Oil giant hits pause on new sites as investors question switch to renewables

BP has put all new offshore wind projects on pause as the oil company’s new chief executive seeks to focus more heavily on fossil fuels.

Murray Auchincloss, who became permanent head of the business at the start of the year, has also frozen hiring in the offshore wind division. The Telegraph has the story.

The move, which was first reported by Reuters, follows investor discontent over the company’s switch to green energy.

However, it is likely to trigger a backlash from climate campaigners who have waged a years-long campaign to push BP into clean energy.

Mr Auchincloss is seeking to slow down investments in big budget, low-carbon projects, particularly in offshore wind, that are not expected to generate cash for years.

It suggests he is reversing the policies of Bernard Looney, his disgraced predecessor, who tried to move away from fossil fuels before quitting over inappropriate relationships last autumn.

The shift to greener energy has weighed on BP’s shares as returns from renewables shrank, while profits from oil and gas soared. The global recovery from the pandemic and then Russia’s invasion of Ukraine both drove prices to new highs.

Mr Auchincloss and chief financial officer Kate Thomson have prioritised investing in and even acquiring new oil and gas assets, particularly in the Gulf of Mexico and US onshore shale basins, where BP already has large operations, company sources briefed on the matter said.

BP will still consider investing in biofuels and some low-carbon businesses that can generate returns in the short term. 

This week, BP agreed to buy grain trader Bunge’s 50pc stake in Brazilian sugar and ethanol joint venture for $1.4bn (£1.1bn).

It is also expected to make some job cuts in renewables, although no specific targets have been given, sources told Reuters. They added that BP has imposed a company-wide hiring freeze, with only a few exceptions such as frontline and safety personnel.

Read the full story here.