BP’s new CEO, Murray Auchincloss, has imposed a hiring freeze and paused new offshore wind projects as the company places renewed emphasis on oil and gas amid investor discontent over its energy transition strategy. The moves, which have not been reported previously, are part of Auchincloss’ decision to slow down investments in large-budget, low-carbon projects, particularly in offshore wind, that are not expected to generate cash for years.
These actions mark a stark reversal from the direction taken by Auchincloss’ predecessor, Bernard Looney, who had rapidly moved the company away from fossil fuels. This shift has weighed on BP’s shares as returns from renewables shrank, while profits from oil and gas soared in the wake of the COVID-19 pandemic and Russia’s invasion of Ukraine.
BP has reassigned dozens of people tasked with identifying new renewables opportunities to projects already underway, such as offshore wind in Britain and Germany. Auchincloss and Chief Financial Officer Kate Thomson have prioritized investing in and even acquiring new oil and gas assets, particularly in the Gulf of Mexico and in the U.S. onshore shale basins, where BP already has large operations.
The company will also consider investing in biofuels and some low-carbon businesses that can generate returns in the short term. Earlier this week, BP agreed to buy grain trader Bunge’s 50% stake in a Brazilian sugar and ethanol joint venture for $1.4 billion.
It is also expected to make some job cuts in renewables, although no specific targets have been given. BP has imposed a company-wide hiring freeze, with only a few exceptions, including frontline and safety personnel.
Auchincloss has promised a pragmatic approach since taking over in January, four months after Looney resigned for failing to disclose relationships with employees. In May, Auchincloss announced a $2 billion cost-saving drive by the end of 2026 relative to 2023, and he has also cut his executive leadership team from 11 to 10 members.