BP profits drop as it says it will reset strategy

Oil giant BP has said it will “fundamentally reset” its strategy as profits dropped sharply last year.

It is widely expected to say later this month that it will scale back renewable projects and increase oil and gas production following similar moves from rivals including Shell and Equinor.

BP’s net income fell to $8.9bn (£7.2bn) in 2024, down from $13.8bn the previous year.

It said lower oil and gas prices, plus lower profits from its refineries, had dented how much money it had made.

Five years ago BP set a target of 50GW of renewables generation capacity by 2030.

That is expected to be abandoned on 26 February in a major change of strategy.

BP has already been scaling back on renewables.

In December it put the majority of its offshore wind assets into a joint venture with Japanese company Jera to separate them from the company’s core fossil fuel business.

It is expected to cut its previous $10bn commitment in renewables until 2030 by up to a half.

BP also froze new wind projects in June last year.

Activist shareholder Elliott Management has bought a stake in BP to push for more investment in oil and gas, with investors anticipating board changes.

AJ Bell analyst Russ Mould said the sharp drop in profit “provided plenty of fodder” for hedge fund Elliott, with BP having done “little to reassure other shareholders that the current plan is working”.

He added that “a clear and credible plan is desperately needed if BP is going to remain the master of its own destiny”.

There is a clear link between emissions from fossil fuels and global warming.

But recently oil and gas firms have been making plans to ramp up production.

Nick Butler, former head of strategy at BP, said big oil firms would invest in renewables “when they can see a clear profit”.

Last week Norwegian energy giant Equinor said it would halve investment in renewable energy over the next two years while increasing oil and gas production.

Chief executive Anders Opedal said “we don’t see the necessary profitability in the future” in renewables.

He said the transition to lower carbon energy was moving more slowly than expected, costs had increased, and customers were reluctant to commit to long-term contracts.

In December, Shell stepped back from new offshore wind investments.

US President Donald Trump has repeatedly expressed support for fossil fuels.

In January he once again vowed to withdraw the US from the Paris climate agreement, the world’s most important effort to tackle rising temperatures.

He also said the US would “drill, baby, drill”, embarking on a new age of oil and gas exploration.

After Trump’s executive order requiring the body of water – which is bordered by the US, Cuba and Mexico – be renamed the Gulf of America, BP referred to its operations in the area accordingly. This was following guidance from the US government according to a company spokesperson.

Human rights campaign group Global Witness said BP had invested nearly £9bn in oil and gas last year, compared with £1.3bn on renewables and low carbon energy.

Lela Stanley, head of fossil fuels investigations at the group, said: “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, head of Greenpeace’s climate justice campaign, said pressure was growing on governments “to see these fossil fuel billions as fair game to be directed towards extreme weather recovery funds, as is already happening in Vermont and New York”.

She added that oil majors including BP were fuelling the climate crisis, “so it’s only fair to make polluters pay”.