On Thursday, June 27, new British Petroleum (BP) CEO Murray Auchincloss announced that the company is pausing all new offshore wind projects and imposing a company-wide hiring freeze, which has few exceptions, as it reinvigorates its emphasis on fossil fuels. The move comes as stockholders were reportedly upset with the company’s previous effort to shift toward green energy.
Pressure has grown on the company as shares from renewables have fallen. Meanwhile, profits from oil and gas have soared with increased global demand driven in part by Russia’s war in Ukraine and COVID-19 pandemic recovery. Market demand has reportedly led BP to invest in oil and gas assets in the Gulf of Mexico and the United States.
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As a result of the pause in new offshore wind projects, dozens of employees have been reassigned from renewable projects and unspecified job cuts in renewables are reportedly on the table.
However, BP said that it’s still considering investing in low-carbon business and biofuels if the investment quickly generates short-term returns.
The decision to renew BP’s focus on gas and oil marks a major reversal from Auchincloss’ predecessor, Bernard Looney, who had planned on rapidly moving the company away from fossil fuel reliance. Auchincloss took over the oil giant in January, four months after Looney resigned for failing to reveal relationships with employees.
In May, Auchincloss announced a $2 billion cost saving plan for BP by the end of 2026. BP said in a statement to Reuters that the new CEO had introduced six priorities “to deliver as a simpler, more focused and higher value company.”
Pressure on Auchincloss is growing as BP shares have underperformed compared to rivals in the oil sector in recent months. There is speculation that the company could be a target for takeover.
