BP’s new chief executive Bernard Looney has said the oil and gas giant aims to be a net zero company by 2050 and can play an important role in support of the global effort to tackle climate change.
After taking charge last week Mr Looney pledged to reinvent the company in support of a new purpose and ambition, which will involve reimagining energy for people and the planet.
Oil and gas firms have difficult questions to answer on climate change
He unveiled the plan as oil and gas companies come under sustained attack from campaigners who say their production should be curbed for the good of the environment.
Mr Looney insisted BP, which has big operations in the North Sea, could help achieve the rapid reduction of emissions of carbon to zero, net of amounts absorbed, that the world needs.
He admitted that would involve a huge change at BP but appeared confident the company could achieve its environmental aims while maintaining payouts to investors.
BP is likely to remain in the oil and gas business for a very long time in order to generate the returns it needs to support distributions to shareholders and investment in new energy systems.
However, investment in oil and gas will fall over time while spending on low and no carbon energy sources will increase.
The company will focus on the most profitable oil and gas opportunities, while taking steps to decarbonise its remaining production. This could involve investing in technologies such as carbon capture, usage and storage.
Mr Looney made no mention of the North Sea business, which he used to run. However, in recent years he has highlighted the amount of cash the company generates in the North Sea and the long term potential of giant fields such as Clair West of Shetland.
North Sea growth on agenda at BP as oil giant doubles profits
Outlining his plans for BP yesterday, Mr Looney said he understood the urgency of the need to respond to the climate change challenge and genuinely believed that BP could be a force for good in that context.
“The world’s carbon budget is finite and running out fast; we need a rapid transition to net zero,” said Mr Looney.
“We all want energy that is reliable and affordable, but that is no longer enough. It must also be cleaner. To deliver that, trillions of dollars will need to be invested in replumbing and rewiring the world’s energy system. It will require nothing short of reimagining energy as we know it.”
The response will involve BP reducing carbon emissions on its oil and gas production to zero net of amounts absorbed by 2050 or sooner and investing in low carbon energy sources such as renewables.
The company is targeting a 50 per cent reduction in the carbon intensity of the products it sells. It said this will involve offering customers more and better choices of low- and no-carbon products.
It will also pursue five aims to help the world get to net zero. These include advocating more actively in support of policies it thinks will support that objective, such as carbon pricing.
Mr Looney plans to complete a big shake up of the firm to help it achieve the new ambition.
The upstream oil and gas production business and downstream refining and marketing operations will be dismantled and replaced by four new business groups.
These are: Production and operations, gas and low carbon energy, innovation and engineering and customer and products.
Greenpeace said the statement of ambitions left urgent questions unanswered.
BP accused of 'greenwashing' on climate change by lawyers
Charlie Kronick, oil advisor at the environmental campaigning group, asked: “How will they reach net zero? Will it be through offsetting? When will they stop wasting billions on drilling for new oil and gas we can’t burn? What is the scale and schedule for the renewables investment they barely mention? "
Mr Looney said BP would give greater detail on issues such as timescales when it updates investors in September but had set out a clear direction of travel.
The Irish executive was head of BP’s exploration and production business until he succeeded Bob Dudley as chief executive last week.
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