BP Changes Course, Tacks Back Toward Oil and Gas, but Our Fair Value Estimate Unchanged

BP still uses the phrase “integrated energy company,” but it doesn’t mean the same thing it did when it first introduced it. With their recent pivot, they are no longer leaning into the energy transition and investing heavily in low-carbon projects. Instead, after years of underperformance following the transition strategy’s introduction, management is cutting low-carbon investment and increasing investment in oil and gas. Investors should welcome this, but BP is still behind peers like Shell, which made the same decision a few years ago.