Energy giant BP has announced a strategy reset which will boost oil and gas investments and reduce the company’s focus on renewable energy.

According to a 26 February media release from the company, the change in direction aims to grow free cash flow, returns, and long-term shareholder value by “reducing and reallocating capital expenditure, significantly reducing costs and driving improved performance.”

That translates to a planned ~$10bn p.a. investment in oil and gas and forecast production by 2030 of 2.3 million to 2.5 million barrels of oil equivalent per day (boepd). In 2020, BP pledged to cut oil and gas output by 40% while rapidly growing renewables by 2030. The output reduction target was first lowered to 25% in 2023.

In terms of what the release refers to as “disciplined investment in the transition”, there will be selective investments in biogas, biofuels and EV charging; capital-light partnerships in renewables; focused investment in hydrogen/CCS; and investment in transition businesses of $1.5–2bn p.a. This last figure is over $5bn p.a. lower than “previous guidance.”

In an interview with the BBC, energy analyst Cornelia Meyer said that with returns of 37+%, BP was considerably less profitable than its peers, Shell (77%) and Exxon (147%). She added that alongside big energy, most of the larger financial institutions had scaled back on investments in renewables.

Watch the full interview here.