BP's newly appointed CEO Murray Auchincloss has initiated a hiring freeze and halted new offshore wind projects as the company reevaluates its energy strategy, Reuters reports, citing sources familiar with the matter. Auchincloss's decisions mark a pivot away from BP's previous rapid expansion into renewables under former CEO Bernard Looney, reflecting a renewed emphasis on oil and gas investments amid investor dissatisfaction.
Sources within BP, who spoke on condition of anonymity, revealed that Auchincloss aims to slow investments in long-term, capital-intensive green energy projects such as offshore wind, which are not expected to yield returns for several years. This strategic shift comes as BP's profits from traditional fossil fuels have surged in the wake of global geopolitical events and the COVID-19 pandemic, contrasting with diminishing returns from renewable energy ventures.
BP has reassigned personnel from new renewables initiatives to focus on advancing ongoing projects, including offshore wind developments in Britain and Germany. Auchincloss, alongside Chief Financial Officer Kate Thomson, has prioritized investing in and potentially acquiring additional oil and gas assets, particularly in the Gulf of Mexico and U.S. shale basins where BP has established operations.
In a statement to Reuters, BP outlined Auchincloss's strategic priorities aimed at streamlining operations and enhancing profitability. The company underscored its commitment to delivering efficiencies and advancing growth projects aligned with its financial objectives.
Auchincloss, who assumed leadership in January following managerial changes, has implemented a $2 billion cost-saving initiative set to conclude by 2026, relative to 2023 expenditures. Despite these shifts, BP remains committed to exploring short-term returns in biofuels and select low-carbon businesses.
The company anticipates potential job cuts within its renewables division as part of broader restructuring efforts, alongside a company-wide freeze on hiring, except for essential frontline and safety roles.
