The global energy market is undergoing a transformation like never before, and companies at the heart of this change must adapt quickly or risk being left behind. BP, one of the world’s largest oil and gas giants, is proving it’s ready to adapt—but also willing to make tough decisions. In a bold move, the company has announced its second major business review in just six months. This decision signals not only the urgency of current challenges but also a shift in priorities, as it works to balance investor expectations, operational efficiency, and the evolving energy landscape.
Why a Second Review?
Business reviews are not uncommon for large corporations, but to conduct two in under half a year is a rare and telling move. Earlier this year, initiated a review aimed at boosting efficiency, trimming costs, and slightly rebalancing its energy portfolio. The February plan included cost cuts, a moderated approach to renewable investments, and an increased focus on oil production.
However, despite the earlier measures, pressure from shareholders—especially activist investors—has continued to mount. Many argued that renewable ventures were not delivering the expected returns and that the company needed to double down on its most profitable segment: fossil fuels. By August, it became clear to leadership that deeper, more aggressive changes were necessary.
Leadership’s Vision for Change
Under CEO Murray Auchincloss and incoming Chairman Albert Manifold, has sharpened its focus on delivering shareholder value. This means more than just cost-cutting—it’s about reshaping the company’s structure, investment strategy, and operational approach.
According to BP’s top management, the new review will:
- Identify Core Business Areas – Determine which segments of portfolio should receive the bulk of capital investment.
- Streamline Operations – Reduce bureaucracy, speed up decision-making, and remove inefficiencies.
- Accelerate Divestments – Sell non-core assets to strengthen the balance sheet and free up funds for high-return projects.
Cost-Cutting on a Larger Scale
Perhaps the most headline-grabbing part of BP’s announcement is the planned elimination of 6,200 office jobs, amounting to about 15% of its office-based workforce. This is a significant increase from the 4,700 job cuts announced earlier in the year.
The company aims to achieve “material incremental savings” from early next year, building on the $1.7 billion in structural cost reductions already achieved. By 2027, BP aims to be among the lowest-cost operators in its sector.
Layoffs of this scale are always controversial. While they reduce operational expenses, they also raise questions about morale, talent retention, and the impact on day-to-day operations. BP’s leadership, however, appears confident that the benefits will outweigh the drawbacks.
Strong Performance Amid Change
Despite the turbulence, BP’s recent financial results paint a picture of resilience. In the second quarter of 2025, the company posted underlying profits of $2.4 billion, outperforming analyst expectations. Strong refining margins, robust trading performance, and strategic cost management contributed to this success.
BP also announced a 4% increase in its dividend and committed to $750 million in share buybacks, underscoring its commitment to rewarding shareholders even during a period of transition. These moves, combined with the business review, have already started to bolster investor confidence, as reflected in a modest rise in BP’s share price after the announcement.
A Return to Fossil Fuel Focus
One of the most notable shifts in BP’s strategy is its pivot back toward oil and gas. Over the last decade, BP had made ambitious pledges to reduce its reliance on fossil fuels, aiming to become a leader in renewable energy. However, challenges in the renewable sector—such as low profitability, project delays, and regulatory uncertainty—have prompted a rethink.
BP’s recent oil and gas discovery off the coast of Brazil is a perfect example of why this pivot is appealing. The find is being hailed as the company’s largest in 25 years and holds significant production potential. This discovery, along with recent exploration successes in Namibia, reinforces BP’s confidence in its upstream portfolio as a stable source of revenue.
The Role of Renewables Going Forward
While BP is rebalancing its portfolio toward fossil fuels, it is not abandoning renewables entirely. The company has stated that low-carbon projects will still be part of its long-term vision, but these investments will be more selective and financially disciplined.
Offshore wind, bioenergy, and hydrogen remain on BP’s radar, but the emphasis will be on projects with clear profitability and competitive advantage. In other words, BP is moving from a rapid-expansion mindset to a quality-over-quantity approach in clean energy.
Investor Sentiment and Market Reaction
Investors have been cautiously optimistic about BP’s moves. Many see the new review as a sign that management is willing to make tough, pragmatic decisions to maximize returns. The share buyback program and dividend hike were also well received, as they provide immediate value to shareholders.
However, not everyone is convinced. Critics argue that BP risks falling behind in the global shift toward clean energy, especially if policy changes or market dynamics accelerate the transition away from fossil fuels. The coming years will test whether BP can strike the right balance between short-term profitability and long-term sustainability.
Global Context: The Energy Transition Challenge
BP’s second business review must also be understood in the context of global energy markets. The push for decarbonization is growing, but fossil fuels still account for the majority of global energy consumption. Energy companies are under pressure to maintain profitability while investing in the transition to cleaner sources.
Other major oil companies have also scaled back renewable ambitions in recent years, focusing more on high-return fossil fuel projects. BP’s approach is consistent with this industry trend, suggesting a broader rethinking of how and when the energy transition will unfold.
Divestments and Portfolio Optimization
As part of the review, BP reaffirmed its plan to divest assets worth $20 billion by 2027. The ongoing sale process of Castrol, its global lubricants business, is a key part of this effort. By shedding lower-margin or non-core assets, BP aims to free up capital for high-impact projects and improve overall efficiency.
These divestments will also help strengthen BP’s balance sheet, giving it more flexibility to navigate market volatility and fund future investments.
Looking Ahead: Opportunities and Risks
BP’s decision to launch a second business review in such a short period reflects a company that is both under pressure and determined to adapt. If executed well, the strategy could position BP as a leaner, more profitable player in the energy sector.
Opportunities include:
- Turning major oil and gas discoveries into revenue-generating projects quickly.
- Leveraging cost cuts to improve competitiveness.
- Using divestment proceeds to invest in high-return opportunities.
Risks include:
- Potential backlash over job cuts and reduced renewable investments.
- The possibility of falling behind competitors in clean energy innovation.
- Execution challenges in delivering large-scale cost reductions without operational disruptions.
Conclusion
BP’s second business review in six months is more than just a cost-cutting exercise—it’s a strategic reset. By doubling down on fossil fuels, tightening its investment discipline, and streamlining operations, BP is signaling that profitability and shareholder returns are its top priorities in the near term.
The energy market is unpredictable, and the balance between traditional and renewable energy investments is delicate. BP’s gamble is that a stronger focus on its core strengths, combined with targeted investments in cleaner technologies, will allow it to navigate the transition successfully.
Whether this approach will deliver long-term success remains to be seen, but one thing is certain: BP is not standing still. The company is making bold moves to shape its future, and in doing so, it has set the stage for a fascinating chapter in the ongoing evolution of the global energy industry.
