Why BP’s Elimination Of 2030 Oil Reduction Target Is No Real Surprise

British oil giant BP continued efforts to adjust its business plans to make itself more competitive with peer companies Monday, announcing it will abandon a goal of reducing its equity oil production by 2030. Originally set in 2020 at a 40% reduction by former CEO Bernard Looney, current BP management led by CEO Murray Auchincloss had reduced the goal in January to a 25% target.

Reuters quotes a company spokesperson as saying Monday the company’s overall goal of reaching net zero carbon emissions by 2050 remains unchanged despite the elimination of this near-term target. "As Murray said at the start of year... the direction is the same – but we are going to deliver as a simpler, more focused, and higher value company," the spokesperson said.

The elimination of the targeted production cuts follows a series of moves invoked by Auchincloss earlier in 2024 designed to dedicate a larger percentage of the company’s capital allocation on its core oil and gas business ventures. In July, Auchincloss imposed a hiring freeze and pause in new investments in the company’s wind energy business unit, reversing Looney’s strategy of aggressively investing in both onshore and offshore wind projects as a key part of the plan to replace lost revenues from cuts in oil production and to meet the company’s net zero goals.

Auchincloss followed that step with an even more aggressive move in September, announcing plans to completely divest BP’s suite of US onshore wind projects. BP currently owns 10 onshore wind operations through its subsidiary BP Wind Energy. At the same time, Auchincloss detailed plans to acquire full ownership of Lightsource BP, a solar-focused joint venture in which it owns 50%. The plan there would be add some wind development to the Lightsource BP portfolio.