BP Stuns Sector By Reversing Course on Oil and Gas
LONDON — BP stunned the energy sector this week by announcing it is scaling back on its ambitious plans to cut oil and gas production after a dramatic increase in fossil fuel prices led to its highest annual earnings in 114 years.
The British multinational has been overhauling its activities in the oil and gas sector since the Deepwater Horizon explosion in April 2010.
Three years ago, it committed to cutting oil and gas production by 40% by 2030 as part of an effort to lower its carbon emissions and move on to renewable forms of energy.
But the company announced on February 7, it had $27.7 billion in profits last year, far surpassing the $26.3 billion it earned in 2008 and double what it took in — just $12.8 billion — in 2021.
In an interview with the Financial Times of London, which broke the story, BP Chief Executive Bernard Looney said the decision was taken not because of the lower profits still associated with renewable sources of energy, but rather uncertainty mostly related to Russia’s ongoing invasion of Ukraine.
The company is now aiming for a 25% reduction in oil and gas production by 2030, and Looney said it would spend about $8 billion between now and then on its low-carbon ventures.
“Governments and societies around the world are asking companies like ours to invest in today’s energy system,” Looney told the Financial Times.
Anja-Isabel Dotzenrath, BP’s executive vice president for gas and low-carbon energy, later told the business newspaper the $8 billion investment would allow the company to continue carrying out its commitment to roll out 50 gigawatts of wind, solar and other renewables by 2030.
Dan can be reached at [email protected] and at https://twitter.com/DanMcCue
