For decades, BP—the U.K.-based oil and gas giant that is No. 25 on the Fortune Global 500—has tried to position itself as an energy company with the bigger picture in mind.
From an eight-year advertising campaign in which it branded itself as “Beyond Petroleum,” to the extensive mea culpas following 2010’s Deepwater Horizon catastrophe in the Gulf of Mexico, BP wore its environmental intentions on its sleeve. The rhetoric was matched by substantial investment in renewables, such as buying Lightsource, Europe’s largest solar energy producer.
Those efforts culminated in a February 2020 announcement from incoming CEO Bernard Looney that BP intended to be a net-zero carbon emitter by 2050. While climate activists scoffed at the distant target, the company was the first, and to date the only, major oil company to commit itself to such a goal. “We want to change—this is the right thing for the world and for BP,” Looney said in a statement.
Things certainly did change, but not in the ways BP had anticipated.
Instead, the past five years have included a succession of events that have hammered BP’s strategic direction. It started with COVID, which upended the global economy and energy markets, torpedoing oil prices. Russia’s invasion of Ukraine was another shock, forcing BP to divest its 20% stake in Rosneft and take a $25 billion write-down. Then, in 2023, Looney resigned abruptly after admitting he hadn’t disclosed prior relationships with BP employees to the board. And in what delivered the biggest blow to BP’s long-term plans, Donald Trump was reelected U.S. president, promptly withdrawing the nation from the Paris climate accords and giving oil and gas producers a champion in the White House.
That shifting terrain has left BP on unstable ground. While shares of its energy company peers soared on increased demand for fossil fuels and the promise of Trump’s deregulatory regime, BP’s fell nearly 18% in 2024. It reported a $2 billion loss in the fourth quarter, and said it is preparing a major shift in strategy. That weakness created an opportunity for activist investor Elliott Management to pounce. The firm, led by the bare-knuckled Paul Singer, has amassed a 5% stake and is reportedly calling for BP to sell off assets. A merger with Shell may also be in play.
Responding to that pressure, CEO Murray Auchincloss, the 27-year BP veteran who replaced Looney, on Feb. 26 announced “a fundamentally reset strategy” at an investors’ presentation. The company will cut its investment in renewables, increase oil and gas spending by $10 billion annually, and look to sell off $20 billion in assets, which could include Castrol, its lubricant business. (BP and Elliott Management did not respond to requests for comment.)
BP’s troubles stem from its pivot to renewable energy before financial markets were ready for it, says Usha Haley, a professor of international business at Wichita State University. “In an industry where timing is everything, BP made the right bet at the wrong time,” she says.
