It was the first tentative step in transforming the company from an oil and gas producer to an energy provider investing an increasing amount of its fossil fuel profits into greener technology.

Five years ago, chief executive Bernard Looney, who was in charge at the time, accelerated that process with ambitious targets to cut oil and gas production 40% by 2030, while massively ramping up investment in wind and solar.

Today, BP could stand for “Back to Petroleum” following its announcement to shift back to oil and gas production and slash investment in renewables.

Why?

Profit and share price. There is simply less money in renewables than in oil and gas and some BP shareholders have become angry and impatient as they watch Shell produce double the returns they have seen while Exxon investors have received four times as much.

For most – but not all – shareholders, the number one job of a company’s board and management is to maximise the value of the company.

BP’s failure to do this has led to active speculation that BP should be taken over by a company that understands this. Or one that list its shares in the US where investors are less interested in a green transition.

Not all shareholders agree with BP’s radical strategy shift back to petroleum. Dozens of them signed a letter expressing concern about increasing fossil fuel production and want to have a say in the company’s direction of travel.

BP’s move follows rivals’ Shell and Norwegian company Equinor scaling back of plans to invest in green energy. Meanwhile, US President Donald Trump’s “drill baby drill” comments have encouraged investment in fossil fuels.

Many groups say that long term BP and others are pursuing a no-win strategy.

Climate concerns will become so acute that much of the oil and gas they’re searching for will have to remain in the ground and become unusable “stranded assets” of no commercial value.

However, the least patient shareholders tend to have the loudest voices.

As such, the cries of dismay from those concerned about the climate are being drowned out by those demanding that BP does what it knows best: drilling for oil and gas and returning those profits to shareholders, who include millions of pension savers.

They would say it is not BP’s job to question how much oil and gas the world wants or needs – that is the job for the societies it serves and their policy makers.

And, while the UK government has decided it wants no new oil and exploration in UK waters, over 90% of BP’s activities are outside the UK and the current US government thinks very differently.

The energy giant revealed the shift in strategy on Wednesday following pressure from some investors unhappy its profits and share price have been lower than its rivals.

BP said it would increase its investments in oil and gas by about 20% to $10bn (£7.9bn) a year, while decreasing previously planned funding for renewables by more than $5bn (£3.9bn).

The move comes as rivals Shell and Norwegian company Equinor have also scaled back plans to invest in green energy and US President Donald Trump’s “drill baby drill” comments have encouraged investment in fossil fuels.

Murray Auchincloss, BP’s chief executive, said the energy giant would be “very selective” in investing in businesses working on the energy transition to renewables going forward, with funding reduced tobetween $1.5bn and $2bn per year.

He said this was part of a strategy “reset” by the company to focus on boosting returns for shareholders.

Helge Lund, chair of BP, added that the new direction of the firm had “cash flow growth” at its heart.

Shares in the company climbed before Tuesday’s announcement but fell shortly after.

BP is one of several firms in the energy industry to return focus on oil and gas production, which has seen an increase in profits as prices have increased following lows seen during the Covid pandemic.

The firm said it plans to increase its production to between 2.3 million and 2.5 million barrels of oil per day by 2030, with hopes of “major” oil and gas projects starting by the end of 2027.

Mr Auchincloss is under pressure to boost profits from some shareholders, including the influential activist group Elliot Management, which took a near £4bn stake in the £70bn company to push for more investment in oil and gas.

In 2024, BP’s net income fell to $8.9bn (£7.2bn), down from $13.8bn the previous year.

However, some other shareholders, as well as environmental groups have voiced concerns over switching focus back to fossil fuel production.

Last week, a group of 48 investors called on the company to allow them a vote on any potential plans to move away from commitments to renewables.

The environmental group Greenpeace UK said the latest move was “proof that fossil fuel companies can’t or won’t be part of climate crisis solutions”.

Challenged on the reduced commitment to investing in renewable energy, Louise Kingham, BP’s senior vice president for Europe and the UK, said none of the changes announced on Tuesday would alter the UK’s green energy plans, which include three wind farms and carbon capture projects.

She said the shift to renewable energy sources had slowed but that BP’s ambition had “not changed” to become a net-zero company.

According to the International Energy Agency, no new fossil fuel projects are compatible with limiting global warming to 1.5C compared to pre-industrial levels,

“We just have to do this transition more smartly and more efficiently and try to get those returns for our owners because they are helping us to do that. If we don’t generate the returns, we can’t invest and do more,” Ms Kingham told a committee of MPs.

