Oil and gas giant BP says it is reviewing its plan to move away from fossil fuels in pursuit of renewables thanks to the current boom in oil and gas commodities, according to Reuters.
CEO Bernard Looney’s pursuit of green energy outstripped all rivals three years ago when he outlined a radical blueprint to move away from fossil fuels. Last month he applied the brakes, slowing BP’s planned cuts in oil and gas and scaling back planned renewables spending in the wake of the war in Ukraine.
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The company isn’t backing away from renewables though, its green chief Anja-Isabel Dotzenrath stresses.
Dotzenrath told Reuters that BP was reviewing its solar and onshore wind businesses as part of a revamp that will see it move away from selling the clean electricity it produces, and instead keep hold of most of it to supply its growing electric vehicle charging network and production of low-carbon fuels.
The onshore renewables scrutiny, which hasn’t been previously reported, follows reviews by Dotzenrath of BP’s offshore wind and hydrogen businesses over the past year which led to overhauls that saw the company install new managers, hire staff, scrap some projects and seek to revise terms of others.
BP’s head of renewables and gas didn’t elaborate on the nature of the latest review.
Dotzenrath also put the first numbers to BP’s rebalancing act, which comes amid deteriorating profits in renewables power generation, telling Reuters the company aimed to retain 80% of the power produced to supply the global EV network and to make “green” fuels such as hydrogen, seen by many transition experts as a key fuel of the future.
She did not give a timeframe for the shift, which represents a major pivot given the vast majority of BP’s renewables output is currently linked to power grids. BP will continue to build some projects under traditional power supply deals, she added.
“We will not grow renewables for the sake of growing wind and solar,” Dotzenrath said.
“Our strategy is not necessarily about asset ownership in renewables, but it comes as a consequence. It is really about securing access to cheap—the cheapest—green electron,” she added, referring to electricity from renewable sources.
The most eye-popping change in the strategy update last month was BP slowing its planned cuts in oil and gas output from 40% to 25% by 2030 compared with 2019 levels.
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It also lowered its projected annual spending on renewables to up to $5 billion by 2030 out of a total group budget of up to $18 billion, from $6 billion out of $16 billion under its previous update in 2022, according to Reuters analysis.
While BP’s move to produce more oil and gas for longer puts it more in line with its peers, its 25% annual reduction goal is still more ambitious than any of its global rivals.
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