Why is bp Scrapping Sustainable Sourcing for Oil & Gas?
bp is revisiting its oil and gas strategy, drawing attention to supply chain complexities in the renewable sector, while continuing to promise net zero goals.
Murray Auchincloss, CEO of bp, has confirmed the company is conducting a full review of its oil and gas portfolio, while pushing through further cost reductions.
In the second-quarter and first-half 2025 results, Murray says: “so far this year we’ve brought five new oil and gas major projects onstream, sanctioned four more and made ten exploration discoveries, including the significant discovery in Bumerangue block in Brazil.”
Oil & gas gains momentum
The Bumerangue discovery, found in the deepwater Santos Basin, covers more than 300km² and is being considered as a potential production hub. It also marks bp’s biggest oil and gas find in 25 years.
The find follows similar discoveries in the Gulf of Mexico and North Africa, strengthening bp’s upstream portfolio.
In early 2025, the company reduced investment in clean energy projects and redirected billions of dollars into fossil fuel developments.
The move brings pressure from investors and climate organisations, especially in light of targets from the International Energy Agency (IEA).
The IEA projects that global renewable energy capacity needs to grow by 2.7 times by 2030 to align with net zero ambitions.
Even if countries exceed their existing goals by 25%, the world still falls short of what’s needed.
While fossil fuel production remains more straightforward in terms of scale and infrastructure, renewable energy is proving harder to scale up quickly, putting additional pressure on companies like bp, which must balance operational realities with long-term climate targets.
Renewable supply chains under scrutiny
bp’s pullback from renewables reflects wider industry concerns about supply chain complexity in clean energy production.
As Maersk explains, building renewable infrastructure requires solving a broader set of logistical, regulatory and spatial challenges.
Solar energy, considered the most mature and scalable technology, relies heavily on China for photovoltaic (PV) components.
However, solar deployment needs specialised cargo handling, tight delivery windows and strategic installation locations, which make it more vulnerable to disruption.
Wind energy brings even greater complexity, as large scale logistics can cost companies millions if any error occurs.
Despite the challenges, Maersk argues that integrating logistics partners early can make renewable energy supply chains more resilient.
McKinsey & Company supports this view, projecting solar and wind capacity outside China will triple by 2030.
Yet the firm also warns of vulnerabilities: raw material price shocks, regulatory uncertainty and skills shortages can all affect supply chain stability.
bp has already exited onshore wind in the US and mobility assets in the Netherlands, suggesting it is scaling back complex, lower-margin projects to focus on traditional high-yield energy production.
Balancing investor pressure and emissions goals
In Q2 2025, bp reported an underlying replacement cost profit of US$2.4bn, down 15% from the previous year but still exceeding analyst expectations.
Cash flow from operations rose to US$6.3bn, contributing to a reduction in net debt to US$26bn.
The company has already cut US$1.7bn in structural costs since 2023 and has launched a US$750m share buyback programme for the second quarter.
In the first half of 2025, bp spent US$3.4bn on oil and gas projects—more than double what it allocated to gas and low-carbon energy combined.
Even so, the company maintains its ambition to reduce operational emissions by 40% and cut oil and gas production by 25%, both by 2030.
Its long-term pledge to reach net zero by 2050 still stands, though the route there now looks more commercially driven.
How bp plans to meet climate targets while doubling down on oil and gas remains uncertain.
With supply chains in renewables proving more fragile than expected, and fossil fuel operations offering more stable returns, the energy major seems to be rebalancing its priorities in line with operational and investor expectations.
