns, rather than the company’s transition towards renewables and low-carbon energy under his predecessor, Bernard Looney.
BP’s shares have been lagging behind those of competitors like Shell, TotalEnergies, Exxon Mobil, and Chevron, reflecting concerns that the company is not investing in the most profitable segments of its business, primarily oil and gas.
Auchincloss has not reversed the flagship target announced by Looney in 2020, which was later watered down in 2023, to reduce oil and gas output to 2 million barrels of oil equivalent per day (boed) by 2030. BP is the only major oil company to have such reduction targets, and this pledge has concerned some investors.
Speaking to Reuters on Tuesday, after BP announced $2.7 billion in first-quarter profits, Auchincloss said the company may overshoot or undershoot the 2030 target. He stated, “Two million (boed) is a decent number to stick by right now. Could it be higher? Yes. Could it be lower? Yes.”
This softening of the language around the 2030 oil output reduction target is seen as an effort by BP to reassure investors and address their concerns about the company’s energy transition strategy. The move aims to narrow the valuation gap between BP and its more oil and gas-focused rivals.