BP imposes hiring freeze and halts new offshore wind projects
The head of BP has imposed a hiring freeze and halted new offshore wind projects, in an apparent attempt to placate investors who are unhappy with the oil company’s green targets, according to The Guardian.
Murray Auchincloss, BP’s former finance chief, took up the role of CEO in January after the departure of his predecessor, Bernard Looney, with a promise to focus on delivering value for shareholders.
BP has come under pressure from shareholders over its green targets because some renewable projects have proved more costly than expected.
In response, the company set out plans earlier this year to cut oil and gas production by just 25% between 2019 and 2030 – well short of its previous target of a 40% reduction over the same timeframe.
Auchincloss is reportedly looking at investing in and possibly acquiring new oil and gas assets to strengthen BP’s existing operations, particularly in the Gulf of Mexico and the shale basins acquired from the Anglo-Australian miner BHP in Texas.
Earlier this month BP’s rival Shell set out its own plans to scale back its green growth ambitions, reducing the number of staff working on low-carbon solutions by about 200 roles while shifting the focus towards high-profit oil projects and expanding its gas business.
Over the past four years, BP has built up a sizeable portfolio of offshore wind projects capable of generating 9.5 gigawatts of energy in total in the UK, Germany and the US that are yet to be developed. It wants to focus on these assets, it is understood, rather than bidding for new renewable projects.
It has reassigned dozens of people tasked with finding new renewables opportunities to its offshore wind projects in Britain and Germany, Reuters reports, and could make some job cuts in renewables. The hiring freeze is expected to have a few exceptions for frontline roles.
BP shares were up more than 1% on Thursday, but have underperformed rivals in recent months, prompting speculation that the company could be a takeover target. Looney set out a “net zero” plan that originally aimed to cut the company’s oil production by 2030, while others plan to increase their fossil fuel production.
BP is also investing in biofuels and low-carbon businesses that can generate returns in the short term. A week ago the company agreed a $1.4bn (£1.1bn) deal to take full ownership of its Brazilian sugar and ethanol joint venture, but it said it was scaling back plans for development of new biofuels projects.
Auchincloss has pledged a “more pragmatic” approach to BP’s green targets since taking up the CEO role permanently in January. In May, BP said it would cut $2bn of costs by the end of 2026, after reporting lower than expected profits for the first quarter of the year. Auchincloss said he planned to make the savings by choosing fewer new projects to invest in over the coming years.
