BP reports 2nd-qtr loss after major write downs, halves dividend

BP Plc slashed its dividend for the first time in a decade and set out new targets to accelerate its shift to greener energy after the coronavirus pandemic upended the oil business. The U-turn in its dividend policy was expected after European peer Royal Dutch Shell Plc slashed its own payout in April. Big Oil’s generous dividends have long been its main attraction to shareholders, and the move — hastened by the virus but made inevitable by the transition to cleaner energy — redraws the company’s investment profile.

BP paired the payout news with more details for investors of its net-zero strategy — bringing forward announcements expected in September. It’s targeting a radical 40 per cent decline in hydrocarbon production, a 10-fold increase in low-carbon investment and a leap in renewable-power capacity to around 50 gigawatts by 2030. It won’t explore for oil in any new countries.

“Whatever the devils that will no doubt emerge in the detail, this is a pretty big change from BP,” Greenpeace UK’s Chief Scientist Doug Parr tweeted in an unusual show of support. CEO Bernard Looney is taking the opportunity presented by the virus to speed up the changes he needs to make to fulfill his vision of a low-carbon future. But the company went into the crisis with high debt and hefty payouts — it even increased the dividend for the fourth quarter — meaning more pain now.