BP chief executive Bernard Looney has said the world will need oil and gas for decades even amid the drive to achieve net zero, as he underlined the role the North Sea industry can play in the effort.
Mr Looney told industry leaders the expertise developed in the North Sea could play an important part in the development of clean energies that will be required to help tackle the threat of climate change.
Noting the world has a finite carbon budget, he said it was vital that the world try to achieve net zero. Mr Looney announced the ambition that BP should become a net zero company by 2050 soon after taking charge of the company in February last year.
However, he observed yesterday: “It’s not a popular thing to say in some camps , but there isn’t a scenario out there that doesn’t have oil and gas in it in decades to come.
“The reason for that is things like gas. If Asia’s going to meet its targets we’ve got to stop burning coal and burn something else and quite frankly the quickest way to do that is oil and gas.”
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Mr Looney hammered home his view that gas is an important transition fuel that could be used to meet demand for energy in place of more carbon intensive sources while the required renewables capacity is developed.
“Oil and gas is core to BP’s strategy, without oil and gas we can’t transition,” said Mr Looney.
He underlined his belief that companies such as BP have much to offer when it comes to making the complex changes that will be required in global energy systems and related supply chains in future years.
BP is working with a wide range of companies and public sector bodies to help decarbonise industries along with heating and transportation systems.
Mr Looney said: There’s a desire for simple answers: Who’s good, who’s bad … if you’re a green company, a solar or a wind company, you’re good and if you’re an oil and gas company you’re bad and that’s a real challenge.”
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However, he added: “The point is unless the carbon intensive industries change all the green companies in the world aren’t going to actually solve the problem.
“Of course we need more wind companies and more solar companies but what the world really needs is the BPs and the Shells to transition; it needs the cement sector to transition, the steel sector to transition, the airline sector … What the world needs is greening companies as much, if not more than it needs green companies.”
Mr Looney has said BP can use the profits generated from oil and gas production to fund increased investment in areas such as renewables along with payouts to investors.
The company recently included the North Sea in a group of eight core oil and gas regions on which it expects to focus.
Speaking to a conference organised by industry body OGUK (Oil and Gas UK) Mr Looney noted that BP is also investing heavily in windfarms off the country. It plans to bid for licences in the coming ScotWind licensing round.
He praised the work done by OGUK in terms of encouraging the industry’s response to the net zero challenge. This includes work in areas such as adapting offshore production facilities to run on wind power and the reduction of flaring.
Mr Looney said the North Sea Transition Deal agreed with the Government in March could help the industry become a leading global player in sectors such as renewables and carbon capture and storage, and match the success it enjoyed in oil and gas.
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OGUK chief executive Deirdre Michie told the conference the transition deal could help the UK become a global leader in emissions reduction technology.
She noted it was the first of its kind among G7 countries.
Meanwhile a firm led by successful North Sea entrepreneurs has underlined its belief in the potential of the area by lining up deals that will allow it to acquire an extensive exploration portfolio.
The Longboat Energy business founded by the team that grew Aberdeen-based Faroe Petroleum into a major force in the North Sea, said it had agreed to acquire stakes in a range of licences through deals with three firms.
It said the farm in deals will give it the opportunity to complete a significant, near-term, low-risk exploration drilling programme.
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The licences concerned are all in the Norwegian sector of the North Sea. Longboat underlined the value of the tax breaks that are available for firms that complete exploration work in the area.
However, a spokesperson for Longboat confirmed it would be in the market for UK North Sea deals at the right time and right price.
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