BP has vowed to leave oil behind with a historic shift into green energy after cutting its dividend in half and sinking to a record loss.
The North Sea behemoth set out an ambitious plan to slash fossil fuel production by 40pc over the next decade and increase its annual investment in renewable and clean technologies to $5bn a year.
BP will also develop more than 50 gigawatts (GW) of wind and solar farms – equivalent to Britain’s entire renewable capacity at present.
Bosses were forced to cut dividend payments for the first time since the Deepwater Horizon disaster a decade ago as part of a battle to save money. It will pay out 5.25 US cents per share, down from 10.5 cents in the previous quarter.
Cutting the dividend will hammer hundreds of thousands of small investors who own the stock for an income and control around 30pc of BP shares between them.
The company plunged $6.7bn into the red in the three months to June - its worst ever quarterly loss - after a steep cut to the estimated value of its oil and gas exploration assets.
However, shares closed up 3.4pc as markets welcomed the push into renewables.
Drilling firms around the world are struggling to cope with a collapse in the oil price after the pandemic brought normal life to a crashing halt. Brent crude has dropped to $44 a barrel from almost $70 at the start of the year, while the US benchmark briefly went negative in a historic plunge as the crisis took hold.
BP has already announced it will sack 10,000 staff to save money, and has long planned to focus on renewable power in future as the golden age of oil comes to an end.
Mr Looney, who took charge in February, said: “BP has been an international oil company for over a century.
“Now we are pivoting to become an integrated energy company.
“From a company driven by the production of resources to one that that’s focused on delivering energy solutions for customers.”
The details build on a press conference earlier this year when it pledged to reach net zero emissions by 2050.
As part of this managed decline, BP will no longer explore for oil in countries where it is not already prospecting.
It also unveiled a new financial plan to support what bosses said is a fundamental shift towards low carbon energy.
While the 50pc dividend cut was greater than the 30pc that analysts at Barclays were anticipating, they noted that the new strategy was overwhelmingly positive.
Climate change activists welcomed the plan. Greenpeace said: “BP has woken up to the immediate need to cut carbon emissions this decade...this is a necessary and encouraging start."
But some shareholders and analysts have questioned whether BP can manage the shift to less lucrative clean technologies while remaining highly profitable.
Lydia Rainforth, of Barclays, said: “Proving that it can deliver profitable growth, rather than just setting an ambition for it, will be the next key step for BP."
The pandemic has accelerated the process of change for all three of Europe’s supermajor oil firms.
BP, Shell, and Italy’s Eni have each announced plans to slash carbon emissions and gradually prepare their businesses for a world without fossil fuels.
In February, BP announced a huge restructuring, axing its traditional upstream and downstream model – which divides the business of extracting oil from that of selling it – in favour of a system that puts more focus on green energy.
Luke Parker, vice president at energy consultancy Wood Mackenzie, said: "We said back in February that no company of BP’s stature had gone as far, or committed so unequivocally, to transforming itself in the face of the energy transition.
“The guidance that BP laid out today brings that transformation to life – makes it real.
“It constitutes the clearest and most detailed roadmap to Big Energy that any of the majors have provided to this point.”