BP chief executive Bernard Looney admitted the coronavirus pandemic makes the challenge facing the world’s oil giants even starker, as consumers change habits overnight and get used to “looking up at clear skies”.
Looney – who also praised the “resilience” of renewables as oil prices sank into negative territory – told financial analysts the Covid-19 emergency adds to the wider momentum behind the energy transition, as he said the supermajor’s net-zero 2050 ambition remains unchanged despite the battering to its core fossil markets that slashed first-quarter underlying profits by 67%.
“The pandemic has reminded us of the frailty of the eco-system, and how life can change almost overnight. People are looking up at clear skies and so on,” said Looney, who has only been in the job since February.
Falling demand for oil and declines in CO2 emissions as industrial activity plunges have been among the most notable side-impacts of the coronavirus crisis.
“The pandemic only adds to the challenge for oil in the future. We’re all living and working very differently,” said Looney.
“There’s a real possibility some of that will stick. The question has to be will consumers consume less. And I think there’s a real possibility that will happen.”
Asked if changes in the energy market alter the risk profile between fossils and renewables, the BP chief contrasted April’s dip into negative pricing of West Texas Intermediate oil – which attracted global headlines – with the situation facing the company’s Lightsource BP solar development venture.
“We talk a lot about negative prices for WTI just a few weeks ago. At the same time Lightsource BP is doing 400MW of solar contracts in the US, right at that time,” Looney said.
“That sector continues to attract investment, because of its risk profile and its resilience.”
Looney said BP would stick with its strategy to “reinvent the company”, with more details set to be revealed in September. Capital expenditure for low-carbon investments will remain unchanged at $500m this year, said BP.
But Looney’s words cut little ice with campaign group Greenpeace, which was especially critical of the supermajor’s decision to maintain its dividend.
“BP and the rest of the oil industry are still running the sector like a pyramid scheme, betting that demand will bounce back from every downturn and high dividends will distract investors from the underlying weaknesses of the business,” said Greenpeace.
“By sticking with a business as usual dividend payout, BP is ignoring the severity of the multiple crises we now face. Given the company's plunging profits, dividends are not mandatory and can’t take precedence over investment in clean renewable energy crucial to a more resilient climate and economy.”