The major strategy overhaul comes after a difficult trading year for BP, which is under pressure from investors to boost its share price, and as countries look to slash carbon emissions.
"We are reducing and reallocating capital expenditure to our highest-returning businesses to drive growth," chief executive Murray Auchincloss said in a statement ahead of a presentation to investors in London.
"This is a reset BP, with an unwavering focus on growing long-term shareholder value," he added.
- Clean energy reset -
The group will cut cleaner energy investment by more than $5 billion annually, while retiring targets on cutting emissions, which BP on Wednesday claimed had been better than expected.
BP will increase oil and gas investment to around $10 billion per year, making up two-thirds of capital expenditure.
"This is positive proof that fossil fuel companies can't or won't be part of climate crisis solutions," senior climate adviser for Greenpeace UK, Charlie Kronick, said in reaction.
"This conversation is over."
BP plans to also offload assets worth a total of $20 billion by 2027, including from the potential sale of its Castrol lubricants division.
The much anticipated update comes after BP suffered a 97-percent slump in net profit last year.
Its profit after tax tumbled to $381 million from $15.2 billion in 2023 in the face of higher costs as well as weaker oil and gas prices.
Total revenue dropped nine percent to $195 billion.
Auchincloss had already put emphasis on oil and gas to boost profits, scaling back on the group's key climate targets since taking the helm at the start of 2024.
The energy group has embarked on a plan to find $2 billion in cost savings and recently axed 4,700 staff jobs, or around five percent of its workforce.
Ahead of the investor day, it has widely been reported that US activist investor Elliott Investment Management has built a significant stake in BP.
The fund is known for forcing through corporate changes within groups it invests in, signalling further upheaval ahead for BP, analysts said.
British rival Shell and other oil majors have also cut back on clean energy objectives.
On the eve of BP's update, TotalEnergies chief executive Patrick Pouyanne said that while oil and gas would continue to be produced, "you need to produce it differently with much lower emissions".
The head of the French giant spoke Tuesday at International Energy Week, an annual gathering in London of major players from across the sector.
Shell the same day forecast global demand for liquefied natural gas to rise by about 60 percent by 2040.
It forecast that this would be "largely driven by economic growth in Asia, emissions reductions in heavy industry and transport as well as the impact of artificial intelligence".
Gas is being touted by energy companies as cleaner than other fossil fuels as countries around the world strive to reduce their emissions and slow global warming.
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