BP has announced their intention to refocus investment back into their core oil and gas business as a strategy to revitalise the company. The company has significantly lagged behind its industry peers, only seeing 6% growth over the last 5 years compared to the 113% rise of ExxonMobil.
The company is expected to report $20 billion of divestments by 2027 with the intention of reducing net debt and increasing cash flow. Investment in renewables will be slashed by 75% from this strategic review. This move back to BP’s roots is good for efficiency, furthered by the increase in efficiency of oil drilling which lowers the breakeven point significantly.
This restructuring comes at a good time as energy demand is forecasted to increase over the next few years. This is furthered by Trump’s executive order to pump up oil production, citing a ‘national energy emergency’.
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