BP 4Q24 | Climate Transition Analysis

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A ‘fundamental reset’ to strategy

BP (BP:LSE)

Our view

BP’s 4Q24 results show it shifting from a front-runner in the energy transition to a more reactive strategy. The company will put forward a ‘fundamental reset’ to its strategy at its February 26 update, building on the actions over the last 12 months where it dropped its oil & gas production reduction target and scaled back biofuels, wind, and hydrogen. The results were also missing the usual commentary on its Transition Growth Engines (TGE) business, which we believe indicates a wholesale rethink of its low-carbon strategy. BP has been through many CEOs and strategies - this looks like the final blow to its “Aims,” including its scope 3 targets. The company will need to explain how it plans to deliver emissions and intensity reductions while scaling back low-carbon investment and growing production.