Time to Reinvent BP, Says New CEO

The new CEO of BP has said it is time for the company to
reinvent itself as the firm announced a major reorganization and a
net zero deadline of “at least” 2050.

Bernard Looney took over from long-time CEO Bob Dudley last week
and is scheduled to discuss the firm’s new focus later today.

“We need to reinvent BP,” said Looney in a statement
released ahead of his first major event as CEO. “Our historic
structure has served us well but, in order to keep up with
rapidly-evolving customer demands and society’s expectations, we
need to become more integrated and more focused. So we are
undertaking a major reorganization, introducing a new structure, a
new leadership team and new ways of working for all of us.”

The company is dismantling its upstream and downstream structure
with four new units replacing them: Production & Operations;
Customers & Products; Gas & Low Carbon Energy; and
Innovation & Engineering.

“We expect to invest more in low carbon businesses – and
less in oil and gas – over time. The goal is to invest wisely,
into businesses where we can add value, develop at scale, and
deliver competitive returns,” he added.

The supermajor’s CFO and head of downstream will also be
moving on as part of the changes at the company.

The new gas & low carbon division will be led by Dev Sanyal,
currently the CEO of BP’s alternative energy as well as regional
head for Europe and Asia.

A new clean energy and mobility team will also be
established.

No details have been given on the increase in low carbon
investment. In 2018 BP spent an estimated $500 million on
renewables. In January Portuguese oil firm Galp Energia spent

€2.2 billion
($2.4 billion) on a 2.9-gigawatt portfolio of
solar projects in Spain. Total has also led the charge in a

wave of investments
by oil majors and utilities in solar this
year.

As well as its 50 percent stake in solar developer
Lightsource BP
the company has also focused on its bioenergy
play with Bunge in Brazil. Lightsource BP is on track for 10
gigawatts of solar capacity by 2023. It also owns the largest

EV charging
firm in the U.K, BP Chargemaster, and has taken
part in hydrogen pilot studies in the Netherlands.

Echoing his comments in a recent results call, Looney stressed
that the firm’s commitment to its shareholders was not going to
be sacrificed in the process of the changes.

“We can only reimagine energy if we are financially strong,
able to pay the dividend our owners depend on and to generate the
cash to invest in new low and no-carbon businesses,” said
Looney.

Net zero

The firm’s net zero targets cover its operations and its oil
and gas production, which a footnote to the statement equates to
Scope 3 emissions, those related to the combustion of its products.
Spanish firm
Repsol
is the only other oil company to make a net zero
commitment that includes Scope 3 emissions. The majority of the
sector has preferred carbon intensity targets or limited net zero
commitments to their own operations. It’s an important distinction.
In 2015, BP’s Scope 3 emissions were
15 times higher
than its Scope 1 emissions.

BP also said it will lobby harder for a carbon tax and other
policies supporting net zero.

Details on how it will reach net zero are thin on the ground at
this stage. CCUS is not yet proven at the multi-GW scale and green
hydrogen is embryonic at present. A capital markets day is planned
for September when a fuller strategy and near-term specifics are
laid bare.

Source: FS – GreenTech Media
Time to Reinvent BP, Says New CEO