Quoting “people familiar with recent discussions,” the WSJ story says Looney is telling his senior management team he plans to pursue a “narrower green-energy strategy,” and place less emphasis on the company’s ESG goals.

In the same conversations, Mr. Looney has complained that his company’s plans to shift from oil to green energy has been “mischaracterized,” though it is hard to see much validity there given the company’s own projections of rapid de-growth in its fossil fuels production.

Here’s an excerpt from the story:

Mr. Looney has said he is disappointed in the returns from some of the oil giant’s renewable investments and plans to pursue a narrower green-energy strategy, the people said. He has told some people close to the company that BP needs to do more to convince shareholders of its strategy to maximize profits in areas where it has a competitive advantage, including its legacy oil-and-gas operations.

In some of the conversations, Mr. Looney has said he plans to place less emphasis on so-called ESG goals—a catchall term for environmental, social and governance—to help clarify that those aren’t distracting the company from its ability to deliver profits, the people said.

Mr. Looney, the people said, is casting the moves as a modest short-term course correction rather than a major strategic pivot for the 114-year-old company.

Analysts and some investors say pledges by BP to shift away from fossil fuels and into renewable energy risk handicapping the company’s performance. Many companies are struggling to transition to new green technologies while still relying heavily on traditional energy sources.

It certainly seems no coincidence at all that Looney’s proposed new direction for the British major that has mounted a massive PR campaign portraying itself to be greener than other oil majors for the past quarter century comes as oil companies like Chevron and ExxonMobil have announced record profits and stock price growth for 2022. Indeed, BP’s stock has risen by just 7% since January 2021, while Exxon’s has almost tripled and Chevron’s has jumped by 80%.

Exxon and Chevron, of course, are taking an entirely different course in meeting their own “net-zero” pledges, focusing on green-energy pursuits that match their already-present internal skillsets – like hydrogen production and CCS projects – while also planning to grow their oil and gas production in the coming years to help meet what they believe will be rising global demand for both.

In our panel discussion at NAPE in Houston on Wednesday, Ed Crooks, Doug Sheridan and I discussed the fascinating dichotomy of oil demand outlooks published recently by BP and Exxon, as represented in this chart from the Financial Times:

As you can plainly see, the strategies for achieving net-zero being pursued by each company are reflective of their respective outlooks. If you’re BP, and you really believe that global demand for crude is going to begin a steep decline in just 7 years, then a de-growth strategy makes perfect sense. But if you’re ExxonMobil, and you really believe global demand will keep rising through 2040 before moving into a very slow decline over several more decades, then the continuing growth strategy becomes the only logical path to pursue.

The biggest problem that has become obvious for BP and Looney is that the investor community is increasingly realizing that ExxonMobil’s outlook is more likely to ultimately come about, and has been rewarding the oil companies that share it.

Bottom Line: It is apparent now that Looney and his immediate predecessors in the CEO job at BP made an error in buying into the belief that a rapid energy transition heavy on renewable energy can be subsidized into being by the liberal governments of the western world.

The real world is far more complex and stubborn than the central planners at the EU and Trudeau and Biden administrations obviously believe, and the countries of Asia, Africa and much of South America are more interested in building their economies using abundant and affordable energy than in checking off climate change boxes by adopting renewables that cannot fill the needs of their populations.

If the WSJ story is fully accurate, Mr. Looney now understands the error of his strategic approach, or at least fees the need to modify it substantially due the lack of enthusiasm for it from the investor community.

In his earning announcement scheduled for Feb. 7, the BP CEO could save everyone a lot of time by simply saying “Oops.”

This article originally appeared at the excellent Energy Transition Absurdities (subscribe today!) and is reposted here with the permission of the author.