Once Europe’s most progressive major, BP, has reset its strategy back to investing heavily in oil and gas. In February, BP CEO Murray Auchincloss announced the company would return its focus to its core business in oil and gas, an attempt to recover from poor performance and improve shareholder returns.
Auchincloss stated during CERAWeek last month that BP will reload its exploration hopper by identifying more potential drilling prospects, leveraging AI along the way for faster seismic studies. He highlighted Iraq and the Paleogene deepwater in the Gulf of Mexico (recently renamed “Gulf of America” by President Donald Trump) as two major growth areas. Auchincloss said that BP is also looking into projects in Oman, Libya and other Middle Eastern and North African countries, after recently signing a major development agreement with Iraq for the giant Kirkuk field BP discovered in 1929.
In its renewable businesses, BP has written down billions of dollars for some of its offshore wind projects on the United States’ east coast, and it will try to leverage third party financing for its remaining wind and solar business, including a partnership with Japanese company JERA Co.
What has led BP to shift its approach? Many factors over its more than 100-year history have fed into the decision.
A Storied History
Since its founding in modern-day Iran in 1908, BP has expanded far beyond the Middle East. The company grew significantly in the North Sea, Alaska’s Prudhoe Bay, Gulf of Mexico/America, Angola, Azerbaijan and Latin America, including Columbia and Trinidad and Tobago.
BP’s most significant period of gain was near the turn of the millennium, when it acquired Amoco in 1998 and Arco in 2000, led by John Browne, during the oil price downturn. BP’s acquisition of Amoco started the industry’s first merger and acquisition wave. Exxon and Mobil merged a year later. Then, Chevron acquired Texaco in 2001 and Unocal Corp. in 2005. BP also grew its downstream and trading business significantly during this period.
For the following 20 years, it was a three-horse race to lead the industry among ExxonMobil, BP and Shell. All three wielded worldwide portfolios, global downstream presence, technological leadership and financial power.
But BP lost significant ground following the Deepwater Horizon incident on April 20, 2010 in the (then named) Gulf of Mexico – the largest oil spill in history. The incident cost BP some $65 billion in cleaning costs, penalties and compensation for affected businesses along the Gulf coast. It also killed 11 oil workers at the site. BP’s market capitalization fell roughly $100 billion, and the company started to lag behind its rivals.
Trying to Recover
Then CEO Tony Hayward worked hard to keep the company afloat during the Deepwater Horizon crisis, but he eventually resigned in 2010 following a famously ill-advised comment. Hayward said, “There’s no one who wants this thing over more than I do. I’d like my life back,” in an interview during the time that the victims’ families were still grieving.
BP then turned to Bob Dudley, an American who joined BP from the Amoco side of the earlier merger to manage the crisis. Dudley was the company’s first non-British CEO. He led significant asset sales, totaling more than $75 billion, to help cover Deepwater Horizon costs. Dudley led BP until 2020 and furthered the company’s drive to invest more in renewable energy.
Bernard Looney emerged as BP’s new CEO in 2020, announcing the company would cut oil production 40 percent before 2030 and move even more aggressively toward clean energy. He also led BP through an exit of its Russian assets, a significant portion of the company’s portfolio, after Russia invaded Ukraine in 2022. But Looney’s tenure was short-lived: He resigned in September 2023 after failing to fully disclose details of personal relationships with colleagues.
Auchincloss, a Canadian citizen also fromerly Amoco, became CEO in January 2024, quickly slowing investment in renewables, including offshore wind along the U.S. east coast. Collectively, BP’s many strategic and leadership shifts have led the company to significantly under-perform compared to its peers. As of March 2025, BP’s market capitalization was a meager $87 billion, compared to $485 billion for ExxonMobil, $276 billion for Chevron and $206 billion for Shell.
Will BP Rise Again?
The challenge for BP is: How long can its oil and gas reserves last? The industry in general, including BP, has de-emphasized exploration for several years. Major discoveries such as those in Guyana have been few. BP has a stronger shale oil portfolio than its European peers, as it bought BHP’s entire portfolio of unconventional assets in the Permian and Eagle Ford basins in 2018. But leaders at CERAWeek in March 2025 stated that U.S. oil production would peak before the end of this decade, leading to the need for many companies to find low-cost oil resource replacements. As BP returns its focus to oil and gas, an old question also comes to the forefront for the industry as a whole: Where will growth opportunities be in the long run?