Major oil companies reassess financial priorities
British energy giant BP has announced it will scale back investments, particularly in renewable energy projects, and refocus on strengthening its balance sheet, according to Mediafax. The move reflects growing concerns about the cost and pace of the energy transition.
The company has suspended its share buyback programme and will use available funds to reduce its $22 billion debt. “Debt reduction is our top priority,” chief financial officer Kate Thomson told the Financial Times. “A stronger balance sheet means lower financing costs and more available cash.”
Read also: Eurowind Energy plans a €65 million hybrid wind–solar park in Romania
BP wrote down $3.1 billion in renewable projects, mainly in solar and biogas, and cut its annual investment budget to around $13 billion, down from $14–16 billion in previous years. The group also aims to significantly reduce operating costs by 2027.
The decision unsettled investors, as many energy majors have relied on buybacks and dividends to reward shareholders. While suspending buybacks could save over $6 billion, the market reacted cautiously, with shares declining following the announcement.
Uncertainty around oil prices and rising global supply are prompting companies to adopt a more conservative stance. BP reported adjusted quarterly profits of approximately $1.5 billion, in line with analyst expectations, but debt levels have not declined significantly over the past year.
Other industry players, including Shell, TotalEnergies and Equinor, have signalled similar caution. The energy transition continues, but investment decisions are increasingly shaped by financial discipline and cost considerations.
Photo: freepik.com
