In key news on UK stocks, BP PLC’s (GB:BP) CEO Murray Auchincloss has initiated a hiring freeze and temporarily stopped the company’s renewable projects amid its renewed focus on oil and gas. According to Reuters, this move is part of the company’s effort to regain investor confidence following concerns over its energy transition strategy. BP shares gained over 1% as of writing.
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BP is an energy company involved in the exploration, production, and distribution of oil and natural gas.
BP’s U-Turn on Energy Transition
The latest updates further marked BP’s U-turn on its energy transition approach, which emphasized moving away from fossils while focusing on renewables. In February 2023, BP adjusted its plans to reduce oil production, aiming for a 25% reduction from 2019 levels, compared to the previous target of a 40% reduction. The company also announced plans to increase its annual spending on fossil fuel production by around $1 billion.
As part of Auchincloss’s new changes, BP will reduce its investments in large-scale, low-carbon projects, especially offshore wind, that aren’t expected to pay off for years. The oil giant will focus its investments on biofuels to generate more returns in the short term. Earlier this week, the company acquired full control over the BP Bunge Bioenergia S.A. joint venture, a leading biofuel-producing company in Brazil.
Additionally, the company is considering some job cuts in renewable business. Reportedly, the company-wide hiring freeze would exclude frontline and safety workers.
These changes are part of Auchincloss’ efforts to revive the business since he assumed the CEO role in January 2024. In May, he announced a $2 billion cost-saving initiative to be achieved by the end of 2026. Auchincloss also reduced the executive leadership team from 11 to 10 members.
Is BP a Good Share to Buy?
According to TipRanks consensus, BP stock has received a Strong Buy rating based on 11 Buys, one Hold, and one Sell recommendation from analysts. The BP share price forecast is 636.67p, which implies a growth rate of 34% at the current trading level.
