The energy industry is racing to reduce emissions from fossil fuels and that trumps the evolution of renewable energy. That’s what BP’s chief executive Robert Dudley said at the International Petroleum Week in London.
The boss of one of the biggest oil and gas companies in the world acknowledged the benefits that renewable energy offers to the world but noted that, “It’s great to see renewables grow so fast. But it is also great when gas replaces coal in power and halves the emissions. Or when a smart, high-performance hybrid car replaces a less efficient vehicle.”
Oil and gas production, Dudley also said, is becoming increasingly efficient and this will help sector players secure supply from currently recoverable reserves that exceeds global demand until 2050 “at least twice over.” The shale revolution has been instrumental in this efficiency drive, creating an abundance of supply that has greatly intensified competitiveness in the industry.
In future, he said, the winners among oil and gas producers will be the ones that can pump hydrocarbons most competitively. In refining, competitive rates will again be the crucial factor ensuring success.
Earlier this month, BP reported its strongest year this decade, with production up 12 percent on the year—excluding its portion of Rosneft’s production—which was the highest since 2010. The company also beat earnings expectations reporting a net profit of US$6.2 billion. Exploration activity resulted in the discovery of as much as 1 billion barrels of oil equivalent – the most successful result since 2004.
The company is now focusing on lowering its breakeven level to just US$30 per barrel, maintaining its strict capital discipline. It has already reached the US$50 milestone and, Dudley said, “I think we are finally saying goodbye to the old world where suppliers inflated costs in good times and operators squeezed them in bad. If we work together, we’ll break that cycle of boom and bust.”
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.