BP’s 2021 profits were the highest since 2008, thanks to soaring oil and gas prices. The company also increased share repurchases and accelerated its plans to reduce emissions through higher spending on low-carbon energy.
Tuesday’s statement by BP indicated that it is aiming to accelerate its goal of reaching net-zero emissions in 2050. This is as the British energy giant seeks to move away from fossil fuels and increase its renewable energy capabilities.
Two years ago, the company underwent the largest overhaul in its history. Now, it plans to reduce its operational emissions by half by 2030, as opposed to its previous goal of 30-35%.
BP also aims to achieve net-zero emissions over the lifecycle of its energy products by 2050, or earlier than previously forecasted.
Chief Executive Bernard Looney stated that “The need for and role of an integrated energy company (IEC has) has – to us – never been more clear,” in a statement.
Oil major BP expects to increase its capital expenditure in transition-growth companies like electric vehicle charging and renewables to more than 40% by 2025, and to around 50% by 2030. The goal is to make $9 billion to $10 billion in these fields by 2030.
BP sees hydrogen and renewables as the transition growth engines and said it was on track for 20 gigawatts (GW), renewable power capacity, by 2025, and 50 GW by 2030. It was also confident of achieving 8-10% leveraged returns on its investments.
Analysts at Third Bridge stated that “the reputations of renewable businesses have been underperforming over the past year” and that it remains to be determined if companies such as BP can generate returns in these new business areas.
According to the group, it plans to maintain a core profit of resilient hydrocarbons at $33 billion per year until 2025 and $30 billion to $35 billion by 2030.
