British Petrol is one of the largest oil companies in the world. Therefore, the recent announcement of this company has caused quite a stir. BP suffered billions in losses in the second quarter of 2020 and the business restructure is needed obviously. Their new motto is green energy instead of oil. After the cases of 2020, the new boss of BP announced a radical change in the strategy of the group. That should lead the company away from fossil fuels. During a digital press conference, Bernard Looney explained his vision for the future of BP. The oil company wants to transform itself into a green energy company. You can find all the details in a 65-page paper.
Bernard Looney plans to gradually invest $5 billion a year in this goal each year until 2030. BP has set itself the goal of producing 50 gigawatts of green electricity over the upcoming ten years. At the same time, the group wants to reduce its production of oil and gas by 40%. In order to understand the volume, you must be familiar with the amount of annual investments in fossil energies. BP is currently spending more than twelve billion dollars on this. Therefore, it is a radical cut for the British group. Bernard Looney also wants to write off projects that worth $25 billion until 2030.
Investors Put Pressure On
The changes cames as a surprise, even though the pressure from environmentalists, politicians, and investors has grown in recent years. The members of the investor group “ClimateAction 100+” advocated a more climate-friendly strategy for BP at the last general meeting. This fons manages at least 33 trillion dollars and therefore has a corresponding weight. This year you could see live that the oil demand will not increase anytime soon. In a recent report, experts assume that stagnation will occur in fifteen to twenty years at the latest because the proportion of alternative energies will continue to grow. This development poses significant challenges for the oil industry. BP is willing to accept this and they are going to change the business model.
The big oil producers came under increasing pressure in the previous year. There was too much supply on the market, and prices did not develop as expected. Stricter climate laws and heightened environmental awareness in all areas of society have shown their effects. Analysts are already assuming that the corporations could come under further pressure. If they are not going to change the direction of working, there is a risk of high losses of the projects and reduced profits. The experts can predict the further legal tightening. The best example of this is the Green Deal proposed by the EU. In February, BP was the second company after Shell to announce that it would become climate-friendly by 2050. To achieve this goal, BP would like to invest in the areas of hydrogen, CO2 storage, and bioenergy. Besides, the company would like to build 70,000 charging stations for electric cars worldwide over the next ten years. BP will present the details to the world in autumn.