bp to Increase Annual O&G Spend to $10B Amid Strategy Overhaul

Energy major bp will increase oil and gas capital expenditure to $10 billion per year through 2027, as the company prioritizes more lucrative opportunities across its energy portfolio. This decision follows the company’s corporate strategy reset, which focuses on upstream growth, downstream investments and selective expenditure in a smaller number of renewables with higher returns.

In the upstream sector, bp aims to generate over 15% in returns by boosting its investments in oil and gas. This will be achieved by strengthening its upstream portfolio, including securing access to discovered resources and revitalizing its exploration portfolio. The company expects 10 new projects to start operations by 2027 and an additional 10 by 2030. Over this period, bp also aims to increase production to between 2.3 and 2.5 million barrels per day.

“We will grow our upstream investment and production to allow us to produce high margin energy for years to come. We will focus our downstream on markets where we have leading integrated positions, and we will be very selective in our investment in the transition, including through innovative capital-light platforms,” stated Murray Auchincloss, CEO of bp, during the company’s 2025 capital markets update webinar on February 26. 

In the downstream sector, bp is consolidating its portfolio around core integrated positions. The company is increasing investment in this area to $3 billion by 2027, aiming to improve performance and grow cash-flow.

Meanwhile, bp will adopt a “capital-light” approach to low-carbon energy, reallocating investments to higher-return sectors such as oil and gas. The company will be selective in its low-carbon energy investments, choosing to focus on fewer key markets while leveraging existing infrastructure.

Total capital expenditure in bp’s transition businesses will be reduced to between $1.3 to $2 billion per year, a reduction of over $5 billion from previous expectations. In recent years, bp has reduced its Scope 1 and Scope 2 emissions by 38%, exceeding its initial target of a 20% reduction by 2025.