BP chief executive Bernard Looney has vowed to withstand pressure to row back further on high-profile energy transition pledges involving a planned decline in the production of fossil fuels.
Looney set BP on a transitional course when he took up his position three years ago, vowing to let hydrocarbons production decline 40% from 2019 levels by 2030, but the company has since softened this target to a reduction of just 25%, while leaving the net zero target in place for 2050.
In an interview with Reuters, published today (Tuesday), Looney insisted there would be no further reductions in BP’s low carbon vision.
“We’re holding our nerve on the transition,” he told the news agency. “I believe that’s what the world needs.
"And I believe it’s our job to prove that is in the long-term interests of our shareholders.”
BP is still the most ambitious of the supermajors and the only one of its peers standing by plans to oversee a reduction in hydrocarbon output by the end of the decade.
BP investors have been cool on the plan, with its shares underperforming US peers like ExxonMobil, Chevron but also most European majors.
The uplift in oil and gas prices after Russia's attack on Ukraine and continuing growth in global demand for oil and gas has so far rewarded oil companies remaining focused on core production, while return in the renewables sector have been meagre.
However, Looney appeared to stand firm against such criticism. "We will grow in sectors that will not be correlated to the oil price. That will be very, very valuable," he said.
BP forecasts its transition business will see earnings grow to $3bn to $4bn by 2025, and up to as $12bn by 2030. This is equal to around 25% of core earnings, Looney told Reuters.
He added: “One thing we’ve learned after three years is we will never satisfy everybody. It’s impossible.”
At the start of 2023, BP laid down its new transition businesses’ strategy in which the oil major said it would invest $55bn to $65bn in its energy transition businesses — including EV charging, biofuels, hydrogen, wind and solar — between 2023 and 2030. This would account for half the company's annual capital expenditure.
"We believe that you must invest in today's energy system," he said. "On the other hand, we believe the world needs to transition... that creates opportunity for our company," said Looney in the interview with Reuters.
BP plans to spend $15bn by 2030 to sharply grow its biofuel and biogas businesses to 170,000 bpd, compared with oil and gas output of 2 million bpd.
It expects returns from biofuels to reach at least 15%, similar to those from oil and gas currently, Reuters reported.
(A version of this article was originally published in Recharge's sister oil and gas publication Upstream)