BP unveils strategic reset with focus on oil and gas growth

BP unveils strategic reset to focus on oil and gas growth

LONDON, February 26, 2025 – BP has introduced a fundamental reset of its strategy, reallocating capital and reducing costs to enhance free cashflow, returns and shareholder value, the company said on Wednesday.

The company is shifting its focus by increasing investment in upstream oil and gas to around USD 10 billion per year and targeting production of 2.3 million–2.5 million boepd by 2030. In the downstream, BP will reshape its portfolio, high-grade operations, and conduct a strategic review of Castrol. By 2027, BP expects to generate an additional USD 3.5 billion-4 billion in operating cashflow from downstream operations.

“This is a reset BP, with an unwavering focus on growing long-term shareholder value,” CEO Murray Auchincloss said.

BP will reduce annual capital expenditure to USD 13 billion-15 billion until 2027, cutting transition investment to USD 1.5 billion-2 billion per year—over USD 5 billion lower than previous guidance. It will selectively invest in biogas, biofuels, EV charging, hydrogen, and CCS, primarily through capital-light partnerships.

Cost reductions are a key element of BP’s strategy, with structural cost savings of USD 4 billion-5 billion targeted by the end of 2027. The company also aims for USD 20 billion in divestments, including potential proceeds from the strategic review of Castrol and bringing in a partner for Lightsource BP.

“We will grow upstream investment and production to allow us to produce high-margin energy for years to come,” Auchincloss said. “We will focus our downstream on markets where we have leading integrated positions. And we will be very selective in our investment in the transition, including through innovative capital-light platforms.”

BP is also strengthening its balance sheet, targeting net debt reduction to USD 14 billion–18 billion by the end of 2027. Shareholder distributions will be maintained at 30–40% of operating cashflow, with share buybacks and a dividend expected to increase by at least 4% per share annually, subject to board approval.

“The board believes that this is an important strategic reset for BP and is confident that it, together with rigorous performance management, will deliver improved performance and sustainable value for BP’s shareholders,” BP chair Helge Lund said.

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