“It’s going to take everybody to move in concert to make this happen. It’s not just the decision of one company and what it chooses to do.”

The decrease in renewables will cover biogas, biofuels and electric vehicle charging projects, while BP will look to “capital-light partnerships” in other green energy such as wind and solar.

BP has already placed its offshore wind business in a joint venture with Japanese company Jera and is looking to find a partner to do the same with its solar business.

Five years ago, BP set some of the most ambitious targets among large oil companies to cut production of oil and gas by 40% by 2030, while significantly ramping up investment in renewables.

But in 2023, the company lowered this oil and gas reduction target to 25%.

In the five years since former chief executive Bernard Looney first unveiled his strategy, shareholders have received total returns including dividends of 36%.

In contrast, shareholders in rivals Shell and Exxon have seen returns of 82% and 160% respectively.

BP’s under performance has prompted speculation that it may be a takeover target or may consider moving its main stock market listing to the US where oil and gas companies command higher valuations.

Sir Ian Cheshire, who has held many executive roles at companies such as B&Q owner Kingfisher and Barclays bank, questioned whether BP’s latest move would work.

“I do wonder whether this sort of decision will look right in 10 years,” he told the BBC’s Today programme, added that the “overall energy transition” to renewables was “still going to come”.

“The climate change issue has not gone away, the science hasn’t changed,” he said.

It is widely expected to say later this month that it will scale back renewable projects and increase oil and gas production following similar moves from rivals including Shell and Equinor.

BP’s net income fell to $8.9bn (£7.2bn) in 2024, down from $13.8bn the previous year.

It said lower oil and gas prices, plus lower profits from its refineries, had dented how much money it had made.

Five years ago BP set a target of 50GW of renewables generation capacity by 2030.

That is expected to be abandoned on 26 February in a major change of strategy.

BP has already been scaling back on renewables.

In December it put the majority of its offshore wind assets into a joint venture with Japanese company Jera to separate them from the company’s core fossil fuel business.

It is expected to cut its previous $10bn commitment in renewables until 2030 by up to a half.

BP also froze new wind projects in June last year.

Activist shareholder Elliott Management hasbought a stake in BP to push for more investment in oil and gas, with investors anticipating board changes.

AJ Bell analyst Russ Mould said the sharp drop in profit “provided plenty of fodder” for hedge fund Elliott, with BP having done “little to reassure other shareholders that the current plan is working”.

He added that “a clear and credible plan is desperately needed if BP is going to remain the master of its own destiny”.

There is a scientific consensus that there is clear link between emissions from burning fossil fuels and climate change.

But recently oil and gas firms have been making plans to ramp up production.

Nick Butler, former head of strategy at BP, said big oil firms would invest in renewables “when they can see a clear profit”.

Last week Norwegian energy giant Equinor said it would halve investment in renewable energy over the next two years while increasing oil and gas production.

Chief executive Anders Opedal said “we don’t see the necessary profitability in the future” in renewables.

He said the transition to lower carbon energy was moving more slowly than expected, costs had increased, and customers were reluctant to commit to long-term contracts.

In December, Shell stepped back from new offshore wind investments.

US President Donald Trump has repeatedly expressed support for fossil fuels.

In January he once again vowed to withdraw the US from the Paris climate agreement, the world’s most important effort to tackle rising temperatures.

He also said the US would “drill, baby, drill”, embarking on a new age of oil and gas exploration.

After Trump’s executive order requiring the body of water – which is bordered by the US, Cuba and Mexico – be renamed the Gulf of America, BP referred to its operations in the area accordingly. This was following guidance from the US government according to a company spokesperson.

Human rights campaign group Global Witness said BP had invested nearly £9bn in oil and gas last year, compared with £1.3bn on renewables and low carbon energy.

Lela Stanley, head of fossil fuels investigations at the group, said: “As the world battles extreme weather disasters supercharged by fossil fuels, it is wrong that polluters such as BP can double down on the oil and gas that is driving climate breakdown.”

Elena Polisano, head of Greenpeace’s climate justice campaign, said pressure was growing on governments “to see these fossil fuel billions as fair game to be directed towards extreme weather recovery funds, as is already happening in Vermont and New York”.

She added that oil majors including BP were fuelling the climate crisis, “so it’s only fair to make polluters pay”.

Jeanne Martin from ShareAction, which campaigns for responsible investment, said it was “deeply concerning” that energy companies were walking back on renewable commitments as the effects of global heating, such as flooding and heatwaves, intensify.

Doubling down on oil and gas was a “financial risk that prudent and responsible investors must respond to decisively”, it added.