BP to cut oil and gas production by 40% as it sets out road to net zero

4th August 2020 | Commercial Energy

BP is to cut the amount of oil and gas it produces by 40% by the end of the decade, the energy giant announced on Tuesday as it fleshed out plans to become a “net zero” company by 2050. Boss Bernard Looney said the business will increase the amount it invests in low-carbon projects tenfold by 2030 to around five billion US dollars a year (£3.8 billion). The move gained him unusual praise from environmental group Greenpeace, which called it a “necessary and encouraging start”.

Mel Evans, senior climate campaigner for Greenpeace UK, said, “BP has woken up to the immediate need to cut carbon emissions this decade. Slashing oil and gas production and investing in renewable energy is what Shell and the rest of the oil industry needs to do for the world to stand a chance of meeting our global climate targets.”

Net zero

Mr Looney was put in charge of one of the world’s largest oil companies in February and made it clear from day one that he wanted his term in charge to be defined by the carbon transition. His plan is to use the oil company’s hydrocarbons – oil and gas – to invest in the transition. “It’s simply not possible to transform a company that’s 110 years old by simply shutting off the taps in one area and pivoting 100% into the new,” he said.

BP will continue to use cash from its oil business to fuel the transition, he added, “it enables the strategy.” It is a plan that Mr Looney had not intended to reveal yet, but a decision to slash the company’s dividend in the face of lower prices and the Covid-19 crisis forced his hand somewhat.

“We had planned to share this news next month … but particularly as we are making the announcement around the dividend, we wanted to give the story all at once so people can put all the decisions in context,” he said on a call with reporters. “Apologies if this has come as a bit of a surprise to any of you.”

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