Strategy Disclosure for Declining Oil and Gas Demand | Interfaith Center on Corporate Responsibility

<div class=”col-lg-9 content-page left-side”>
<section class=”section-a-single-resolutions resolutions-info top-content”>
<div class=”resolutions-contain”>
<div class=”top-content”>
<h4>Resolution Details</h4>
</div>
<div class=”bottom-content”>
<div class=”row-info”>
<strong>Company:</strong>
<p>BP p.l.c.</p>
</div>
<div class=”row-info”>
<strong>Year:</strong>
<p>2026 </p>
</div>
<div class=”row-info”>
<strong>Issue Area:</strong>
<p>Climate Change </p>
</div>

<div class=”row-info”>
<strong>Focus Area:</strong>
<p>GHG Reduction and Targets </p>
</div>
<div class=”row-info”>
<strong>Status:</strong>
<p>Filed</p>
</div>

</a>
</div>
</div>
</div>
</section>

<section class=”section-b-single-resolutions content-blocks”>
<div class=”top-content editor-block”>
<div class=”content-block”>
<div class=”main-content”>
<h2>Resolution Text</h2>
<p><strong>Summary</strong></p>
<p>Multiple outlooks project impending decline in oil and gas demand. BP’s strategy assumes rising demand. In the last major demand contraction, the company cut dividends by 50%. This resolution asks BP to clarify how it would create shareholder value under credible scenarios of declining oil and gas demand. With this transparency, investors can better judge how BP’s portfolio might perform under all circumstances.</p>
<p><strong>Declining demand</strong></p>
<p>Many trusted analysts increasingly predict that the world will soon enter a structural decline in oil and gas demand. </p>
<p>STEPS and APS constitute credible scenarios, as they correspond to identifiable policies and market developments. STEPS represents the energy sector’s current direction of travel, based on the latest market data, technology costs, and in-depth analysis of the prevailing policy settings globally. APS anticipates the implementation of additional policies pledged by governments. These scenarios warrant investor concern, as they reflect ongoing and planned implementation of regulation, political support, and technological uptake, as well as market and economic realizes.</p>
<p>Both see an impending peak in demand for oil and gas. In STEPS, oil demand peaks by 2030 and gas by 2035. In APS, both peak before 2030 and fall 17% by 2035 compared to 2023 (99–82 mb/d; 4186–3493 bcm).1</p>
<p>The IEA’s June 2025 oil forecast predicts reduced demand by the end of the decade; this is noteworthy as it seems to align with the oil demand projections indicated in both STEPS and APS.2</p>
<p>Regarding gas, the IEA states: “The period of LNG surplus in the STEPS makes it difficult for some exporters to fully recover their long-run marginal cost of supply, creating risks that project sponsors write off the value of the assets.”3</p>
<p>Other analysts also show outlooks divergent from BP’s. Rystad’s analysis shows oil peaking in the early 2030s, with gas plateauing soon after. The US Energy Information Agency (EIA) expects overproduction to push oil prices down to $51 in 2026, well below the $70 to $74.4 BP expects. 4,5,6</p>
<p>This convergent view on a potential decline by a broad array of market analysts warrants serious concern from investors.</p>
<p><strong>BP’s reset strategy is based on growth in oil and gas demand</strong></p>
<p>At its Capital Markets Update 2025, BP projected a growth for oil and gas production to 2.3–2.5 mmboed by 2030. The Company promises to grow its adjusted cash flows by 20% annually over the next three years, but the plans beyond this short-term horizon are not transparently disclosed.7</p>
<p>Company scenarios assume that oil demand grows to 103.4 mb/d into the early 2030s, with gas demand growing above 4,800 bcm by the 2040s.8 </p>
<p>In their reporting, BP disaggregates its operations into 11 sub-segments, disclosing stress-testing for each sub-segment along a single variable. This approach does not demonstrate how shareholder value would be created under scenarios with declining demand. Further, the stress-testing horizon extends only to 2030. Investors would benefit from disclosure that addresses value generation. beyond this limited time frame, particularly with respect to the Company’s prospective response to a potential global peak in oil and gas demand during the 2030s.9</p>
<p>Historical precedent across multiple industries suggests that prolonged demand contraction puts downward pressure on prices. Further, most oil majors plan to raise production, creating oversupply. Revenue could be affected; only the most cost-competitive producers would deliver value to shareholders in a declining market.</p>
<p>BP does not disclose capital spending, production mix, or dividends in the event that demand falls. Even the Company’s projected growth would require significant gains in market share relative to competitors. Ongoing shareholder trust depends on answers to these questions.</p>
<p>In 2020, with oil demand down 9% and prices at an average of $42 per barrel, BP cut its dividend by 50%; this was a􀅌er the Deepwater Horizon catastrophe in 2010. BP has since raised its dividend, but the current $0.0832 quarterly payout remains 21% below pre-2020 levels. This was only a brief drop, yet the Company struggled. A sustained decline portends much higher risks for the Company and its shareholders.</p>
<p><strong>Conclusion</strong></p>
<p>BP’s current fossil fuel growth assumptions visibly diverge from IEA APS and STEPS scenarios and other analyst projections that foresee sustained demand decline.</p>
<p>Failing to plan for these potentializes risks significant shareholder value loss due to impaired assets, lower margins, and reduced dividends. Transparent disclosure of how BP would adjust capital allocation, energy mix, and cash flow under declining oil and gas demand is essential to assess its business resilience.</p>
<p>This resolution aims to ensure that BP’s strategy accounts for a complex and uncertain energy transition and demonstrates its ability to create shareholder value under a range of plausible scenarios.</p>
<p>You have our support.</p>
<p>1 IEA, World Energy Outlook 2024 and World Energy Outlook 2025, tables A.9 and A.13</p>
<p>2 IEA, Oil 2025</p>
<p>3 IEA, World Energy Outlook 2025</p>
<p>4 Rystad, Global Energy Scenarios 2025</p>
<p>5 EIA, press release, Aug 12, 2025</p>
<p>6 BP, Capital Market Update 2025</p>
<p>7 ibid</p>
<p>8 BP, Energy Outlook: 2025 edition</p>
<p>9 BP, Annual Report 2024</p>

</div>
</div>
</div>
<div class=”middle-content editor-block”>
<div class=”content-block”>
<div class=”main-content”>

</div>
</div>
</div>

</section>
</div>
<aside class=”col-xl-3 right-side”>
<div class=”column-contain”>

<h3>Lead Filer</h3>
<div class=”views-row”>
<div class=”views-field views-field-nothing”><span class=”field-content”> Tarek Bouhouch</span></div><div class=”views-field views-field-title views-field-field-shareholder”><span class=”field-content”>Follow This</span></div>
</div>

<h3>Co-filer</h3>
<div class=”views-row”>
<div class=”views-field views-field-nothing”><span class=”field-content”> Mary Minette</span></div><div class=”views-field views-field-title views-field-field-shareholder”><span class=”field-content”>Mercy Investment Services</span></div>
</div>

</div>

</div>
</div>

</div>
</div>
</aside&gt