More retrograde than re-set: BP Capital Markets Day 2025

The Australasian Centre for Corporate Responsibility (ACCR) is commenting on BP’s announcement to the London Stock Exchange ahead of its Capital Markets Day.

Key Points:

• BP plans to increase oil and gas production to 2.3-2.5mmboed in 2030, confirming the widely reported abandonment of its target to cut oil and gas production 20-30% by 2030.
• Guidance for upstream capex has increased to $10bn per annum by 2027, which will represent 66-77% of total capex.
• BP announced a reduction in annual capex into renewables of $5bn, now targeting a range of $1.5–2bn p.a.
• The company has not yet responded to a letter sent by investors with around £5 trillion in AUM to the Company calling for a say-on-climate and updates to its capex framework.
• No changes were made to the investment framework, despite investor pressure for more capital discipline.

Commenting on the results, Nick Mazan, UK Company Strategy Lead, ACCR, said:

“BP had no choice but to take action to restore investor confidence, however its plan to ramp up oil and gas production is the wrong diagnosis of the problem and will alarm many long-term investors.

“Investors have called for capital discipline, and BP’s now abandoned hydrocarbon production target was an important driver of capital discipline in this company.

“Last week, institutional investors with £5 trillion in AUM wrote to BP’s Chair calling for updates to its investment framework to impose greater discipline on upstream capex. Investors are unconvinced by BP’s ability to allocate capital responsibly - a concern heightened by the fact that BP’s portfolio of unsanctioned oil and gas projects are relatively expensive compared to peers.

“In terms of strategy, increasing oil and gas production is not a re-set, it is retrograde.

“Cutting its renewables investments does not remedy one of the greatest risks for long-term shareholders and drivers of poor performance, which is its out-dated business model predicated on pouring capex into its oil and gas portfolio even as demand is projected to start declining this decade.

“Since 2019, the capex BP allocated to its low carbon portfolio has been just one sixth of that allocated towards upstream and if BP wants to get serious about capital discipline upstream is where it needs to be looking.

“BP continues to behave reactively, demonstrating a lack of strategic conviction. The scrapping of the previously approved climate targets, without properly consulting investors, is reflective of this and raises concerns about the governance of the Company.

“It is disappointing to see that the company is unwilling to meet the asks of institutional investors, in not using this moment to announce a vote on the energy transition strategy. Investors must ensure that the company is held accountable for walking back on its emissions targets once again.

“The company needs to make significant changes if it is to prove to investors that it can manage risks as demand for oil and gas falls through the energy transition.”

Background

As reported in the Financial Times last week, 48 investors – including Phoenix Group, Rathbones Investment Management, Robeco and Royal London Asset Management – signed a letter sent to BP’s chair, Helge Lund, that called for a shareholder vote on any potential roll-back of the company’s climate targets and aims.

In January this year, ACCR released “BP: Capex beyond Paris”, which found that BP’s capital allocation towards new oil and gas projects is not consistent with the goals of the Paris Agreement despite a binding 2019 commitment to shareholders. It is available to read online.