LONDON, May 8 (Reuters) - BP softened the

language on its pledge to cut its 2030 oil and gas output in an

effort to reassure investors over its energy transition strategy

and narrow a gaping value gap with rivals.

CEO Murray Auchincloss has in recent months pivoted the

London-based firm's strategy to focus heavily on returns. He has

been less emphatic than his predecessor Bernard Looney on BP's

shift towards renewables and low-carbon energy.

BP's shares today lag rivals Shell, TotalEnergies,

Exxon Mobil ( XOM ) and Chevron ( CVX ), based on a number of

key metrics, reflecting concerns BP is not investing in the most

profitable segments of its business, primarily oil and gas.

Auchincloss has not reversed a flagship target Looney

announced in 2020, before watering it down in 2023, for BP to

reduce oil and gas output by around 25% between 2019 and 2030 to

2 million barrels of oil equivalent per day (boed). BP is the

only major oil company to have reduction targets, and the pledge

has concerned some investors.

Speaking to Reuters on Tuesday after BP announced $2.7

billion in first quarter profits, Auchincloss said BP may

overshoot or undershoot the 2030 target.

"Two million (boed) is a decent number to stick by right

now. Could it be higher? Yes. Could it be lower? Yes."

PRAGMATIC APPROACH

Auchincloss, who took office in January following Looney's

shock resignation last September, has said he would take a

pragmatic approach.

BP has over 30 projects across its businesses that it would

need to decide whether to proceed with in coming years,

Auchincloss said.

"And as we make those decisions on a returns-based approach,

that will help inform what we think our production will be in

2030, but I am focused on returns and cash flow, not volume,"

Auchincloss said.

In February, he said he expected BP's output to grow by 2%

to 3% through 2027.

Earlier this year, Shell CEO Wael Sawan also watered down

the company's emission reduction targets, citing expectations

for strong gas demand and uncertainty about the energy

transition as he also seeks to boost Shell's shares.

Biraj Borkhataria, head of European research at RBC Capital

Markets, said he expected BP to increase its spending on oil and

gas production, known as upstream.

"BP highlighted they were focusing on returns, and therefore

I would expect the next iteration of the capital allocation

strategy to incorporate higher upstream capex (capital

expenditure), and a lower allocation to certain aspects of its

transition growth engines."

"All in all, this should translate to higher upstream

volumes than the 2 million boed target in 2030," Borkhataria

said.