BP is still losing money from its renewable energy ventures, while it is selling stakes in oil and gas developments. The UK-based supermajor’s current pace of moving into clean energy could be too fast and leave it with lower profits from oil until the renewable business starts generating profits, Reuters’ reporter Ron Bousso notes in a special report.
BP was one of the first European majors to pledge to become a net-zero energy business by 2050 or sooner, a week after Bernard Looney took over from Bob Dudley as BP’s chief executive officer.
Some current and former BP executives who spoke to Reuters expressed concern that the UK supermajor’s plan to move toward renewables and providing charging points for electric mobility could be too fast.
BP’s alternative energy ventures, such as solar energy firm Lightsource and EV charging point developer bp pulse, have been losing money in recent years, according to financial filings with the UK’s corporate registry Companies House reviewed by Reuters.
In contrast, the oil and gas business continues to generate profits, especially with the oil price rise this year compared to the industry crisis of 2020, when all international majors reported losses or significantly reduced profits.
The concern with some analysts and executives, according to Reuters, is that by divesting oil and gas assets and pledging to cut oil and gas production by 40 percent by 2030 through active portfolio management and no exploration in new countries, BP may not be ready to lose the profits from fossil fuel while waiting for renewables to start making money.
BP is “strictly disciplined” about when and where to invest in renewable energy projects, spokesman David Nicholas told Reuters. BP is actually picking its investment in renewable energy based on whether they meet set financial criteria and allow the company to achieve its profit targets, Nicholas said.
Earlier this year, BP sold 20 percent of its 60-percent stake in a gas block in Oman to Thailand’s national oil company for US$2.6 billion as part of its plan to receive US$25 billion in divestment proceeds by 2025.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com