High oil prices will benefit BP's strategy of reducing its exposure to oil and gas while simultaneously rewarding shareholders, chief executive Bernard Looney told Reuters on Tuesday.
"High oil prices are very good for our strategy and our shareholders will benefit from that, especially through our buyback programme," Looney said in an interview at the Reuters Events: Global Energy Transition conference.
Since taking over from Bob Dudley as CEO at BP in early 2020, Looney has unveiled a strategy to make the UK-based supermajor a net-zero energy business by 2050 by investing more in renewable energy sources and reducing its oil and gas production over time. BP looks to cut its oil and gas production by 40 percent by 2030 through active portfolio management and no exploration in new countries.
However, Looney has said many times that BP will continue to be in the business of oil and gas, and it will be this business that would deliver cash for renewable investments and steady returns to shareholders.
"Performing while transforming" - this is what Looney reiterates in every update to the market.
Related: China Reports Major Oil And Gas Find At Record Depths
BP is resuming share buybacks this quarter after more than tripling its first-quarter earnings from a year ago on the back of rising oil prices and "exceptional gas marketing and trading performance," it said at the end of April.
Higher oil prices will also be good for BP's plans to sell assets, Looney told Reuters today. The rise in the price of oil would also make allocating more investment to low-carbon energy sources easier, according to BP's top executive.
Earlier this month, Looney told Bloomberg News that he expects global oil demand to rebound and remain robust for some time.
"There is a lot of evidence that suggests that demand will be strong, and the shale seems to be remaining disciplined," Looney told Bloomberg News at the St. Petersburg International Economic Forum. "I think that the situation we're in at the moment could last like this for a while," he added.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More