**: Zhitong Finance App
Aggressive hedging** Bluebell Capital Partners said that British Petroleum (BP.).US) plans to cut oil and gas production are wrong for shareholders, and the company should abandon that goal. Giuseppe Bivona, partner and chief investment officer of the hedge**, said on Tuesday that the demand for oil still exists and that it would be "irrational and crazy" not to adjust and adapt strategies to reflect the true pace of the world's transition to low-carbon energy.
Bivona said BP's new chief executive Murray Aucchincloss had the opportunity to change strategy, adding that he had not asked the company to stop investing in clean energy entirely. He declined to comment on the size of Bluebell's stake in BP, but said it was a big position for the company.
In a letter to BP chairman Helge Lund in October, Bluebell reportedly said BP should invest an additional $1.5 billion a year in oil and gas production by 2030 and stop further investment in renewables and electricity. In a separate letter dated 26 January, it reiterated its request.
BP's pledge to scale back its oil and gas operations was introduced in 2020 by the company's former chief executive, Bernard Looney, and was hugely sought after by environmentalists at the time, but failed to fully convince investors. Aggressive investment propositions add to the pressure on Auchincloss, who was appointed this month to replace firm Looney. Looney initially pledged to reduce oil and gas production by 40% by 2030 from 2019 levels, but scaled back the cut to 25% last year. BP said the change was in response to turmoil in Western energy markets. Bluebell, known for agitating change at Danone, has said it will demand Looney's resignation if Looney leaves in September after admitting failing to fully disclose past relationships with colleagues.
Gordon Birrell, BP's executive vice president for production and operations, said Monday that BP's strategy remains to enter the clean energy sector, but in this shift, it will continue to invest in oil and gas. BP will invest between $14 billion and $18 billion a year by 2030, more than half of which will be in the oil and gas sector, he said. Birrell said Auchincloss was pragmatic and BP's capital framework would respond to the pace of the transition.
Bluebell believes that this poses a challenge to traditional energy companies such as BP as the return on investment of renewable energy projects is typically lower than that of oil and gas; BP's reduction in oil and gas production means the company is moving away from hydrocarbons at a faster rate, which is undermining shareholder value. The ** recommends that between 2023 and 2030, BP should reduce investment in bioenergy, hydrogen and renewables by $28 billion, or around 60% of the original plan. The hedge** added that BP has no chance of competing with specialist green energy players in the renewable energy sector.
"We've been exploring and experimenting over the last few years, but I think we're getting more and more clear about the type of business we want to get into, because we can't be in everything," Birrell said. We want shareholders, big and small, to have a say and BP will have a debate with them about its strategy. ”