BP scales back green agenda to drill for oil in Gulf of Mexico after £2bn profit

BP to drill new oil field in Gulf of Mexico as it softens green agenda in favour of fossil fuels

The London-listed oil major has given the green light for a sixth site 250 miles off the coast of New Orleans that will pump 80,000 barrels of oil a day.

Chief Executive Murray Auchincloss has promised to focus on expanding its oil and gas business and returning more cash to shareholders.

This marks a shift from the green approach established by his predecessor Bernard Looney, who had been pushing clean energy, with big bets on hydrogen and wind power.

The update came after the group reported profits of £2.2bn for the three months to the end of June, beating analysts’ forecasts. That was helped by a lower tax bill.

In a further boost to shareholders, BP raised its dividend by 10 per cent to 8 pence a share and said it would continue to buy back £1.36 billion of shares per quarter for the rest of the year.

In total, BP has paid out £11.5bn to shareholders since June 2023.

Auchincloss said BP was committed to delivering “a simpler, more focused and higher value company” to its shareholders. BP shares fell 0.3 percent yesterday.

Mark Crouch, market analyst at trading platform eToro, said: ‘With the constant balancing act between investing in renewable energy methods and maintaining profits and shareholder returns that predominantly come from fossil fuel operations, BP will be guided by what is in the best interests of its shareholders first and foremost.

“And with wind and solar power struggling to meet rising global energy demand, while demand for oil and gas continues to rise, that appears to be exactly what BP is doing.”

The move comes after activist investor Bluebell Capital Partners wrote to BP chairman Helge Lund late last year with concerns about how the FTSE 100 energy giant is run.

The London-based hedge fund has criticised BP’s green transition plan as “irrational” and said the strategy has depressed its share price.

Investors are concerned about BP’s underperformance compared with rival Shell and US energy giants Exxon Mobil and Chevron.

Looney’s surprise departure in September also cast a pall over BP.

He had to resign after not being “fully transparent” about his personal relationships with his colleagues.

• Trading giant Vitol has handed out a record £5bn to its senior employees in another big energy spend. The group revealed last year that it paid just under £11m each to the 450 employees who own the company, which was founded in Rotterdam in 1966. As well as the huge amount of money, the world’s largest independent commodities trader, based in Switzerland, also posted £10.2bn in profits for 2023.