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BP (New York Stock Exchange:BP) surprise announcement that it has lowered climate targets and now plans to produce more oil and gas for longer Angry weather-focused investorsbut the company’s stock price has it gained 19% in the four days since the news, hitting its best levels in nearly four years.
“The decision that BP has taken is regrettable, (considering) that the targets were approved by investors at the last annual meeting,” said Angela Quiroga, environmental and ESG analyst for shareholder BP Union Investment.
Last May, BP (BP) won shareholder support for its strategy to cut hydrocarbon production by 40% by 2030 from 2019 levels; last Tuesday, BP said it now plans a 25% cut, although it did not change its long-term ambition to reduce emissions to net zero by 2050, and remains committed to using 50% of its spending budget on low-carbon businesses. carbon by 2030.
Changes in the world, from the voracious consumption of fossil fuels in the wake of the pandemic to the disruptions caused by the war in Ukraine, show that the much-touted energy transition is more complicated than first imaginedsaid BP (BP) CEO Bernard Looney The Wall Street Journal In an interview.
“If you sat in any meeting in Europe in the 2019 term and talked about energy, there was a conversation: It was about energy emissions,” Looney said. wsj. “Today, on the back of a pandemic, on the back of a war, on the back of a cost-of-living crisis, on the back of an energy crisis, (that) has changed to much more of a conversation. balanced”.
BP’s (BP) pivot is also the simple result of oil prices forecast to be unexpectedly higher for longer; as RBC Capital’s Biraj Borkhataria said, “It is better to talk about oil when it is at 80 dollars a barrel, than at 40 dollars.”
BP is not alone: Earlier this month, Shell (SHEL) chief executive Wael Sawan said his company would increase its natural gas business as a source of revenue and would be cautious about increasing spending on renewables.
“We cannot justify going underperform,” Sawan said on Shell’s post-earnings conference call after reporting a record profit for 2022.
