London-based energy company BP has announced plans to reduce its oil and gas production by 40% and invest $5 billion dollars into clean energy strategies by 2030. The move is part of BP’s ambitious plan that will see zero-carbon emissions from the company by 2050.
This announcement comes amidst concerns of reduced oil prices across the world caused by the coronavirus pandemic. With many businesses and factories closed, planes grounded and public transport reduced, crude oil prices have dropped to an 18-year-low of less than $20 per barrel. Although the prices have recovered to about $44 per barrel, they are still much lower than usual, and the new reality is straining gas and oil companies. As such, BP has sold its petrochemical unit and announced to cut over 10,000 jobs.
In the second quarter of this year, BP reported a loss of $16.8 billion. The company is now trying to realign itself with the future of energy, as most countries focus on low-carbon emission energy options.
In a statement, BP said, “This coming decade is critical for the world in the fight against climate change, and to drive the necessary change in global energy systems will require action from everyone.”
The company has predicted that demand for fossil fuels will decrease by at least 75% in the next 30 years, at least if we are all to maintain global warming to 1.5 degrees Celsius. The company now plans to reduce oil and gas production by at least 1 million barrels a day by 2030. This would be equivalent to a 40% reduction compared to BP’s oil and gas output levels of 2019.
“We believe that what we are setting out today offers a compelling and attractive long-term proposition for all investors,” CEO Bernard Looney said.
While environmental groups believe this statement is a step in the right direction, they encourage BP to go further with its clean energy goals.
Image via Donald Trung Quoc Don