BP to ditch renewables goals and return focus to fossil fuels

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(Reuters) - BP's chief executive will scrap a target to increase renewable generation 20-fold by 2030, returning the focus to fossil fuels, as part of a strategy shift announced on Wednesday to tackle investor concerns over earnings, two sources told Reuters.

BP's shares have underperformed rivals in recent years and the oil major has already dropped its target to cut oil and gas output by 2030, Reuters reported in October.

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The company will also make public plans to divest assets and cut other low-carbon investments to reduce debt and boost returns, the sources said.

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Across the energy sector, major companies that shifted their portfolios in response to the need to lower carbon emissions and curb climate change have returned the focus to oil and gas, where returns have become easier as fossil fuel prices have rebounded from pandemic lows.

The investor environment has also been transformed by the re-election of U.S. President Donald Trump, a climate sceptic and advocate of fossil fuels.

Pressure has become intense on BP after activist investor Elliott Investment Management built up a nearly 5% stake.

Elliott, known for pushing changes at companies such as Honeywell and Southwest Airlines, is demanding an overhaul, including tighter cost discipline at BP.

A separate source familiar with the matter told Reuters Elliott wanted BP to scale down its green energy spending and sell assets such as wind and solar.

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