BP raised its already ambitious energy transition targets on Feb. 8, saying it would assign 40% of its capital expenditure to energy transition activities by 2025 and achieve net-zero emissions from products it sells by 2050, while expecting upstream production to stabilize this year after a plunge in 2021.
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Reporting fourth-quarter results, chief executive Bernard Looney voiced confidence in the strategic shift he has undertaken since taking his post in 2020, saying: "Over the past two years we have set a new purpose, direction and strategy... and completed the largest reorganization in our history. We enter 2022 with growing confidence. The past two years have reinforced our belief in the opportunities that the energy transition presents."
The UK major's new targets include 40% of its capex going to "transition growth businesses" by 2025 and 50% by 2030, while emissions from operations are to be reduced by 50% by 2030, compared with an earlier 30%-35% target.
It also aims to achieve net-zero "full lifecycle" emissions from the products it sells by 2050, as opposed to a 50% reduction in the emissions intensity of those products by that point.
In terms of production, BP said it expected a further reduction in output across both its upstream segments in the current quarter -- 'oil production & operations' and the LNG-focused 'gas & low-carbon' division -- compared with the fourth quarter of 2021.
It said full-year upstream production would be "broadly flat," with "slight higher" output from the 'oil production & operations' segment, helped by the startup of Phase 2 of the Mad Dog project in the Gulf of Mexico in the second half of the year. Full-year output in 'gas & low-carbon' will be "slightly lower," it added.
BP's oil production & operations division saw a 14% year-on-year drop in output in 2021 to 1.31 million b/d of oil equivalent, reflecting the effects of production sharing contracts and the sale of assets in Alaska and parts of its BPX shale division.
The "underlying" drop, excluding asset sales, was 3.8%, reflecting "reduced capital investment and decline," the company said. It had previously said its hydrocarbon production will fall by 40% by 2030 as part of its energy transition strategy.
Production from the 'gas & low carbon' unit was up compared with a year earlier both in the fourth quarter and for the full year, with a 22% increase to 974,000 boe/d for the fourth quarter, due to project startups as it pivots to LNG and gas in locations such as Egypt and India.