
BP Plc Chief Executive Officer Murray Auchincloss appeared at a key US energy major conference in Houston on Tuesday, talking up his reset for the troubled British oil major.
Under pressure from activist Elliott Investment Management, a new strategy outlined in late February focused firmly on raising cash flow by focusing on oil and gas production and scaling back renewable investments — his plans have had a mixed reception. Speaking at CERAWeek by S&P Global, he argued for his vision for a leaner, more focused BP.
The company needs to “focus on fewer things, with higher returns,” he said.
Auchincloss said he’s met 40% of shareholders over the past few weeks and they all seem “pretty satisfied.” He outlined plans to grow production in two key regions: the US and the Middle East. He’s bullish on prospects in the US Gulf, where BP has 10 billion barrels of resources to develop. He also talked up plans to work on Iraq’s Kirkuk oil field and expanding in Abu Dhabi.
He said the company would remain in renewable energy markets because its giant trading business needed a steady supply of electrons, but by using partnerships, it could redirect capital toward oil and gas projects that offered higher rates of return.
BP has already placed its offshore wind assets in a joint venture with Japanese utility JERA. Auchincloss said in Houston that it planned to bring in a partner for its Lightsource solar business. That would actually enable the business to expand its potential rate of development to 6 gigawatts to 8 gigawatts a year from around 5 gigwatts today.
Since unveiling the strategy on Feb. 26, BP shares have fallen almost 6%, losing almost twice as much as larger UK rival Shell Plc.
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
MORE FROM THIS AUTHOR
Bloomberg