BP has said it plans to invest up to £18bn in the UK energy system by the end of 2030 and will support the drive to net zero while continuing to grow its North Sea oil and gas business.
Chief executive Bernard Looney told analysts the company expects to allocate an increased share of its investment to the UK as he underlined the advantages of operating in the country.
He said the UK offers a supportive policy environment and access to attractive resources in terms of conventional oil and gas and renewables along with a skilled workforce.
Mr Looney made the comments after BP posted its highest quarterly profit in 14 years. The group made $6.2bn (£5bn) underlying profit in the three months to March 31, compared with $2.6bn in the first quarter last year.
READ MORE: North Sea firms to make huge payouts to investors after surge in oil and gas prices
The results underline the scale of the benefit that firms operating in the North Sea have enjoyed from the surge in oil and gas prices fuelled by the recovery from the pandemic and the fallout from the war in Ukraine.
The price rises have left millions of consumers in the UK facing huge increases in their energy bills.
The results announcement sparked renewed calls for the Chancellor Rishi Sunak to impose a windfall tax on firms operating in the North Sea.
Mr Sunak snubbed calls for a windfall tax when he announced his Spring Statement after claims by oil and gas firms that such a levy would deter firms from investing in the North Sea.
In the Energy Security Strategy published last month the Westminster Government said it wanted to encourage firms to increase production in the North Sea to help reduce the country’s reliance on imports.
READ MORE: North Sea gas field start up boosts UK supplies amid Ukraine war fallout
However, last week Mr Sunak indicated he might think again about a windfall tax if firms did not make the investment expected.
BP appeared keen yesterday to show that it would do its bit to help support the energy security drive and efforts to reduce emissions in the UK.
.After retrenching in the North Sea in recent years, BP said that it plans to invest in oil and gas projects "to support near term security of supply" and in the hunt for new finds, while looking to reduce emissions associated with activity.
It will focus investment close to existing hubs such as the Clair and Schiehallion fields West of Shetland and the ETAP cluster east of Aberdeen.
While environmentalists want curbs to be imposed on industry activity, BP has said oil and gas will be needed to meet demand for energy for years. The company has said it will use the profits made from its “resilient hydrocarbons” business to fund investment in lower carbon energy systems as well as making big payouts to investors
The company said it plans to invest heavily in offshore wind developments off Scotland and England. It bid successfully for acreage in the ScotWind round with Germany’s EnBW. The group expects the work concerned to provide a big boost to the supply chain. It will make Aberdeen its global operations and maintenance centre of excellence for offshore wind. BP also plans to invest in a hydrogen production hub in the city and related initiatives.
BP said it expects to pay up to £1bn in taxes for its 2022 North Sea profits. It has paid around £0.25bn annually in other taxes in the UK in recent years.
Mr Looney said BP expected to allocate 15 to 20 per cent of capital investment to the UK compared with a historic average of 10% to15%.
BP made a net loss of $20bn in the first quarter after writing off the $24bn value of its Russian business. Mr Looney noted BP announced plans to withdraw from Russia soon after the country launched its assault on Ukraine in February.
The group completed $1.6bn share buy backs in the first quarter. It declared a quarterly dividend of 5.46 cents per share, against 5.25 cents per share in the first quarter last year. BP shares closed up 6%, 22.7p, at 414.25p.
Regarding potential North Sea investments, BP said it planned to develop lower emission oil and gas projects to support near term security of supply, for example, at the Murlach, Kate and Mungo fields around the ETAP hub in the central North Sea and the Clair and Schiehallion fields West of Shetland.
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