BP to cut back on green shift amid booming demand for fossil fuels
FEBRUARY 2, 2023
By Paul Homewood
h/t Ian Magness
Sounds like BP have read their own Energy Outlook!
The boss of BP wants to “dial back” its push into clean energy after US oil giants posted record profits on the back of booming demand for fossil fuels.
Bernard Looney, chief executive of BP, is said to be concerned about the returns from its investments in renewables such as wind and solar, which have been at the heart of his plans to recast the business as a green champion.
Mr Looney now wants to narrow the company’s focus and persuade shareholders that it is committed to maximising profits, according to the Wall Street Journal, as concerns about energy security prompt renewed political support for oil and gas projects.
As recently as a year ago, Mr Looney said BP was “accelerating” its green investments. BP is one of the world’s largest oil and gas producers, pumping out more than one million barrels of oil equivalent per day in 2021.
However, investors and analysts note the backdrop has changed since Russia’s invasion of Ukraine, which has disrupted supplies of oil and gas, pushing up prices and contributing to a cost–of-living crisis.
One BP investor said shareholders were carefully watching the performance of renewable investments.
They said: “Societally, people are now more focused on the question of energy security – we’ve got to be mindful that as we run up the new system of renewables, you can’t run down the old system too aggressively; it’s a transition, it’s not a step change.”
Biraj Borkhataria, head of European energy research at RBC, said it would be better for a company to change tack now rather than spend too much and realise the returns were not high enough.
He added: “The environment, the assumptions that went into everyone’s net zero analysis in 2020 is clearly not valid today.
“It was based on a peaceful, globally cooperative world – that’s no longer valid.”
Money talks, as they say!
Renewables were only ever attractive to the likes of BP, because of all the subsidies that went with it.
Now there is a realisation that fossil fuels cannot be replaced by renewables for the foreseeable future, and BP’s ultimate duty is to its shareholders, not those pushing for Net Zero.