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3Q24 results saw BP confirm it will provide an update on its medium-term plans in February 2025, and in the investor call said it would “obviously” update its financial targets and aims.

We expect this could include a downgrade of transition capex, an upgrade of oil and gas production, and a likely downgrade or withdrawal of its upstream Scope 3 target. This would signal a tipping point for BP’s transition towards a clear scaling back of ambition. 

Our view

We view BP as a front-runner in the energy transition, driven by its strong ambition and progress in building low-carbon offerings, peer-leading low-carbon capex ambition, and oil and gas reduction targets. However, 3Q24 results suggest this leadership could be reassessed, with oil and gas reduction targets all but scrapped and a clear focus on prioritising shareholder returns over further investment. The key challenge now is how BP navigates the balance between advancing its transition strategy and delivering short-term returns to shareholders.

Priority questions ahead of 2025:

1) Quantification of levers to achieve net carbon intensity (NCI) targets:

• What is BP doing to prevent further downgrades to its emissions targets? With oil and gas production targets effectively scrapped, we see a likely downgrade or withdrawal of its upstream Scope 3 target.

2)  Increases in low-carbon investment:

• How will BP achieve its 50% capex target for low-carbon investments by 2025? Having only spent 23% in 1H24, with over $14bn committed to shareholder distributions in FY24-25, how will BP meet its low-carbon capex ambitions?

3) Can BP provide quarterly capex and earnings disclosures for its Transition Growth Engine (TGE) businesses?

• BP is the only Euromajor not reporting quarterly earnings for its power segment (Low carbon). Disclosing capex and earnings for TGEs is critical to assess its progress. Eni now reports combined financials for its low-carbon segment, setting a benchmark.

Key findings