BP's incoming chief executive will herald a "transformational phase" for the UK-based oil major as it accelerates spending on renewable and low carbon energy in response to growing concerns over climate change, the company's chief financial officer Brian Gilvary said this week.
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Register NowBernard Looney, who is set to take the helm of Europe's second-biggest oil company in February, intends to "really lean into" BP's investments in lower carbon projects amid mounting pressure from the public and investors, Gilvary said.
"Society and investors and shareholders are moving at a rapid rate of knots ... we're seeing a huge change in terms of society and what society expects," Gilvary told an earnings call Tuesday.
"Whenever there's a change at the top, it's an opportunity to move the ship in a slightly different direction, in this case, plotting perhaps a maybe more pacey course."
BP's CEO Bob Dudley will be replaced by Looney, the oil major's current upstream head, in early February 2020 after delivering the company's 2019 full-year results.
Commenting on his appointment earlier this month, 49-year-old Looney said he would build on his predecessor's work and "meet society's demand for cleaner, better energy."
NEW STRATEGY UPDATE
Like most of its oil major peers, BP has stepped up its bets on renewable energy in recent years and has been growing its gas business to help reduce its operational carbon footprint. It is active in biofuels production in Brazil, wind power operations in the US and a partner in Europe with major solar development company Lightsource.
As a result of the scheduled change in leadership, Gilvary said BP has postponed its planned strategy update from November to February next year.
"You should assume that early next year, what we were originally planning for November will be an update on 2021 and some of the fleshing out of what we believe our ambition is in the low carbon and energy transition space," Gilvary said.
In the second half of 2020, he said BP is likely to map out a longer-term strategic plan to 2025.
BP has pledged to spend at least $500 million a year on low-carbon activities, including its renewables business and other acquisitions. It has also set a target for no net increase in its operational emissions levels by 2025. In March, BP committed a further $100 million to fund new emissions reductions projects.
-- Robert Perkins, robert.perkins@spglobal.com
-- Edited by James Burgess, james.burgess@spglobal.com