BP builds a low-carbon future 　　

Expand low-carbon energy investment and implement the "de-oil" strategy

　　 Recently, BP has been plagued by performance problems. The company's sale of some non-core businesses is not news. But just in early August, BP announced the company's latest future strategy, and its core business has also changed. In this future strategy, the company put forward the concept of "transition from an international oil company to an integrated energy company" and promised to completely change the company's existing business structure. In this regard, BP will completely change its corporate image, from a well-known international oil company to a low-carbon energy company, and look forward to changing its operating conditions from then on.

　　Full shift to a low-carbon economy

　　 In February this year, BP announced the goal of achieving zero greenhouse gas emissions by 2050. This time, the company put forward specific operational indicators to achieve the above goals, that is, to gradually reduce dependence on fossil fuels and shift the axis to the new energy field.

　　 BP CEO Bernard Rooney said that by 2030, BP will become a completely different energy company. He promised that by 2030, BP's renewable energy power generation capacity will increase from 2.5GW in 2019 to 50GW. The output of biofuel produced by biological resources has increased from the current 22,000 barrels per day to more than 100,000 barrels. At the same time, the charging facilities for electric vehicles (EV) will increase from the current 7,500 to 70,000. In terms of investment, BP plans to increase its annual low-carbon investment by 10 times by 2030, reaching US$5 billion.

　　 Facing a low-carbon society, the new generation of transportation will also become one of the company's core businesses for growth. In 2019, the company cooperated with Chinese ride-hailing giant Didi Chuxing to establish a joint venture company dedicated to the construction of new energy vehicle charging networks and promote cooperation with these different industries and major cities. By 2030, the company's investment in the field of low-carbon energy will increase to $5 billion annually, 10 times the current investment scale.

　　Traditional business is gradually reduced

　　 On the other hand, BP’s current core business, traditional oil and natural gas production, will gradually decrease. Helge Lund, chairman of BP, said that the energy market has begun a fundamental and lasting change, gradually shifting from fossil energy to low-carbon and renewable energy. In the long run, the demand for oil and natural gas will be increasingly challenged. To this end, BP will go to oil and gas and take a low-carbon route.

　　Rooney said that by 2030, its oil and natural gas production (based on oil conversion) will be reduced to 1.5 million barrels per day, a decrease of more than 40% from the 2.6 million barrels in 2019. The existing oil and gas business will be positioned to ensure the existence of funds required for business transformation, and is committed to achieving targeted and efficient operations. At the same time, the company will no longer conduct related resource exploration in new countries and regions. In terms of operation, the company plans to reduce its emissions by 30% to 35% and reduce its existing refining and chemical production capacity by 1/3.

　　BP will still sell a large number of traditional petrochemical businesses. BP said the company has completed the sale of its final petrochemical business to Ineos for $5 billion. It will take longer to obtain the proceeds from these transactions. BP hopes to obtain $25 billion in cash through asset sales by 2025. The company is also considering selling DHC SOLVENT, the German chemical sector.

　　 may lead the industry transformation

　　 In addition to the release of the latest long-term business plan, BP's move to cut its dividend by 50% has also attracted investors' attention. In the current operating situation, BP's decision like this is naturally to reduce expenditures and ensure corporate transformation funds.

　　 BP's operating conditions are not good, but better than expected. BP’s second-quarter financial report showed that under the influence of the plunge in crude oil prices and the sluggish demand for the pandemic, the company suffered a loss of US$16.8 billion, reduced assets of US$17.4 billion, and lost US$6.7 billion in basic replacement costs. Reasons for BP's losses include low oil prices and refining product prices, and low market demand for fuels and lubricants. However, the company achieved debt reduction. As of the end of the second quarter, BP's net debt was $40.9 billion, a decrease of $10 billion from the end of the first quarter.

　　 After BP released its new strategy, its stock price rose by 7% instead. Explain that its business transformation does meet the expectations of market participants. UBS analysts estimated that the average revenue of the oil industry in the last quarter fell by 172% compared with the same period last year, which put tremendous pressure on oil producers. At the same time, climate change has caused countries, especially developed countries in Europe, to no longer support the development of the oil industry. This requires oil producers to take major measures against the long-term downturn in demand, including the transformation of the industrial structure. Industry insiders said that in this sense, BP's decision may be a sign that the oil industry is trying to further develop the clean energy market.