BP CEO calls for pragmatism on green aims as profits halve

Murray Auchincloss says BP’s ‘aim’ to reduce oil and gas emissions by 20-30% was not confirmed as a ‘target’

BP’s new chief executive has claimed he can stick to the green goals set by his predecessor without risking shareholder returns by adopting a “more pragmatic” approach.

However, Murray Auchincloss said BP’s previous “aim” to reduce oil and gas emissions by between 20-30% from 2019 levels by the end of the decade was not confirmed as a “target” – and would only become one depending on a number of final investment decisions ahead.

Auchincloss, who replaced Bernard Looney on a permanent basis last month, said BP would create a higher value company for shareholders by moving towards its climate aims “without wasting money”.

He told the Guardian that BP’s plan to transform from an oil company to a net zero carbon energy company by 2050 remained.

“The destination is unchanged but we will get there as a much simpler and more pragmatic company, and we will move at the pace that society demands,” he said.

The former chief financial officer used his first set of financial results as CEO to assure investors that he would protect shareholder value by setting out plans to return more cash to investors. BP will spend $3.5bn on share buybacks over the first half of this year, and at least $14bn over the next two years.

The move prompted criticism from campaigners, who said the “excessive” payouts would be better spent on investing in the green transition. The company spent six times more on shareholder distributions last year compared with its investments in renewable energy, according to the IPPR thinktank.

BP set out plans to accelerate its share buyback programme alongside its financial results, which showed that profits halved last year to nearly $14bn (£11bn) after weaker oil and gas market prices caused revenues to slump across the industry. The better than expected annual profits were still the second-highest reported by BP since 2012.

Joseph Evans, a researcher at the IPPR, said: “BP has decided to prioritise its shareholders over investing in the green transition. With profits down on last year, you might expect BP’s executives to be looking for profitable investments in the growing industries of the future, like renewable energy. Instead, they’ve chosen to enrich their investors.”

Jonathan Noronha-Gant, a senior campaigner at Global Witness, said: “Shareholders should want to protect their long-term positions. That means demanding a rapid clean energy transition for companies like BP. These reckless shareholder payouts do the opposite.”

Auchincloss said: “We have three jobs: we invest, we pay tax, and we must pay our shareholders. We’re moving as fast as we can [on low-carbon investments]. I’m pushing this as fast as I can without wasting money – which is very important to shareholders.”

BP’s green ambitions have been cast in doubt since the abrupt departure of Looney, who stepped down in September after admitting that he had failed to fully disclose his previous relationships with colleagues.

Activist hedge fund Bluebell Capital Partners called for BP to drop its plan to curb its future oil and gas production shortly after acquiring a small stake in the company last September. The London-base hedge fund argued that its strategy had depressed its share price and presumed a “drastic decline in oil and gas demand, which we consider to be utterly unrealistic”.

Cover photo: Murray Auchincloss attends a panel during Abu Dhabi International Progressive Energy when he was interim CEO in October 2023. Photograph: Amr Alfiky/Reuters