Oil giant BP cutting green investment

Environmentalists have reacted with dismay to oil and gas giant BP saying it will slash green investment and ramp up fossil fuel exploitation.

The United Kingdom-headquartered energy company shifted its focus on Wednesday, after investors complained about falling profits and a dented share price, prompting Chief Executive Officer Murray Auchincloss to say it was time for a "fundamental reset".

But, after BP said it will cut its investment in renewable energy in half, the environmental group Greenpeace UK said the company can now expect to see "pushback and challenge at every turn" from customers who want it to play its part in the fight against global warming.

Ian Cheshire, who has held executive roles at major companies including investment giant Kingfisher and Barclays PLC, also told Radio 4's Today program the public will be disappointed BP now appears to be less committed to the "overall energy transition" to renewables than it was.

"I do wonder whether this sort of decision will look right in 10 years," he said. "The climate change issue has not gone away, the science hasn't changed."

BP is not the only energy company to have shifted priorities recently. The UK-headquartered energy giant Shell and Norwegian company Equinor have also scaled back plans to invest in green energy.

Critics attribute the change to United States President Donald Trump's high-profile "drill baby drill" comments that seemed to signal a free-for-all among fossil fuel enterprises wanting to expand production.

BP's change of emphasis follows it setting ambitious targets five years ago to cut oil and gas production by 40 percent by 2030, while also investing heavily in renewables.

On Wednesday the company said it now plans to increase investment in oil and gas exploitation by 20 percent, to around $10 billion a year, while cutting investment in renewable energy by more than $5 billion a year, to around $1.5 billion.

Auchincloss said it was "reducing and reallocating capital expenditure" to its "highest-returning businesses" in a bid "to drive growth".

"This is all in service of sustainably growing cash ?ow and returns," he said, while noting that the company will now have "an unwavering focus on growing long-term shareholder value".

The company also said it will review its lubricants business, Castrol, and that it plans to make $20 billion in divestments by 2027.

International climate campaign group Global Witness said BP has clearly failed to deliver on its promises.

Spokesperson Alexander Kirk told the Evening Standard newspaper: "A few years ago BP undertook a massive public relations campaign to tell the world it was going green, highlighting its renewable energy investments. Now, while the world is reeling from fossil-fuel driven extreme weather, BP is doubling down on the oil and gas, creating climate breakdown."

Shares in BP fell by 2 percent immediately after the company's announcement.