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BP today unveiled a massive strategy U-turn with a new emphasis on oil and gas investment and a massive downgrade of its commitment to green energy.

Under pressure chief executive Murray Auchincloss said oil and gas investment will be increased to around $10 billion a year while investment in renewable and low carbon businesses will be cut by more than $5 billion a year to just $1.5 to £2 billion.

Production of oil will be grown to 2.3 to 2.5 million barrels of oil a day by the end of the decade as the British supermajor pivots to the “drill, baby, drill” world proclaimed by Donald Trump.

The company also said it was reviewing its lubricants business, Castrol, and targeting $20 billion in divestments by 2027.

Investment in businesses enabling the transition to net zero will be “focused on returns, fewer higher-returning opportunities, accessing growth more efficiently.”

There will be only “limited” further projects in hydrogen and carbon capture and a £500 million cost reduction in low carbon energy

Chief executive Murray Auchincloss said: "Today we have fundamentally reset bp's strategy. We are reducing and reallocating capital expenditure to our highest-returning businesses to drive growth, and relentlessly pursuing performance improvements and cost efficiency. This is all in service of sustainably growing cash flow and returns.

"We will grow upstream investment and production to allow us to produce high margin energy for years to come. We will focus our downstream on markets where we have leading integrated positions. And we will be very selective in our investment in the transition, including through innovative capital-light platforms. This is a reset BP, with an unwavering focus on growing long-term shareholder value."

Shell and Norwegian company Equinor have already scaled back their plans to invest in green energy.

Five years ago, BP’s previous chief executive Bernard Looney 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 target to 25%.

BP’s leadership is under huge pressure from activist hedge fund Elliott Management which has built up a stake worth almost £3.8 billion. Last year BP's net income fell to $8.9bn , down from $13.8bn the previous year.

But shareholders focussed on sustainability said there would be push back against the new strategy and warned BP could even face a legal challenge.

Vicki Chilton, artner in the energy & infrastructure team at law firm Birketts, said: “BP's decision to shift focus from green energy to oil and gas production could have several legal and regulatory implications. The company may face increased scrutiny from environmental groups and governments concerned about its environmental impact. This scrutiny could lead to potential legal challenges and regulatory pressures aimed at ensuring BP meets its climate commitments.

“Additionally, BP's reversal on its energy transition commitments might attract regulatory attention, especially if it conflicts with national and international climate goals..”

Lindsey Stewart, director of stewardship research and policy at Morningstar Sustainalytics: "BP's decision to reduce capital expenditure on renewables and double down on its fossil fuel assets will be shocking but not surprising to investors focused on sustainability. Having already cut back its energy transition targets in 2023, BP's subsequent underperformance compared with peers has created pressure for BP management to focus on sustainability of a financial rather than ecological nature. For sustainable investors, this will hardly be the end of the argument.

“Several of BP's shareholders decided to vote against the company's chair the last time BP reduced its commitment to energy transition, after not being offered the opportunity to vote on the company's adjusted strategy. That's a possibility again this year, unless the BP decides to table a "say-on-climate" vote at its upcoming AGM as 48 investors have already requested."

But the shift was immediately condemned by environmental groups. Global Witness campaigner Alexander Kirk said: “A few years ago BP undertook a massive public relations campaign to tell the world it was going green, highlighting its renewable energy investments."

“Now, while the world is reeling from fossil-fuel driven extreme weather, BP is widely expected to double down on the oil and gas creating climate breakdown."

“So why the U-turn? BP appears to be focusing on short-term profits to shareholders while energy prices are high, with the rest of the world picking up the tab from its climate-wrecking products."

“This is a company that cannot be trusted to deliver the clean energy transition. Fossil fuel companies like BP must be forced to pay for the climate damages they cause.”