Jonathan Leake wrote telegraph. Here is an excerpt:
BP's new CEO Bernard Looney addressed the Royal Lancaster Hotel, urging them to “reimagine” his company as the Green Power Champion.
By 2030, he promised to reduce oil and gas production by 40%, while lost fossil fuel revenues are replaced by wind farms, solar parks and biofuels made with plants.
He said: “BP has been an international oil company for over a century… Now we are spinning into an integrated energy company.
“We believe that our new strategy provides a comprehensive and coherent approach to turning our net-zero ambitions into action. The world will be crucial for the fight against climate change over the next decade.”
Five years after the February 2020 speech, the company was plagued by ruthless radical investors, under pressure to raise its flat share price and considering the return to oil and gas exploration, which made it so successful.
The sudden change comes after decades of crisis in one of Britain’s most respected institutions. Today, its future is more uncertain than ever.
Looney’s unveiled net-zero plan has hammered profits and has created strong speculation about acquisitions, breakups and even mergers with Arch-Rival Shell.
This month, people feared the 3.8 billion pound BP stake in Florida-based hedge fund and business raider Elliott, and paid a siege for the company.
BP will face final testing on its capital markets day on Wednesday, when the company's current CEO Murray Auchincloss will seek to convince doubtful investors that he could offer a “basic reset.”
To win the round's skeptic, he is expected to announce a major breakthrough over the past five years – from net zero and then return to its oil and gas legacy.
But many in the city are asking how the company of BP's size and body shape finds itself in this position first….
BP's net zero commitment is powered by precise numbers.
Looney promises that BP will increase renewable energy investment from $500 million (£395 million) to $5 billion by 2030, and build a 50 GW wind and solar park, about enough for the entirety of strong winds and sunny days. UK offers UK.
During the same period, it will cut oil and gas production from 2.6 million barrels per day to 1.5 million barrels per day. Refined throughput will drop from 1.7 million barrels per day to just 1.2 million barrels per day. …
Problems began to appear soon.
Oil and gas prices soared after Russia's invasion of Ukraine in February 2022. The surge has dropped cash to fossil fuel producers, including BP. However, it raises questions about why the company has retreated from such a profitable market.
In February 2023, after $28 billion in 2022's profits were linked to the global energy crisis, Rooney was forced to cut his promises until the end of the decade, cutting production by 40% to 25%.
BP shareholders have realized that the green spending they supported in 2020 cut their dividends in half. The total shareholder returns performed less than 15%, France's total energy grew by 30%, Chevron's total fell by 60%, and Exxon's total revenue fell by 100%. …
Few of Looney’s renewable energy projects promised in 2020 have been able to achieve.
Earlier this month, BP announced that it would sell people who have been built (such as 10 Feng Shui in the United States). Its other wind energy assets (mainly planned to be approved across the UK, including approvals) will be divided into independent joint ventures.
BP Lightsource, a solar subsidiary of BP, is still building solar farms – but then sold, meaning there is no long-term investment or revenue.
The push for Auchincloss, a replacement for Looney, confirmed all pauses in wind and solar investment. “We have completely decapitated renewable energy,” he said.
The same results show that BP earned $8.9 billion in base profit, compared to $13.8 billion in 2023, the worst result of the year since the 2020 pandemic.
In response, Auchincloss promised to bring new waves of oil and gas production, including BP's sixth hub in the Gulf of Mexico. The Kaskida development will soon produce 80,000 barrels of crude oil per day and other developments are planned in the North Sea in Iraq, India, Brazil, Egypt and the UK.
Overall, he recommends that BP oil production increase by 2-3% per year until 2030.
All of this totally contradicts Looney’s bequeath of “zombie” net-zero strategy — and strong clues about the “basic reset” of Auchincloss will include — a full recovery of oil and gas, analysts say.
