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Report: BP CEO says company to sell oil assets to cut emissions, reduce debt

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Report: BP CEO says company to sell oil assets to cut emissions, reduce debt

London-based major BP p.l.c. plans to divest oil assets and throttle back the development of other traditional projects as the company works to reduce debt, cut emissions and align its business model with the Paris Agreement on climate change, according to a Sept. 12 Bloomberg article, citing a conference call with CEO Bob Dudley.

Company executives met within the last week to discuss ways to reduce emissions in light of a recent shareholder resolution requiring the company to better explain how it is aligning its operations with the Paris Agreement, Dudley said during the call with JPMorgan Chase & Co. One proposal that was discussed was BP's eventual exit from its most carbon-intensive projects.

Like many of its peers, BP has come under pressure from investor activist groups to reduce emissions. At the company's annual general meeting in May, shareholders approved an investor-backed resolution to broaden the way the company reports on its greenhouse gas emissions and climate goals. While BP has stated that it believes its strategy is consistent with the Paris climate change goals, it will continue to work toward further alignment.

Dudley said he is dealing with the challenge of investing in lower-return renewables while maintaining the company's large dividend to shareholders.

"We'll reduce the emissions from our operations, reduce the emissions from our products and come up with the new business models," Dudley was quoted as saying. "If you add all those figures up in reductions of greenhouse gas for example, we have a big solar business, a big biofuel, wind business you almost get no credit when you do those calculations."

In addition to wind and solar, BP has also turned its eye to electric mobility. In the last 18 months, BP purchased U.K.-based charging operator Chargemaster — renaming it BP Chargemaster — and the battery developer StoreDot.

Additionally, BP announced Sept. 10 that it will implement new technology for the continuous measurement of methane emissions at all new oil and gas processing projects around the world.

Meanwhile, during its second quarter earnings conference call, BP officials said the company's indebtedness was outside its 20% to 30% guidance level, hitting 31% at the end of the quarter, reflecting the $10.5 billion purchase of shale assets from BHP Group as well as changes to accounting rules.

Through 2020, BP is planning to sell $10 billion in assets to help reduce its debt and promised $350 million of annual synergies from the integration of the former BHP assets with BP's existing shale business.