blood pressure (NYSE:BP) surprise announcement that it has scaled back climate targets and now plans to produce more oil and gas for longer has angered climate-focused investors, but the company’s share price gained 19% in the four days since the news, reaching its best levels in nearly four years.
“The decision made by BP is regrettable, [taking] Considering the targets were approved by investors at the last annual meeting,” said Angela Quiroga, environmental and ESG analyst at BP shareholder 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 to cut 25%, although it has not changed its long-term ambition to cut emissions to net zero by 2050, and remains committed to using 50% of its spending budget for low-carbon operations by 2030.
Changes around the world from rampant fossil fuel consumption stemming from the pandemic to disruption caused by the war in Ukraine are proving that the much-vaunted energy transition is more complicated than first thought, BP ( BP ) Chief Executive Bernard Looney said. The Wall Street Journal in the interview.
“If you sat in any meeting in Europe in 2019 and talked about energy, there was one conversation: it was about energy emissions,” Looney said. WSJ. “Today, against the background of the pandemic, against the background of the war, against the background of the cost of living crisis, against the background of the energy crisis, [it] moved on to a much more balanced conversation.”
BP’s ( BP ) turnaround is also a simple result of forecasted oil prices being unexpectedly higher for a long time; as RBC Capital’s Biraj Borkhataria said, “It’s better to talk about oil when it’s $80 a barrel than $40.”
BP is not alone: Earlier this month, Shell ( SHEL ) CEO Wael Sawan said his company would grow its cash cow natural gas business and be cautious about increasing spending on renewables.
“We cannot justify the low return,” Sawan said at Shell’s conference after reporting record 2022 profits.